Software giant Oracle was recently found liable by the Australian Federal Court for the sexual harassment of one of its employees by another member of staff and ordered to pay $18,000 by way of damages. The Court held that Oracle’s global “code of ethics and business conduct” policy was inadequate to show that it had taken “all reasonable steps” to prevent the harassment taking place.

Acts of sexual harassment

Oracle’s former employee, Ms Richardson, worked closely with a sales representative as part of a team attempting to secure a major financial commitment from the ANZ Banking Group. The Federal Court of Australia found that from their first face-to-face meeting in April 2008, Ms Richardson was subjected to a series of humiliating slurs and sexual advances from the sales representative, which turned into a more or less constant campaign of sexual harassment. There were eleven separate incidents of sexual harassment over the course of several months, which the Court said represented a pattern of conduct by the sales representative.

Why was Oracle vicariously liable?

Under the Sex Discrimination Act 1984 (Cth), an employer may be legally responsible for discrimination and harassment which occurs in the workplace or in connection with a person’s employment. Vicarious liability can be reduced or avoided altogether if the employer can show that it took "all reasonable steps" to prevent the sexual harassment or discrimination taking place.

In this case, Oracle was found to be vicariously liable for the sexual harassment of Ms Richardson because it had not implemented adequate policies and had not provided adequate training to its employees.

This was even though Oracle had implemented in Australia its global “code of ethics and business conduct” policy and every two years Oracle employees were required to complete a global online training package in reinforcement of it.

The Court was particularly critical of the contents of the global code of ethics and the global online training package and the fact that neither made reference to the legislation in Australia which prohibits sexual harassment. Furthermore, neither the policy nor the training package included a clear statement that such conduct was unlawful or a statement that an employer may also be vicariously liable.

The Court commented that these omissions from Oracle’s own policies was a sufficient indication that Oracle had not taken all reasonable steps to prevent sexual harassment in its Australian workplaces.

What does this mean for employers?

This case highlights the need for employers to ensure that they have systems and procedures in

place adequate to ensure that they meet the standard of taking “all reasonable steps” to prevent sexual harassment in the workplace. In particular this means:

  • employers with global operations need to ensure that their systems and procedures are specific to the Australian workplace, and that they avoid a ‘one size fits all’ approach to policies and training programs;
  • employers need to ensure that any policy on sexual harassment specifically includes the legislative foundation in Australia for the prohibition of sexual harassment, a clear statement that such conduct is unlawful and a statement that an employer may be found vicariously liable;
  • employers need to regularly review their workplace policies and procedures and ensure that they are consistent and up to date; and
  • employers should provide clear and regular guidance to employees through training programs outlining appropriate workplace conduct specific to the Australian workplace.