From Hollywood to the House of Commons, recent months have seen a wave of high-profile victims of sexual harassment across the globe opening up about their experiences. This outpouring has emboldened victims of sexual harassment not only to call out co-workers for their inappropriate behaviour, but also to call out their employers for not doing more.

It is important to remember that employers can be held vicariously liable for acts of sexual harassment committed in the workplace. In light of this, employers must:

  • take reasonable steps to prevent sexual harassment;
  • ensure that all employees are provided with a safe workplace; and
  • take steps to limit their exposure to the widespread legal, financial and reputational consequences.

This article examines the legal obligations of employers in relation to sexual harassment, offering practical tips on the steps employers should be taking to prevent it from occurring in the workplace, and how to deal with allegations of harassment when they do arise.

What is sexual harassment?

In order to prevent sexual harassment in the workplace and respond to allegations appropriately when they arise, it is essential that employers and employees understand exactly what constitutes sexual harassment.

Sexual harassment is any unwanted, unwelcome or uninvited conduct of a sexual nature that a reasonable person would find offensive, humiliating or intimidating.[1] There is no requirement that the behaviour is intended to humiliate or intimidate, as long as a reasonable person could perceive it as doing so. Further, unlike some other employment-related claims such as bullying, there is no requirement that the conduct is repeated or continuous. For example, insults or taunts of a sexual nature, intrusive questions about an employee’s private life and sexually explicit screensavers can all constitute sexual harassment, even if they only happen once.

Under federal, state and territory anti-discrimination laws, sexual harassment that occurs in the workplace is unlawful.[2] In some circumstances, this can extend to sexual harassment which occurs outside of business hours at work-related activities (such as conferences and office parties).[3]

Workplace relationships

A significant number of Australians meet their partner at work.[4] Given the legal definitions above, a genuinely consensual sexual relationship between two employees is unlikely to ever be considered sexual harassment. This is why most Australian employers have not followed (and are unlikely to follow) the lead of the Australian Government, which recently announced a ban on Ministers having sexual relations with their staff.[5]

Nevertheless, it is clear that some behaviour connected with consensual relationships in the workplace may constitute sexual harassment. For example, if one party calls off a sexual relationship with a co-worker and the other party keeps pursuing the relationship, or other employees overhear or see communications between two co-workers (who are in a consensual relationship) of an explicit sexual nature, then allegations of sexual harassment may arise.

A common approach many employers take is to require employees to disclose to their supervisor or to Human Resources the fact that they are in a relationship with a co-worker. This can allow the employer to put in place measures to ensure conflicts of interest or perceptions of bias are properly managed, and to encourage parties to maintain a professional attitude at the workplace.

What are your legal obligations as an employer?

As mentioned above, employers can be held vicariously liable for acts of sexual harassment committed by their employees if the acts occur in connection with their employment.[6]

An employer will be vicariously liable for the acts of sexual harassment if they fail to take all reasonable steps to prevent the sexual harassment from occurring.[7] Therefore it is incumbent on employers to put steps in place to prevent sexual harassment.

In STU v JKL (Qld)[8], the Queensland Civil and Administrative Tribunal (Tribunal) found that a hotel chain was liable for the conduct of its employee, a night manager who was ‘on call’ when he sexually assaulted a work colleague. The assault, which also constituted sexual harassment, occurred in the hotel apartment owned by the victim’s employer which she shared with the night manager, at the suggestion of the company’s CEO. The Tribunal found that the company had not taken reasonable steps to prevent sexual harassment. In fact, Member Fitzpatrick stated:

“If the [hotel] had taken steps to inform its workers of their legal obligations and to provide the education and training necessary to ensure compliance, then it may have avoided responsibility for the unlawful acts of [the night manager]”.

Member Fitzpatrick also indicated that at the very least, a publicly-listed company like the hotel chain in this case should have had an anti-discrimination policy and an education program for its workers around appropriate workplace behaviour.

What ‘reasonable steps’ should employers put in place?

What will be considered ‘reasonable’ steps to prevent sexual harassment is determined on a case by cases basis, considering factors such as:

  • the size of the company;
  • its available resources;
  • the type of work undertaken by the business;
  • the level of employee supervision;
  • any previous incidents of discrimination or harassment; and
  • any other relevant factors.

However, it is clear from the case law that all employers must take active steps to minimise the risk of harassment occurring in their workplace. We suggest considering the following steps:

1. Ensure you have a clear written policy

Employers should ensure that they have a clear written policy which is effectively communicated to, and understood by, each employee. The policy must make it clear that sexual harassment is unacceptable in the workplace, and employers should also consider including the obligations of bystanders. Where there has been sexual harassment, companies are often scrutinised when other people in the company knew about the harassment, or suspected it was occurring, and failed to act. Having a policy which puts a positive duty on someone who knows about, or reasonably suspects, sexual harassment to take steps (for example by reporting to HR), creates a culture in which the eradication and reporting of sexual harassment is the responsibility of everyone – not just the victims.

2. Implement and embed your policy

Having a comprehensive written policy is only valuable if it is effectively communicated to employees and is enforced. The best way to ensure your policy will be effectively implemented is to garner support from the Board and senior management. This demonstrates to employees that the company is treating the issue seriously, and also creates a healthy culture by setting a good example of the standard of behaviour expected of employees.

The obligation to take all reasonable steps also requires companies to conduct regular training on applicable policies and how they affect the rights and obligations of employees. Training must be relevant to the audience and provide practical examples of what is and isn’t acceptable behaviour. Employers should never assume that all employees will know the required standards of behaviour in the workplace.

3. Conduct an audit

Employers should consider conducting an audit of past sexual harassment claims. This can assist businesses to be aware of any underlying, repeated or potentially ongoing issues. For example, if particular groups of employees are attracting multiple allegations this could prompt further training. If multiple allegations seem to arise out of one worksite or a particular shift, the relevant supervisors could be further trained. An audit can also bring to your attention any cases which were not dealt with satisfactorily. The employer can then act proactively to avoid a situation where victims who feel they have been ignored or not dealt with fairly ‘vent’ on social media and/or share their allegations about the company with the public at large.

4. Put accessible complaint procedures in place

Employers have an obligation to implement accessible complaint procedures administered by trained personnel to ensure that when an employee raises an allegation, all parties involved are treated fairly. This will usually involve conducting an investigation to determine whether any allegations of sexual harassment can be substantiated. It is important to foster an environment in which employees feel comfortable and confident to come forward to their employer with any allegations. Otherwise, employers risk finding about allegations via social media (for example, by an employee posting a #MeToo status). This limits the ability of employers and investigators to ensure procedural fairness to all parties.

Key things to remember when conducting an investigation are:

  • timeliness;
  • the confidentiality of all parties involved;
  • the impartiality of the investigator (in some circumstances this may require an external investigator); and
  • the importance of making a reasonable assessment which is consistent with policies and procedures.

There are three basic requirements to ensure that an investigation is just and fair:

  1. The alleged harasser must be fully informed of the allegations against them, and the process by which the matter will be resolved.
  2. The alleged harasser must be afforded an opportunity to respond and be heard
  3. The decision maker must act impartially, honestly and without bias.

What are the potential implications of failing to take ‘reasonable steps’?

A failure to take reasonable steps to prevent sexual harassment can have devastating effects on the employees concerned. Further, when an employer is held vicariously liable for sexual harassment, there are both financial and reputational implications for the company.

Recently, society has taken a ‘no tolerance’ approach to perpetrators of sexual harassment, quite often simply on the basis of allegations and before any findings are made. Spurred on by the #metoo movement, more high-profile victims have been coming forward, and the public has demanded that perpetrators be appropriately punished for their actions.

A no tolerance approach has also been reflected in the damages awarded by various courts in recent years. For example, in a 2014 case,[9] a female employee was sexually harassed for six months by a male colleague. The Federal Court found that the employer was vicariously liable for the acts of its employee, and ordered that the employer pay the victim $18,000 in compensation. On appeal, the Full Court of the Federal Court found that the damages awarded were ‘manifestly inadequate’ and did not reflect the ‘prevailing community standards’ in relation to the ‘higher value to compensation for pain and suffering and loss of enjoyment of life’.[10] The Full Court ordered the employer to pay $130,000.

In another case before the Supreme Court of Victoria in 2015,[11] a female employee was subjected to bullying and sexual harassment by several colleagues. The employer was found to be vicariously liable. In that case, the employer was ordered to pay a total of over $1.3 million, inclusive of general damages, past economic loss and loss of earning capacity.

Aside from the legal costs, the reputational implications could also have a real impact on a company’s business. For example, in April 2017, Fox News in the United States was forced to axe its biggest show The O’Reilly Factor, which attracted an average of four million viewers each night, when allegations of ‘industrial scale harassment’ were made against its controversial host, Bill O’Reilly. The allegations of sexual harassment triggered a boycott from over 50 advertisers, including Mercedes-Benz, BMW and Mitsubishi, all of whom abandoned the show in light of the claims. A spokesperson for Mercedes said: “The allegations are disturbing … given the importance of women in every aspect of our business, we don’t feel this is a good environment in which to advertise our products right now”.[12]

Another example of the reputational implications of sexual harassment allegations occurred in November 2017, when a former professor of the University of Rochester had sexual harassment allegations made against him.[13] When the University failed to take action to investigate the allegations, over 400 other professors signed an open letter saying that they would be advising future students not to study or work at the University.[14]

3 key steps you can take to minimise the risk of sexual harassment

To minimise the risk of sexual harassment occurring in your workplace, and in order to effectively respond if allegations do arise, employers should take the following three positive steps:

  1. Educate employees on all applicable workplace policies. Ensure there are no past sexual harassment allegations that have not been properly dealt with.
  2. Create a positive workplace environment. Ensure the board and high level management are the major proponents of the culture of ‘zero tolerance’ towards sexual harassment.
  3. Ensure investigations are fair for all parties. Give all involved an opportunity to put their positions, and ensure all findings are supported by evidence and recorded in a written report.

The content of this publication is for reference purposes only. It is current at the date of publication. This content does not constitute legal advice and should not be relied upon as such. Legal advice about your specific circumstances should always be obtained before taking any action based on this publication.