Recent cases

The recent case of Poniatowska v Hickinbotham [2009] FCA 680 (23 June 2009) again demonstrates it is crucial that discrimination and harassment risks be proactively managed in the workplace. The case shows that if a complaint is not investigated and adequately resolved, it can result in significant damages being awarded against employers.

Ensuring managers are skilled and active in investigating grievances and minimising risks is particularly important now, given the recent inclusion of discrimination rights in the Fair Work Act 2009 (Cth) (the FW Act) and the power of the new Fair Work Ombudsman to investigate these complaints.

Poniatowska v Hickinbotham

Ms Poniatowska was awarded $466,000 in damages after it was found she had been subjected to sexual harassment and sexual discrimination. The Federal Court found that when she complained, she was treated as a “problem to be dealt with”, rather than a victim.

While this case is currently on appeal, and the award of damages has been frozen pending the outcome of that appeal, the comments made at first instance were critical of the employer’s behaviour in response to her complaints. The case clearly illustrates the risks involved in not dealing with complaints adequately.

Ms Poniatowska alleged she was subjected to sexual harassment by two co-workers. The first had sent a number of emails and text messages requesting a sexual relationship. The second had sent her a picture via mobile phone that showed a woman giving a man oral sex, accompanied by the text “U have 2 b better”.

Justice Mansfield found that the employer’s response, upon Ms Poniatowska complaining, was inadequate. It was unsympathetic to her concerns, while treating one of the men who were the subject of the complaint with concern regarding the impact the complaints would have on his marriage. There was found to be no internal protocol or procedure for dealing with such complaints.

After Ms Poniatowska complained of the sexual harassment, the company terminated her employment, ostensibly for poor performance. When examining the process leading to the termination of employment, Justice Mansfield found the company had conducted a “grossly inadequate” investigation into the alleged poor performance.

Among the faults in the investigation was the failure to compare her alleged poor performance against any other employees’ performance in a similar role. Warning letters issued to Ms Poniatowska were found to be unwarranted, and motivated by a desire to set the scene for her dismissal.

As is common in sexual harassment cases, Ms Poniatowska’s claim also involved allegations of discrimination on the basis of sex. Justice Mansfield found that the company, in response to her complaints, treated her less favourably than it would a male employee in similar circumstances. It also discriminated against her on the basis of sex in dismissing her.

The company was ordered to pay Ms Poniatowska’s legal costs of the application, in addition to the $466,000 in damages and interest.

Fair Work Act – discrimination rights

The new rights that exist in the FW Act make it even more important that employers be aware of the risks and be on the front foot in minimising them. The new act provides that an employer must not take adverse action against an employee or prospective employee on discriminatory grounds.

Adverse action by an employer includes dismissing an employee, injuring an employee in employment or altering an employee’s position to his or her detriment. An employer takes adverse action against a prospective employee if they refuse to employ that person or discriminate in the terms and conditions of employment offered. What constitutes injuring an employee in their employment has not yet been determined, and could be quite broad. Discriminatory grounds include a person’s race, colour, sex, sexual preference, age, disability, carer’s responsibilities, pregnancy, religion, political opinion, national extraction or social origin.

While these grounds reflect existing discrimination grounds, the enforcement mechanisms and consequences do not. Employees no longer need to bring a discrimination claim for that action to be prosecuted. An action can now be brought to enforce the discrimination provisions by a union or an inspector for the Fair Work Ombudsman.

A penalty of up to $33,000 can be imposed for each offence.

Fair Work Ombudsman

The new Fair Work Ombudsman has powers to investigate allegations of discrimination. This is the first time that a federal workplace inspectorate has had such powers. The powers include the ability to require employers to produce documents, and the power to prosecute in respect of allegations of discrimination.

Moving forward

The new rights in the FW Act, and the new prosecution powers for the Fair Work Ombudsman, are significant developments. We expect to see the Fair Work Ombudsman and unions being very proactive in pursuing these matters. The ACTU is advertising courses to educate union organisers in relation to the new rights, and the Fair Work Ombudsman has trained specialist inspectors to deal with discrimination matters.

We recommend employers are similarly proactive in training and up-skilling their staff in relation to discrimination and harassment in the workplace.