New standard for workplace harassment compensation
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New standard set for workplace harassment compensation

A recent sexual harassment case,  Richardson v Oracle Corporation Australia Pty Ltd , has generated commentary and surprise about the significant increase to the damages awarded to the complainant on appeal to the full federal court. Ms Richardson, who was the victim of repeated and cruel sexual harassment by a colleague when they were both employees with Oracle, successfully had the original award for damages of $18,000 set aside and replaced with an order of $130,000 for damages.

 

Ms Richardson and Mr Tucker were both employees at Oracle in 2008 and worked together as part of a bid team on a project. The evidence was held to show a ‘systematic course of conduct’ which fell within the legal definition of sexual harassment. Without repeating the sorry tale in lurid detail, the harassment included repeated and clearly inappropriate comments and invitations of a sexual nature, sometimes in front of other employees and clients. It was accepted at trial that these were intended to humiliate Ms Richardson and were an attempt by Mr Tucker to gain the ‘upper hand’. 

In the first instance Justice Buchanan held that Mr Tucker sexually harassed Ms Richardson and that Oracle as the employer was vicariously liable for this conduct. An award was made for $18,000 in damages. 

Shift in community standards

Ms Richardson appealed the decision on a number of grounds including the amount of damages. Although not all these grounds were upheld on appeal she was successful in getting a substantial increase to the award for damages for non-economic loss with $18,000 held to be ‘manifestly inadequate’. Additionally, the full court held that Ms Richardson was entitled to damages for economic loss because they held that her resignation was caused by the harassment. The decision includes a separate judgment from Justice Kenny and a joint judgment by Justices Besanko and Perram. The result is the same although the reasoning differs between the judgments.

Importantly, the commentary by the full court suggests a potentially new approach should be adopted for calculating damages in anti-discrimination cases. Justice Kenny rejects the notion of relying on the previously ‘accepted range’ of damages in earlier sexual harassment cases. These earlier cases put the range in the vicinity of between $12,000 and $20,000.  There is a discussion of more recent cases which place a greater value on loss of enjoyment of life and the experience of pain and suffering. Justice Kenny comments that the anti-discrimination field has not reflected these changes. “Such disparity bespeaks the fact that today an award for sexual harassment, though within the accepted range for such cases, may be manifestly inadequate as compensation for the damage suffered by the victim, judged by reference to prevailing community standards.” [para 109]

Although Mr Tucker perpetrated the sexual harassment, Oracle as the employer was held to be liable for his actions based on a concept called vicarious liability. This decision means that Oracle is now liable to pay a significant award of damages and may also need to pay further costs. 

Lesson for employers

When did you last review your sexual harassment policy? Are your employees aware of what is appropriate workplace behaviour? Are you dealing with complaints by employees? The effects of harassment are insidious, the impact on those involved can be profound and the employer and the business are also likely to suffer from reduced workplace productivity and retention rates.

Employers must be able to show they have taken reasonable steps to prevent the harassment or as this case demonstrates they risk incurring a potentially significant liability as a result of their employee’s actions.

Reasonable steps include:

  • A sexual harassment policy. A good policy will comply with recommended guidelines and will be appropriately implemented. It will spell out the type of workplace behaviour that is and is not appropriate, the steps that should be taken if someone believes they are being harassed at work, and the consequences for employees who breach the policy. 

  • A clear procedure for dealing with complaints

  • Monitoring of organisational culture and compliance with the policy

  • Regular, updated training of all employees at every level in what is, and is not, acceptable behaviour

As a minimum, this strategy will promote a healthy workplace environment that supports all employees to achieve their potential, without the fear of being subjected to sexual harassment. 

The Australian Human Rights Commission is responsible for the implementation of anti-discrimination laws in Australia and has a range of useful information for employers and businesses of all sizes.  

Sarah Waterhouse, Solicitor, BlandsLaw

 

Images courtesy of stockimages, imagerymajestic, David Castillo Dominici, t0zz,  at FreeDigitalPhotos.net

 
 
 
 
 

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