On 15 July 2014 the Full Federal Court awarded a victim of sexual harassment $100,000 as compensation for her distress caused by the sexual harassment of her by a colleague at work. Before this decision compensation for non-economic loss in sexual harassment claims in Australia had effectively been capped at $20,000 (other than in cases of psychological trauma resulting in inability to work).

Decision reflects community standards

The basis for the decision to increase the award of $18,000 made by the trial judge was an assessment by Justice Susan Kenny that community expectations about the value that should be attributed to a loss of enjoyment of life due to sexual harassment had changed since the introduction of the anti-sex discrimination legislation 30 years ago. The decision relies on case law in the areas of personal injury and workplace bullying as sufficiently analogous to draw from to determine that the award of $18,000 was manifestly inadequate. Justice Kenny stated that ‘…the community has gained a deeper appreciation of the experience of hurt and humiliation that victims of sexual harassment experience and the value of loss of enjoyment of life occasioned by mental illness or distress caused by such conduct.’

What happened in this case?

The decision relates to a claim brought by Rebecca Richardson against her former employer, Oracle Corporation, and her former colleague at Oracle, Randol Tucker. For about 8 months Ms Richardson was subject to sexual harassment perpetrated by Mr Tucker in the form of humiliating slurs in front of their colleagues and sexual advances. Oracle was vicariously liable for Mr Tucker’s conduct because it did not take all reasonable steps to prevent Mr Tucker from sexually harassing Ms Richardson. A few months after Ms Richardson complained of the conduct and an investigation into her complaint was completed by Oracle Ms Richardson left the company and immediately found another job. However, Ms Richardson lead evidence in the court to show that despite the fact she continued to work she suffered physical and psychological damage evidenced by a change in her demeanour, anxiety, depression and a decline in sexual intimacy between her and her partner.

What does this mean for business?

What this might mean for employers is that workers who are allegedly sexually harassed in your workplaces may now be more inclined to bring claims for compensation against the alleged harasser and the employer.

To avoid successful claims employers must take ‘all reasonable steps’ to prevent sexual harassment in their workplaces. What are reasonable steps will vary depending on the organisation but may include:

  • a policy that all employees are aware of, have access to and understand that outlines what is and is not acceptable workplace conduct
  • regular, practical face to face training of all employees about sexual harassment
  • a clear and easily accessible process for complaints to be made by anyone in the organisation, and
  • appropriate processes for dealing with complaints.