TAKING PROACTIVE STEPS TO PREVENT SEXUAL HARASSMENT

AND THE CONSEQUENCES OF FAILING TO TAKE CARE OF EMPLOYEES’ SAFETY AND WELLBEING

Employers are ordinarily aware that sexual harassment in the workplace is against the law.

However, recent case law has displaced previous assumptions about the kind of awards that can be made against an employer or employee that commits, or is involved in sexual harassment of an employee.

Recent cases have shown that the previous ‘range’ of compensation for proven sexual harassment claims is now considered ‘manifestly inadequate’, and that Courts are now prepared to award significant awards of damages against Employers who permit, or fail to prevent sexual harassment.

This update covers current law relevant to Employers (including when an Employer may be liable for sexual harassment) and cases relating to sexual harassment in the workplace.

What is Sexual Harassment?

The health and safety of employees are protected by various Acts at federal and state levels. Of particular relevance to employee’s protection from sexual harassment is the Sex Discrimination Act 1984 (Cth) (Act).

Under the Act sexual harassment occurs when a person’s conduct to another in the workplace satisfies three criteria:

The Conduct is Unwelcome
The Conduct is of a Sexual Nature
The Conduct would make a reasonable person feel offended, humiliated or intimidated

Unwelcome Conduct

What is ‘unwelcome’ conduct can be understood in the ordinary sense of the word (that is, the person subject to offensive conduct does not permit, consent or otherwise invite it). It should be noted that tolerating conduct is not the same as consenting to it.
Conduct can be considered as the cumulative conduct of a person or persons (over time) or a single instance where the conduct is sufficiently inappropriate.

Of a Sexual Nature

Under section 28 of the Act ‘of a sexual nature’ is defined broadly, but includes:
As discussed below, the sexual nature of conduct need not be directed at a person or be explicit. Generally inappropriate jokes can be of a sexual nature, and could amount to offensive conduct in a reasonable person’s view.

That would make a reasonable person feel offended, humiliated or intimidated

Whilst historically Australian courts have been reluctant to dismiss complaints as being unreasonable, the test of whether the conduct is sufficiently offensive to merit an award of damages is an objective one (that is, the view of the offended person is not the measure of offense – the Court will look at what an ordinary person, in the circumstances would feel about the conduct).
In Noble v Baldwin & Anor
[2011] FMCA 283, a woman complained that comments made by a fellow employee about the size of their colleagues breasts was sexually offensive – in determining whether the conduct would offend a reasonable person the Court disregarded evidence that the plaintiff had previously sent sexually explicit emails to a friend and fellow employee (as this was not relevant to the question of how a hypothetical person would see the offensive conduct).

Employer’s Liability

Employers may not be aware that they can be liable in a range of circumstances when an employee is subject to sexual harassment. Some common scenarios are the following:

1. Where the Employer promotes (or permits) an organisational culture that is liable to cause sexual harassment

Employers can be liable when their organisational culture promotes behaviour that may be construed by an employee as sexually offensive, humiliating or intimidating.
Even though an employer may not intend or be aware that a particular organisational practice is unwelcome, or of a sexual nature the employer is nevertheless liable for the environment in which their employees work and can be held responsible for their organisational practices.
In G v R and the Department of Health, Housing and Community Services [1993] HREOCA 20 it was noted by the Court that an employer could be liable for workplace pranks of a sexual nature that were not intentionally directed at the employee, but nevertheless had the effect of humiliating that employee sexually.
Sexual harassment can be passive – where an employer permits for example, employees to make derogatory comments about gay or transgender people generally, and this has the effect of sexually humiliating an employee (who might be gay or transgender) then the employer may be liable for the damage caused to that employee, even if the employer and other employees were unaware of the victim’s sexual orientation.

2. Where the Employer is vicariously liable for sexual harassment

Employers also have direct liability for the actions of their employees and agents.
When an employee sexually harasses another person, the employer is generally held accountable for that conduct as if it were its own conduct unless, under section 106 of the Act, the employer can demonstrate that it took ‘all reasonable steps’ to prevent the offensive conduct.
Section 106 of the Act creates an onus of proof on the employer to demonstrate why they should not be held accountable

3. Where the Employer takes action after a sexual harassment complaint that victimises the complainant

Employers must be careful about how they respond to complaints of sexual harassment – when an employee complains about sexual harassment (as is their right to do), or proposes to complain, the employer cannot engage in conduct that makes the complaining employee feel victimised.
Victimisation is encompasses a broad spectrum of behaviour, and could conceivably include treating the employee’s claim as trivial, or without merit.
Victimisation could also include scenarios where the employer permits another person to intimidate or victimise the employee (for example, the alleged offender, or a friend/colleague of the alleged offender).
Victimisation is an offence, and carries fines of $4,000 for individuals and/or 3 months’ imprisonment and $17,000 for bodies corporate.
Consequently, when a complaint is made an employer should always treat it seriously, deal with it promptly and not take the sides of either the complainant or the alleged offender.
An employer should also make sure that the complaint is treated with an appropriate degree of confidentiality and may require other measures be taken, such as temporarily moving employees to separate areas of the workplace to avoid contact/chances for victimisation to occur.

Summary: Recent Awards of Damages

In recent case law a number of key decisions have been handed down that have updated the previously understood range of damages available to victims of sexual harassment, and demonstrate the significant onus on employers to protect their employees from unwanted sexual behaviour.

Richardson v Oracle Corporation Australia Pty Ltd [2014] FCAFC 82
In this recent Full Federal Court case, Ms Richardson was ultimately successful in a claim against her former employer Oracle for loss and suffering caused as a result of the repeated offensive conduct of a co-worker.
In the case, the full bench recognised Ms Richardson’s entitlement to:

Damages for harm caused to Ms Richardson’s sexual relationship with her then partner
Damages for pain and suffering
Damages by reference to Ms Richardson’s deteriorated mental state, rather than by reference to the conduct of the employee per se
Damages for economic loss – being the difference between her new, lower paying job and her previous role with Oracle (the full bench overturned the first instance judgment of Buchanan J, who said that there was no causal link between Ms Richardson’s resignation and the conduct of Oracle’s employee)

Vergara v Ewin [2014] FCAFC 100
In this case, the Full Federal Court considered whether an employer could be held liable for sexual harassment caused by a contractor that utilised a common area used by the employer’s staff.
Ms Ewin alleged that Mr Vergara (who was not employed by the employer) sexually harassed her over a period of time, including at a staff function hosted by her employer where they were drinking together. Following the conclusion of the staff function, both Ms Ewin and Mr Vergara continued to drink with other colleagues at a second venue.
At both the first instance and on appeal the Court found that the social context in which some of the offending conduct occurred, was an extension of the employee’s employment, and that both the offender and the plaintiff were at the social function for work related reasons. For this reason the employer owed a duty of care to Ms Ewin to prevent inappropriate behaviour by Mr Vergara.
The full bench cited particularly, that in situations where alcohol is present at work functions an employer is liable for the intoxicated actions of its employees and similarly owes a duty of care to employees who may become intoxicated.
Ms Ewin was awarded significant damages against her former employer and Mr Vergara respectively.

Conclusion

In order to avoid liability, and demonstrate that an employer has taken ‘all reasonable steps’ it is essential that an employer adopts a sexual harassment policy. Further, should regularly conduct internal training or otherwise ensure that all employees are familiar with their obligations to each other under the employer’s policy.
When a complaint of sexual harassment is made it is not enough to simply refer an employee to the employer’s policy. The test of reasonableness requires that the employer adhere to its own policy and follow the procedure it has set out. This may involve separate meetings with the employees, follow up consultations, job re-assignment/management and the issuance of warnings. An employer may also wish to offer a distressed employee the opportunity to obtain counselling.
The response of the employer must be genuine, taking into account the allegations made and must treat the complaint as serious. Similarly, when a complaint is made between employees an employer must appropriately and actively monitor the relationship and obtain both sides of the picture before jumping to any conclusions. During this investigation the employer must use their best judgement to determine an appropriate level of confidentiality is maintained at all times, and if necessary take steps to separate the employees and prevent any backlash against the complaining employee by the alleged offender or other co-workers. Finally, follow up and positive reinforcement of the employer’s policy is required to demonstrate that an employer intends to provide a complaining employee with a meaningful resolution of their complaint.

Pointon Partners advises numerous employers in respect of employer’s duties of care, and routinely provides on-site employee education, executive training and policy development services to its clients.

by Michael Bishop – Director, Pointon Partners