In Richardson v Oracle Corporation Australia Pty Ltd [2013] FCA 102, the Federal Court held that Oracle was vicariously liable for the prolonged sexual harassment by its employee, Mr Tucker. The Court held that the policies and training methods that Oracle had in place to prevent sexual harassment were inadequate in the context of Australian anti-discrimination legislation.

Background

The complainant, Ms Richardson alleged 10 separate instances of sexual harassment by Mr Tucker, a sales representative. The Court accepted that Mr Tucker’s conduct amounted to sexual harassment within the meaning of the Sex Discrimination Act 1984 (Cth) (SDA). A person sexually harasses another person if:

the person makes an unwelcome sexual advance, or an unwelcome request for sexual favours, to the person harassed or engages in other unwelcome conduct of a sexual nature in relation to the person harassed”.

Mr Tucker’s conduct was primarily in the form of verbal harassment, but also included text messages and phone calls. Statements held by the Court to constitute sexual harassment included:

  • “Gosh Rebecca, you and I fight so much... I think we must have been married in our last life”
  • “So, Rebecca, how do you think our marriage was? I bet the sex was hot”
  • “We should go away for a dirty weekend sometime”.

The Court went on to consider the extent to which Oracle was vicariously liable for his conduct, as his employer. Under the SDA, an employer is liable for sexual harassment by its employees, even if these acts are outside their actual or ostensible authority, unless the employer can prove that it took all reasonable steps to prevent such conduct occurring.

Oracle’s defence

Oracle argued that it had taken all reasonable steps and gave evidence of the following procedures that were in place to prevent sexual harassment:

  • all employees received a copy of Oracle’s “Code of Ethics and Business Conduct” which made special reference to Oracle’s commitment to a harassment-free work environment;
  • online sexual harassment training, which was mandatory for employees to complete every 2 years, and which Mr Tucker had completed twice since his employment at Oracle commenced; and
  • effective investigation policies, including the process that commenced once Oracle became aware of Mr Tucker’s conduct towards Ms Richardson.  He received the highest disciplinary action from Oracle short of dismissal.

The Court’s decision

The Court found the online training program, which Mr Tucker had taken in 2007, was deficient because it failed to:

  • clearly emphasise that sexual harassment is against the law;
  • state the relevant legislative source in Australia for the prohibition on sexual harassment; and
  • impress upon employees that an employer may be vicariously liable for such conduct and as such has a strong interest in adherence to the legislation.  

The Court felt that Oracle had failed to take all reasonable steps because the deficiencies identified were subsequently rectified in November 2008, when Oracle updated its policy using guidelines published by the Human Rights and Equal Opportunity Commission in 2004. The Court’s suggestion is that, given this information was available in 2004, it would have been reasonable for Oracle to implement such adjustments much earlier.

The Court ordered Oracle to pay Ms Richardson $18,000 in general damages to compensate her for non-economic loss in the form of physical and psychological consequences of the harassment. The Court considered a range of evidence including that of two psychiatrists and Ms Richardson’s psychologist. 

Ms Richardson’s claims for economic loss were not made out. These had been based on claims that she had been demoted or that her contract of employment had been breached, as a result of Mr Tucker’s conduct.

Lessons from this case

Employers should ensure that their policies and procedures to prevent harassment in the workplace are up to date and appropriate within the Australian legislative context. This is of particular importance to foreign corporations operating in Australia, where special effort should be made to make sure that policies that are in place are tailored to meet the specific requirements of different legislative contexts.

Further, employers must make certain that all employees are adequately versed (ideally through annual training) in the laws that apply to sexual harassment. These steps are necessary to help employers avoid vicarious liability for sexual harassment.