An employer was recently ordered to pay $130,000 to a previous employee because that employee was sexually harassed by a co-worker. Senior Associate, Penny Brooke, considers the significant award of damages in Richardson v Oracle Corporation Australia Pty Ltd [2014] FCAFC 82.

In 2010 Rebecca Richardson filed a claim with the Federal Court alleging that her colleague, Randol Tucker, had sexually harassed her and that the harassment caused her to suffer physical and psychological injuries. In February 2013 the Federal Court concluded that Ms Richardson had been sexually harassed by her colleague and that Oracle, as the employer of both Ms Richardson and Mr Tucker, was vicariously liable for the injuries that she suffered as a consequence.

Oracle was ordered to pay Ms Richardson $18,000 as damages for the physical and psychological injuries that she suffered as a consequence of the sexual harassment.

Ms Richardson appealed the Federal Court’s decision to the Full Court of the Federal Court (Full Court).

The Appeal

Ms Richardson appealed the decision for a number of reasons, including that the $18,000 awarded for damages was manifestly inadequate. Ms Richardson argued that the award for damages should have been higher for several reasons, including that $18,000 did not compensate her for her loss and damage. To support this argument, Ms Richardson relied on the awards of damages in different areas of the law, including in defamation cases.

Oracle argued that the Federal Court’s decision was consistent with other decisions in sexual harassment cases where awards for damages were ordinarily between $12,000 and $20,000, and that Ms Richardson’s reliance on decisions in other areas of law was “ill-suited” to this matter.

The Full Court did not agree with Oracle’s arguments and determined that $18,000 was inadequate. The Full Court, “having regard to the nature and extent of Ms Richardson’s injuries and prevailing community standards”, ordered Oracle to pay $130,000 in damages to Ms Richardson.

In making its decision, the Full Court said that “some previously accepted ‘range’ in sexual harassment cases” did not determine whether the original award of $18,000 was manifestly inadequate. The Full Court’s assessment was that “community standards now accord a higher value to compensation for pain and suffering and loss of enjoyment of life than before”.

Oracle was also ordered to pay Ms Richardson’s costs associated with the appeal. The increase in the award of damages also had implications for the cost orders that were made in favour of Oracle for the first decision in the Federal Court.

Lessons for employers

This decision highlights how important it is for employers to ensure that their bullying, harassment and discrimination policies and procedures are adequate and that they provide thorough and regular training to employees on those policies and procedures. Employers must also make sure that they deal with complaints about bullying, harassment and/or discrimination in a timely and sensitive manner. Traditionally awards for damages for harassment have been quite low, but this decision signals a significant change in how courts will assess damages.