The committee, chaired by House of Commons leader Andrea Leadsom, also proposes a new complaints procedure and an investigation mechanism independent of political parties.
"The evidence, particularly from staff, was that a change in workplace culture is both urgent and essential, and is ultimately the best guarantor of a change in behaviour," the report notes.
A survey of 1,377 workers in Westminster politics in London, commissioned alongside the report, found that sexual harassment proved prominent with nearly one in five parliamentary workers reporting they had been subjected to it.
53 per cent said they had experienced, witnessed or heard of bullying or harassment as part of their job. Around 39 per cent of staff, MPs and peers had experienced non-sexual bullying and harassment of some sort while on the parliamentary estate. Of those suffering bullying or harassment, 45 per cent were women and 35 per cent were male.
The new report recommends tougher sanctions against those who have behaved inappropriately, such as suspension or expulsion for MPs and peers.
Recommendations also include a dedicated helpline for making complaints about sexual misconduct and a separate line for reporting bullying and non-sexual harassment. There would also be training for MPs and staff around better employment practices and complaints of sexual harassment at Westminster could be handled by a trained sexual violence adviser.
Alternatively, workplace disciplinary procedures could be instigated, led by a trained investigator and if they find fault on the "balance of probabilities", action will be taken against the guilty party.
In the case of MPs, this will be done by the UK's Parliamentary Commissioner for Standards.
"This is a big day for Parliament and our politics. The new independent procedure will demonstrate that we want to be the best Parliament in the world when it comes to treating everyone who works here with dignity and respect. This is a major step in bringing about the culture change that Parliament needs," said Leadsom.
A series of complaints had rocked Parliament, with her former deputy, Damian Green, being forced to resign last December. UK defence secretary Michael Fallon also stepped down from the Cabinet last year when the Westminster scandal was at its height following allegations of sexual misconduct.
MPs and peers will now vote to accept the recommendations of the new report, with a parliamentary debate planned in the last week of February or first week of March.
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