Big money for sexual harassment claims
Employers should be mindful of the ruling by the Full Court of the Federal Court in Richardson v Oracle Corporation Australia Pty Ltd and Tucker [2014] FCAFC 82 which represents a marked shift in the court’s approach to assessing damages in sexual discrimination and harassment cases.
The case involved a complaint of sexual harassment by a female employee against a male colleague who claimed she had been subjected to ongoing, systematic and humiliating sexual harassment by including denigrating slurs and sexual advances.
The Court ordered $130,000 in damages ($100,000 in general damages and $30,000 for economic loss) - a significant increase on the previous award of $18,000 by Justice Buchanan at first instance.
This ruling will have implications for future Australian sexual harassment cases as the Court found that damages awarded in such cases had fallen short of damages paid to victims in other areas such as workplace bullying, defamation and injuries.
Justice Kenny noted that the award of damages in such cases indicated a greater value being placed on the loss of enjoyment of life. She referred to the decisions in Swan v Monash Law Book Co-operatve [2013] VSCA 326 and Willett v Victoria [2013] VSCA 76 where awards of $300,000 and $250,000 respectively were made as damages for pain and suffering and enjoyment of life arising from workplace bullying.
Her Honour held that this comparison with other cases demonstrates that damages at first instance were disproportionately low and failed adequately to compensate for the loss and damage suffered.
The appeal judge found that while the sum of $18,000 was not out of step with past awards in cases of this kind, this amount was nonetheless manifestly inadequate. It was out of step with the general standards prevailing in the community regarding the monetary value of loss and damage of the kind sustained.
In another recent decision of the Federal Court in the case of Ewin v Vergara (No3)[2013]FCA1311, an employee was awarded $476,163 for sexual harassment by a fellow employee making it one of the largest court-ordered sexual harassment awards. Notably, the court interpreted the term “workplace” broadly in the Sex Discrimination Act 1984 (Cth) to include “a place at which a workplace participant works or otherwise carries out functions in connection with being a workplace participant”.
The consequences for employers who fail to adhere to discrimination and harassment legal requirements or to take reasonable steps to ensure that their employees are compliant will risk significant costs and compensation being awarded to employees found to be victims of workplace sexual harassment.
Practical tips for employers
To minimise exposure to such claims, employers should take the following steps:
Review workplace behaviour policies and ensure that they are up to date and compliant with Australian law.
Regularly train and educate staff on their rights and responsibilities for appropriate workplace conduct and keep records of their attendance.
Ensure that a sound complaints mechanism is in place to correctly identify a sexual harassment complaint so that it can be dealt with promptly and fairly.
Take allegations of sexual harassment seriously and conduct thorough investigations of complaints.
