Employer to pay $150k for workplace sexual harassment and assault

The Victorian Civil and Administrative Tribunal (VCAT) has echoed the sentiments of Oracle and #MeToo in its recent decision of Kerkofs v Abdallah (Human Rights) [2019] VCAT 259, where it awarded $150,000 in damages to a victim of workplace sexual harassment and sexual assault.

It’s an important reminder for employers to have in place up-to-date policies, procedures and training dealing with sexual harassment and to ensure that any investigations into claims of this nature are properly and thoroughly conducted.

Refresh on Oracle

Following the highly publicised claim by Kirsty Fraser-Kirk against David Jones and Mark McInnes, the Full Federal Court in Richardson v Oracle Corporation Australia Pty Ltd and Tucker [2014] FCAFC 82 acknowledged the community’s strong views regarding the seriousness of sexual harassment in the workplace. In doing so, it set a new benchmark by awarding $130,000 in damages to a victim of workplace sexual harassment. Before Oracle, compensation for victims of sexual harassment was typically in the range of $12,000 to $20,000. But, Justice Kenny noted in Oracle that “it would be too dangerous to rely too heavily on the accepted range of damages awarded, because the community has generally gained a deeper appreciation of the experience of hurt and humiliation that victims of sexual harassment experience and the value of loss of enjoyment of life occasioned by mental illness or distress caused by such conduct”. 

The decision in Oracle demonstrated courts and tribunals willingness to compensate victims for non-economic loss by taking into account “distress, hurt and humiliation” (as noted in our previous article here).

Latest decision of Kerkofs

The Full Federal Court’s reasoning on damages has now been furthered by VCAT in awarding a $150,000 payout, comprised of $130,000 in damages for pain and suffering and a further $20,000 against the employer of a sexual assault victim for aggravated damages. In making the determination, VP Harbison noted that “an award of damages in a case such as this must reflect the need to eliminate sexual harassment to the greatest extent possible in the workplace and encourage the identification and elimination of sexual harassment generally”.

The decision came after VCAT found that the employee’s actions of getting into the victim’s bed and touching her when dropping her home after she collapsed at work was sexual assault, and that the employee’s repeated name calling of “sexy”, “honey”, “baby” and “sweetie” constituted sexual harassment.

VP Harbison stated it was alarming that the employer failed to conduct a proper and independent investigation of the complaint, and that the gravity of sexual assault incident put an onus on the employer to “take immediate action”. Her Honour went on to stress the importance of an employer’s duty to ensure employees are aware of what is and isn’t acceptable behaviour to prevent sexual harassment from occurring in the workplace.

In finding the employer vicariously liable for the conduct of its employee, VP Harbison drew attention to the employer’s lack of reasonable precautions taken to prevent sexual harassment from occurring in its workplace, including its insufficient workplace training on sexual harassment, lack of effective policies and procedures in promoting a sexual harassment-free workplace, and the employer’s failure to act promptly when notified of the incident.

Key lessons for employers

Since 2017, the #MeToo movement has continued to gain momentum around the world and clearly shows the huge public concern about sexual harassment—particularly in the workplace. In early 2018, the Australian Human Rights Commission (AHRC) conducted a National Survey to investigate the prevalence, nature and reporting of sexual harassment in Australian workplaces and the community more broadly (Survey). As part of the Survey, the AHRC confirmed that “the Australian public has rightly demanded to know more about the pervasiveness and impact of workplace sexual harassment and to see concerted action taken to prevent this behaviour from occurring. Government and employers need reliable data to inform their actions and responses to workplace sexual harassment”.

Kerkofs is a timely reminder that the waves of the #MeToo movement are still resonating in the backdrop of Australian workplaces, which are reflected in the higher compensation range of damages being awarded. There is an increased emphasis placed by the courts on considering the pain and suffering caused to victims of sexual harassment and, when determining risk management actions, employers should be mindful of this approach in the assessment of damages in sexual harassment cases.

Further, Oracle and Kerkofs highlight the legislative obligations owed by employers to treat any claims of sexual harassment seriously and promptly, and to ensure that they take all reasonable steps to provide their employees with a safe workplace that is free from sexual harassment.

Employers may be held legally responsible for acts of sexual harassment committed by its employees unless it can be demonstrated that it has taken all reasonable steps to prevent sexual harassment from occurring. What constitutes all reasonable steps will depend on the circumstances, but some proactive measures include:

• having an up-to-date and clear sexual harassment policy in place
• ensuring all employees receive regular training about appropriate workplace conduct
• having appropriate procedures in place to deal with grievances and complaints of sexual harassment, and
• taking prompt, appropriate remedial action when allegations of sexual harassment occur.