Sexual harassment allegations can be particularly difficult for an employer to deal with due to the sensitive nature of the situation. There are huge potential risks to the business and you need to approach these allegations in a fair and impartial manner, otherwise you could face claims, not only from the victim but also from the individual whom they are accusing. This can often be a difficult balance for employers and the matter needs to be managed with care.
Claims of sexual harassment can expose the business to potentially expensive outcomes, depending on the circumstances, how long the conduct has been ongoing and how the employer deals with the situation once it is brought to their attention. It should also be considered, that this situation could impact the culture within the business.