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Excerpts from this article first published in ‘Human Resources’ Magazine, Issue 66, 5 October 2004
Two recent cases involving sexual harassment in the workplace demonstrate that the approach taken by an employer to the complaint lodged by an employee will make all the difference.
The Victorian Civil and Administrative Tribunal’s August 2004 decision in Howard v Geradin Pty Ltd t/as Harvard Securities, outlines an employer’s successful defence to a claim that it was vicariously liable for the actions of one of its male employees on the basis that it had taken reasonable preventative steps to prevent sexual harassment in the workplace.
The female employee had brought a claim against both the Company and the male employee. However, the claim against the male employee was discontinued after the male employee paid the female employee $5,000 compensation. The female employee proceeded with her claim against the Company for $26,000 compensation.
The female employee alleged that during her 3 month employment with the Company she was subjected to text messages, pictures and a note of a sexual nature. She alleged she was also the subject of several sexual comments. She reported the incident of the note to her manager and the matter was investigated.
The Company denied vicarious liability for the actions of the male employee on the basis that it had taken actions to prevent sexual harassment in the workplace through:
The Tribunal found that the Company had, on the balance of probabilities, taken reasonable precautions to prevent the actions of the male employee.
The Tribunal noted that it would have been preferable for the Company to hold formal and regular meetings or training to update employees in a formal manner regarding the Company’s sexual harassment policy. However, the Tribunal acknowledged the test to be satisfied in relation to vicarious liability was whether the precautions taken by the Company were ‘reasonable’. The precautions did not have to be ideal. The complaint by the female employee against the Company was therefore dismissed.
The Federal Magistrates’ decision of Hughes v Car Buyers Pty Ltd & Ors in August 2004 demonstrates the opposite end of the spectrum of an employer approach to a complaint of sexual harassment by an employee.
In that case, a female employee brought a claim of sexual harassment against the Company and its male director. The Company and the director did not provide any written response in relation to the complaint nor did they appear at the hearing of the matter.
The Federal Magistrate heard the matter on an undefended basis. His Worship found that the director’s behaviour during the female employee’s two week employment with the Company constituted, at a minimum, unwelcome conduct of a sexual nature. This included the Director touching her, giving her a hug, asking questions about her sex life and attempting to pull her down on top of him whilst lying down on a coach.
In failing to provide any response or appear at the hearing, the Magistrate held the director and the Company had effectively treated the complaint with contempt, which warranted an order of $5,000 in aggravated damages (which are compensatory in nature). This was because the conduct of the director and the Company in failure to respond to the complaint had prolonged the legal proceedings and added to the employee’s mental distress. The Magistrate also awarded the employee $7,250 in general damages (for pain, hurt and humiliation) and $12,373 in special damages (for loss of income). The damages totalled over $25,000. The Company and the director were also ordered to apologise to the employee in writing and pay her legal costs.
HR tip
It is clear from the first decision that implementing policies and training employees about sexual harassment can significantly improve an employer’s chances of successfully defending a claim of vicarious liability - that is, the employer’s liability for the actions of an employee against another employee. The precautions undertaken by the employer does not have to be ‘best practice’ or ‘ideal’ but reasonable in the circumstances.
On the other hand,
ignoring a complaint of sexual harassment, particularly a
complaint made to a Tribunal, by failing to provide a written
response or appear at the hearing, will only serve to attract
the ire of the Tribunal. The Tribunal may then form a conclusion
that the employer has treated both the complainant and the
complaint process with contempt and award further compensation
and damages.
Joanne Ede
Senior Associate
Australian Business Lawyers
