Two recent decisions from Victoria continue the trend of substantial damages being awarded for sexual harassment and bullying.

In Mathews v Winslow Constructors (Vic) Pty Ltd, the Victorian Supreme Court awarded Ms Mathews over $1.3 million in damages after finding her employer was negligent in failing to provide a safe working environment following abuse, harassment and bullying by her colleagues.

Ms Mathews was employed as a labourer by Winslow Constructors (Winslow) between 2008 and 2010. During her employment, she was subjected to severe abuse, bullying and sexual harassment by other employees and contractors which included:   

  • being shown pornographic material and asked if she would engage in similar acts;
  • being called “spastic” and “bimbo” and other offensive names;
  • questioning Ms Mathews over her sex life;
  • physical assault; and 
  • regular threats of sexual violence, including rape.

Ms Mathews gave evidence that she was reluctant to complain to her foreman because he participated in the offending conduct and that when she did eventually complain, she was laughed at and ignored. Ms Mathews gave evidence that she felt unable to continue in her employment and resigned.

Ms Mathews was subsequently diagnosed with a serious chronic psychiatric illness arising from the treatment described above, including Bipolar II disorder, anxiety and chronic post-traumatic stress disorder. Ms Mathews also sustained a permanent jaw injury from grinding her teeth due to the onset of the psychiatric illness. 

Medical experts gave evidence that Ms Mathews would require regular monitoring and treatment for the rest of her life and was unlikely to ever return to work.  

Winslow's defence  

Winslow denied any liability, but in the alternative asserted contributory negligence by Ms Mathews. 

Winslow produced evidence (including three covert films) of Ms Mathews walking down the street, engaging in physical activities and on occasions smiling. Winslow argued that the films, taken over a period of ten months in 2014 and 2015, proved Ms Mathews had exaggerated her psychiatric illness.

The Court found that the films had no material impact on the medical evidence regarding the nature or extent of Ms Mathews’ psychiatric illness or her reliability as a witness. In the course of the hearing, Winslow admitted negligence and discontinued the contributory negligence allegations.

The decision  

The Court concluded that Ms Mathews had sustained significant psychiatric injuries as a “direct consequence” of the bullying, abuse and sexual harassment she was subjected to by employees and contractors of Winslow. Ms Mathews was awarded damages of just over $1.3 million including: 

  • general damages of $380,000;
  • past economic loss of $283,942; and
  • future economic loss (from age 42 until age 65) of $696,085.    

In Collins v Smith (Human Rights) [2015] VCAT 1992, Ms Collins alleged that Mr Smith, her employer and owner of a Geelong based post office, engaged in persistent and unwelcome sexual conduct towards her by: 

  • attempting to kiss Ms Collins and touching her on the bottom and breasts; 
  • propositioning Ms Collins for sex on multiple occasions, often in exchange for money;
  • making repeated threats of rape and sexual assault;
  • sending numerous text messages of a sexual nature; and
  • demanding “favours” in exchange for allowing Ms Collins to keep various shifts.  

Ms Collins gave evidence that she had suffered severely due to the sexual harassment she endured and had been diagnosed with a number of psychological conditions, including post-traumatic stress disorder, major depressive disorder and anxiety disorder as a direct result of the harassment.

The decision  

The Victorian Civil and Administrative Tribunal concluded that Ms Collins’ experiences had caused her to suffer “severely” and constituted “a grave example of sexual harassment”.

The Tribunal noted that Mr Smith’s offending conduct was significantly aggravated by the fact that Mr Smith was the sole person to whom any complaint of sexual harassment could have been made and the prolonged period over which Ms Collin’s requests to maintain a professional working relationship were ignored.

The Tribunal awarded Ms Collins compensation of $332,280 comprising:   

  • damages of $200,000 (including aggravated damages);
  • past loss of net earnings of $60,000;
  • future loss of net earnings of $60,000; and 
  • out of pocket expenses of $12,280. 

In determining the amount damages awarded to Ms Collins, the Tribunal relied on the reasoning of the Full Federal Court in the leading decision of Richardson v Oracle including:

  • community attitudes regarding the impact of sexual harassment have changed; 
  • adverse consequences for sexual harassment should be extended to include loss of employment and career;
  • there was no basis to treat the consequences of sexual harassment differently from workplace bullying when determining compensation; and
  •  an employee’s evidence of a substantial impact upon the enjoyment of life is sufficient to warrant substantial compensation.

Lessons from the decisions   

These decisions reflect the continuing trend for courts and tribunals to award significant damages for unlawful discrimination and harassment and sound as a warning to employers to take steps to manage discrimination risks at work.  It is clear that employers can no longer assume that damages in discrimination cases will be nominal or that a claim of vicarious liability can be defended in the absence of taking appropriate steps to train employees and respond to complaints. 

Employers should take the time to:

  • review their discrimination polices and rectify any deficiencies; 
  • ensure that employees receive adequate and regular training in anti-discrimination law; 
  • ensure that policies and training programs have been tailored to reflect Australian laws; and 
  • ensure that adequate complaint handling procedures and investigation processes are in place.

Employee’s right to use company property

A recent decision of the Victorian Supreme Court highlights the risks for employers of directing employees to return company property which they’re entitled to use during employment - even when the employee’s given notice to resign.  

In Actrol Parts Pty Ltd v Coppi (2015), the Court held that Actrol Parts Pty Ltd (Actrol) repudiated the employment contract of its Sales State Manager, Mr Coppi. 

Actrol directed Mr Coppi to take garden leave after he resigned with four weeks’ notice.  The Court found no breach by Actrol by giving this direction. 

However, Actrol also required Mr Coppi to immediately return his company-issued car, iPhone and iPad.  Mr Coppi complied with this direction but argued in Court that Actrol repudiated his employment contract by requiring the vehicle and the devices to be returned before his employment terminated. 

The Court held that Mr Coppi’s employment contract included a right for him to use the vehicle and the devices - they were not tools of trade which the employer could withdraw in its discretion.   Actrol’s withdrawl of its property amounted to a repudiation of Mr Coppi’s employment contract which he accepted in order to terminate his employment. 

Lessons from the decision   

This case shows that employment contracts should include the right for employers to withdraw non cash benefits from employees at certain times.  In this case, Actrol would not have repudiated Mr Coppi’s employment contract if it had had an express right to direct Mr Coppi to return the company’s vehicle and devices during a period of garden leave.  Any unlawful discrimination risks should be carefully considered by employers before non-cash benefits are withdrawn.