In brief

  • With end of year functions well underway, employers need to be particularly vigilant to ensure they respond swiftly and thoroughly to allegations of sexual harassment made by workers.
  • A recent decision of Justice Bromberg, handed down on 5 December 2013, provides a timely example of conduct after a work function constituting sexual harassment.
  • The case centred on allegations of sexual harassment, made by Jemma Ewin (the Applicant) against Claudio Vergara (the Respondent), in contravention of the Sex Discrimination Act 1984 (Cth) (SD Act).
  • Ms Ewin also initially brought proceedings against her employer and the employer of Mr Vergara but these were discontinued following mediation. 
  • As a result, this case is a rare example of allegations of sexual harassment in the workplace under the SD Act, litigated between two individuals.
  • The case is also significant because Justice Bromberg considers the meaning of the 'workplace' under the SD Act.
  • Ultimately, Justice Bromberg found that most of the allegations of sexual harassment were made out and calculated damages at $476,163.
  • Taking into account confidential subsequent material filed by the Applicant, the court yesterday ordered the Respondent to pay the Applicant the sum of $210,563 by way of compensation and interest.

Background

The Applicant and Respondent were both accountants, working in the same offices in Melbourne. The Applicant was employed by one entity, and the Respondent was a contract labourer, employed by a different entity. The Applicant claimed that the Respondent had sexually harassed her, both verbally and physically, in contravention of section 28B of the SD Act. The verbal sexual harassment claim included allegations that the Respondent had propositioned the Applicant using sexually explicit language. The physical sexual harassment claim was based upon an allegation that, following a work function and separate drinks at a nearby bar after the initial work function, the Respondent subjected the Applicant to unwelcome sexual intercourse and assault at the office they had been working in.

As the Applicant and Respondent were not employees of the same employer, the Applicant relied on section 28B(6) of the SD Act, which makes it unlawful for a 'workplace participant' to sexually harass another 'workplace participant' at a place that is a 'workplace' for both of those persons.1

The fact that the Applicant and the Respondent were both 'workplace participants' within the meaning of the SD Act was not in issue. However, there was some contest as to whether, if the Respondent did sexually harass the Applicant, he did so whilst working 'at a place that is the workplace of both workplace participants.'2 We discuss this further below.

Factual context

The case is noteworthy because it was ultimately tried between two individuals, in the absence of their employers. Whilst this means that the case is not instructive on issues such as when vicarious liability for serious sexual harassment will flow to employers, there are nonetheless some useful lessons for employers arising from the decision.

This was a classic case of one person’s word against another. Both the Applicant and the Respondent, who was self-represented, put forward markedly different versions of events over the course of the 12 day trial. In determining the matter, Justice Bromberg placed great emphasis on independent witnesses’ evidence of the events both before and after the alleged physical assault. He also made findings as to the credit of both the Applicant and the Respondent, ultimately finding that the Respondent was 'an arrogant individual with little or no regard for the truth.'3

The meaning of the workplace

One question to be decided was whether the alleged physical sexual harassment occurred in the 'workplace' of the Applicant and Respondent, given that the conduct occurred at or around the corridor at the entrance to the office4 and after hours following a work function and separate drinks at a nearby bar.

The Respondent contended that the term 'workplace' extends only to the premises exclusively occupied and utilised by the workplace participants of that workplace and not to common areas shared with others (such as employees of other workplaces or the public generally).5 However, having considered the construction of the words of section 28B of the SD Act, Justice Bromberg rejected this contention.6

Further, Justice Bromberg found that the objective of eliminating sexual harassment in the workplace would be significantly undermined if associated common areas such as lifts, corridors, kitchens and toilets were construed as falling beyond the geographical scope intended by section 28B SD of the Act. His Honour ultimately held that:

"the fact that the activity occurred out of working hours or that attendance was not for a work related purpose, does not affect the corridor’s characterisation as the workplace of both Mr Vergara and Ms Ewin…"7

Findings

Justice Bromberg found that two of the three allegations of verbal sexual harassment were substantiated. These allegations related to sexually explicit propositions by the Respondent. However, his Honour did not consider that a suggestion by the Respondent to the Applicant that they should go out dancing and ‘let their hair down’ amounted to verbal sexual harassment. This is because the circumstances did not suggest that it should be characterised as a sexual advance or conduct of a sexual nature. Justice Bromberg accepted that “[a]n invitation to socialise may be objectively regarded as intended to facilitate the opportunity for a sexual advance to be made, but that in itself, is not sufficient to meet the statutory description.”8

His Honour also found that the Respondent engaged in unwelcome physical conduct of a sexual nature, which amounted to sexual harassment of the Applicant.

Damages

Justice Bromberg calculated damages in favour of the Applicant of $476,163 together with interest. However, Justice Bromberg ordered that the Applicant file an affidavit detailing the terms of any settlement reached regarding this matter (ie between the Applicant and her employer and the Respondent's employer), to ensure that the Applicant did not recover twice for the same conduct.  

The amount of $476,163 comprised $110,000 for general damages, making it one of the most substantial awards of general damages under the SD Act. Previous orders for general damages for matters arising under the SD Act have been $90,000 (in the case of Poniatowska v Hickinbotham [2009] FCA 860) and $100,000 (in Lee v Smith [2007] FMCA 59, a case which centred around an allegation of physical sexual assault, which the Federal Magistrate described as rape).

The $476,163 calculated as damages in this case also included $293,000 for loss of past earning capacity and $63,000 for loss of future earning capacity. The Applicant in this case continued to work for a few months following the sexual harassment, before starting an extended period of unemployment. Based on medical evidence, however, Justice Bromberg found that the Applicant could have returned to work, at least on a part time basis, earlier than she ultimately did. The Applicant's failure to fully mitigate her losses was taken into account by Justice Bromberg in calculating damages.9

Taking into account confidential subsequent material filed by the Applicant, and to avoid double recovery, the court, yesterday, ordered the respondent to pay the Applicant the sum of $210,563 by way of compensation and interest.

Reminders for employers this festive season

As always, employers should ensure that:

  • their systems support and encourage the immediate reporting of inappropriate workplace behaviour,
  • any complaints of sexual harassment are quickly and thoroughly investigated and addressed, and
  • such investigations occur, even where the complainant does not want action to be taken and says that he / she can deal with the issues themselves.

Further, employers need to be aware that the approach taken by various respondents in matters of this nature can differ. A respondent employer should carefully consider all competing factors in determining whether or not it is appropriate to attempt to resolve or settle a matter early.