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Sexual Harassment

Announcement posted by Harwood Andrews Lawyers 06 Oct 2010

What is it and how can employers avoid it?

Claims for sexual harassment can be brought under both the Sex Discrimination Act (Commonwealth) and the Equal Opportunity Act (Vic). Both Acts set out that a person sexually harasses another person if the harasser engages in unwelcome conduct of a sexual nature in relation to the person harassed, where the person harassed would be offended, humiliated or intimidated.

The David Jones case in Sydney, as well as a recent decision of the Full Court of the Federal Court; Poniatowska, highlight the need for all employers to educate themselves about sexual harassment and put in place as a matter of urgency, polices and procedures to minimise its occurrence at their workplaces.

In Poniatowska the Full Court upheld a record damages judgment in the sum of $466,000. The damages were made up of $90,000 for pain and suffering, $200,000 for past loss of earning capacity, $140,000 for future loss of earning capacity, $3,000 for future medical expenses and $33,000 for interest.

The claim by Poniatowska was made under the Sex Discrimination Act.

Poniatowska was sexually harassed by two male employees. However the Court ordered that the damages be paid by the employer, although it did give the employer a right to seek a contribution from the employees, as well as four other respondents to the claim.

In both the David Jones case and the Poniatowska case the buck stops with the employer. That is because of the notion of vicarious liability. If an employee of an employer sexually harasses another person, the employer will always be sued by the victim of the sexual harassment.

The David Jones case highlights the number of legal actions that can be taken against a large number of respondents if sexual harassment is alleged. Ms Fraser-Kirk has issued Federal Court proceedings not only against David Jones, but against each of the Board of Directors individually, the CEO, the Chief Financial Officer, as well as the Group General Manager – Stores and operations. Different claims are made against each of the respondents.

The causes of actions are complex and various. The claims include:

• misleading and deceptive conduct under the Trade Practices Act and the Fair Trading Act (NSW);

• breach of contract;

• breach of duty of care to provide a safe system of work;

• trespass; and

• a claim in equity as a result of a failure by the employer and the CEO to fulfil promises made at the start of employment.

Curiously Ms Fraser-Kirk has not yet brought a claim in the Federal Court under the Sex Discrimination Act or an adverse action claim under the Fair Work Act. She has foreshadowed that she will bring these claims once compulsory procedures in the Australian Human Rights Commission and/or Fair Work Australia have been completed.

The damages that have been claimed include a claim for punitive damages which is 5% of the profit generated by David Jones between 2003 and 2010 as well as 5% of McInnes’ remuneration during his time as Chief Executive Officer. It is these latter claims that have given rise to speculation that the damages claimed are in the order of $37 million.

Regardless of the outcome of the David Jones case, it does send a message to all employers to take issues of sexual harassment seriously.

An employer can avoid a claim of vicarious liability if it is able to prove that it had policies and procedures in place designed to minimise or avoid the incidents of sexual harassment in the workplace.

However it is not sufficient just to pay lip service to such obligations and merely have a policy in place without providing sufficient training and supervision in relation to the policy.

The cost to an employer of being involved in a sexual harassment case is not just the cost of the claim and associated legal costs, but it is also the disruption to the workplace, the damage to victims of sexual harassment and their families, the adverse affect on staff morale, the damage to the company’s reputation, as well as the damage to the reputation of the directors and employees of the company, and if defended; the time taken by directors and employees to provide witness statements and give evidence in Court.

Given the complexity and variety of causes of action which can be claimed, the time taken to devise adequate policies and procedures to minimise or avoid incidents of sexual harassment in the workplace will provide a tangible benefit to both employers and employees alike. Expert advice ought to be sought to ensure that any policies and procedures that are implemented provide adequate legal protections.

Harwood Andrews Lawyers workplace relations team has extensive experience in advising and representing employers and employees in all aspects of sexual harassment, discrimination and employment laws. Our team is lead by Jim Rutherford, an

accredited specialist in workplace relations law together with lawyers, Rohan Kux and Melissa Whelan.

If you would like further information about Harwood Andrews Lawyers or our workplace relations services please contact:
Jim Rutherford on1800 552 018or jrutherford@harwoodandrews.com.au.