Addressing unlawful sexual harassment within the workplace is moving higher on the priority list for businesses. Last week, the Australian Human Rights Commission (AHRC) released the results of a national survey into the prevalence of sexual harassment - Everyone’s business: Fourth national survey on sexual harassment in Australian workplaces - and the results were startling. More than 10,000 Australians were surveyed, with 33% reported having experienced sexual harassment in the past five years and 71% having experienced it at some point in their lifetime.

The increasing awareness within the community has come from a number of different angles, including the numerous scandals that have surfaced from the #MeToo movement and the allegations against Harvey Weinstein in the US.

Why this matters to businesses

There are a number of reasons.

Firstly, the general damages awarded by courts and tribunals in Australia to victims of sexual harassment has generally been increasing since around 2013 with one recent case awarding a total of over $156,000 in compensation. Employers can be, and often are, liable for these costs if they do not take “reasonable steps” to prevent sexual harassment.

Secondly, the potential brand damage cost to businesses of publicised allegations of sexual harassment is significant. Reports from the US are that more and more businesses are including “Weinstein clauses” in large merger agreements. These clauses require the seller to not only disclose sexual harassment court cases on foot, but also any allegations of sexual harassment against managers in the recent past.

Following the bankruptcy of accused sexual harasser Harvey Weinstein’s $200 million entertainment company, the clauses are a recognition that businesses can lose significant value simply from having sexual harassment allegations made against senior employees. The clauses are intended to protect a company from brand damage and resultant losses. These are similar to “morality clauses” which have been included in high profile celebrity and athletes’ contracts for many years. These require certain behaviour of the persons in question or the contract can be promptly terminated.

Thirdly, responding to the results of the national survey, the AHRC has recently commenced a year-long national inquiry into sexual harassment in Australian workplaces, with the inquiry including a review of the current legal framework with respect to sexual harassment.

In the UK, a similar parliamentary report into sexual harassment has recently called for the implementation of a mandatory duty to be placed upon employers to take “reasonable steps” to protect workers from harassment in the workplace. Experts are calling for a similar change to the law in Australia which expands upon protections already provided under OHS laws. The current anti-discrimination model in Australia generally leaves the burden of enforcement up to the individual, whereas the proposed UK model places a specific and proactive burden on businesses to protect workers from sexual harassment and proposes penalties and an enforcement regime similar to breaches of current OHS obligations.

Businesses that don’t take sexual harassment in the workplace seriously (and take steps to address it) are leaving themselves exposed to significant “people risk”. By taking steps to address it, businesses will reduce the risk of legal costs, brand damage and get ahead of any potential changes to law within Australia.

Sexual harassment: Top tips on taking reasonable steps

There are a number of things that all businesses can do to demonstrate taking “reasonable steps” and making it clear to employees that sexually harassing behaviour is not acceptable. Here, we discuss our top tips for taking all reasonable steps based on recent case law of sexual harassment claims in the following article.