Discrimination and sexual harassment in the workplace can expose employers to very large liabilities. This has been recently highlighted in the case of Poniatowska and Hickinbotham Group.

The allegations included incidents of sexual harassment and sexually discriminating conduct which ultimately resulted in the termination of Ms Poniatowska’s employment and a consequential psychological injury. Ms Poniatowska was successful and was awarded $466,000 in damages.

Facts

Poniatowska commenced employment with Employment Services Australia Pty Ltd (ESA), a member of the Hickinbotham Group, in January 2005 as a Building Consultant selling house and land packages. Poniatowska alleged she was subject to a range of discriminatory conduct and sexual harassment by a number of colleagues but in particular there were four main alleged incidents:

  1. In May 2005 a work colleague sent Poniatowska three unsolicited emails and a number of SMS text messages inviting her to have a sexual relationship with him. Poniatowska complained to her Team Leader who responded “What do you expect with a face like yours?”
  2. In June 2005 she was rostered to work with a work colleague whom she had previously requested not to work with. It was around this time that the Team Leader made an inappropriate comment about her, in front of other employees.
  3. Subsequent to the first incident, another work colleague sent Poniatowska an explicit picture and text message on her mobile. The picture was of a couple being intimate and the text stated that “U have to be better”. The colleague also made a number of phone calls requesting Poniatowska to have sex with him.
  4. In August 2005 the Team Leader asked her to enter into a sexual relationship with a competitor in order to secure a land deal with that company.

She further alleged that at various stages over this period, she had sought to make a complaint regarding the incidents, but ESA failed to undertake appropriate investigations and deal with the matter.

Two further allegations of unwelcome comments and touching were made against the Managing Director. However, the court did not find that these allegations were sustained.

From November 2005, Poniatowska was issued with three formal warning letters regarding her work performance. Each of the warning letters referred to her poor maintenance of client files. In December 2005 her client files were transferred to another consultant without justification or explanation. Poniatowska attempted to discuss the warnings on several occasions with ESA with no success.

On 10 February 2006, Poniatowska was suspended. While she was on suspension, ESA carried out a brief investigation into a client complaint which had been made against her. At the conclusion of the investigation, Poniatowska’s employment was terminated on 21 February 2007.

Poniatowska brought proceedings in the Federal Court of Australia alleging unlawful discrimination on the part of ESA and its employees in relation to a range of alleged inappropriate conduct.

Decision

Justice Mansfield found that each of the four main incidents had occurred and that Poniatowska’s complaints were dealt with in an “unsupportive and dismissive” manner. There was no formal complaints policy or procedure, which made it difficult for her to raise her concerns and for the concerns to be dealt with appropriately.

He found that each of the investigations concerning the employee were procedurally unfair and significantly flawed. In most instances s no formal record was made of the investigations, no witnesses were interviewed, and no warnings issued to the perpetrators.

His Honour found that ESA had engaged in a discriminatory course of conduct by failing to properly investigate Poniatowska’s complaints and fabricating the reasons for her dismissal. He found that none of the three warnings or the suspension were warranted. He considered that Poniatowska was effectively victimised for raising complaints of sexual harassment.

The conduct of Poniatowska’s two work colleagues was considered to amount to sexual harassment under Section 28A of the Sex Discrimination Act 1984 as:

  • it involved unwelcome requests for sexual favours
  • it was apparent after Poniatowska’s negative responses that a reasonable person would have anticipated that she would be offended, humiliated or intimidated if the requests continued (which they did).

It was further found that ESA discriminated against Poniatowska on the grounds of sex by failing to properly address her complaints, to the extent that she was treated less favourably than a male would have been treated in the same circumstances. ESA also discriminated against her when it purported to terminate her employment on the grounds of poor performance.

Damages

In determining the quantum of damages, His Honour took into consideration the “severe depression” and inability to work which she had suffered. Damages of $466,000 (plus costs) were ordered and consisted of components for pain and suffering, past and future loss of earning capacity and medical expenses.

The decision is currently on appeal.

Implications of the Decision

This decision is significant in that it demonstrates that large damages awards can be made in circumstances where employers fail to institute appropriate workplace policies, and complaint and investigation procedures to address instances of alleged sexual harassment and discrimination in the workplace.