A costly case of sexual harassment

November, 2014

By Clayton Payne

Sexual harassment has many impacts on those who are subjected to it, and their employers – even when those employers have not directly engaged in or condoned such behaviour. There are obvious adverse effects on an employee’s dignity and possibly their health while on the employer side, there are clear implications for employee morale and reputation, not to mention the compensation and legal payments associated with a successful complaint.

We know that sexual harassment can give rise to complaints to the Australian Human Rights Commission or similar forums, but can it give rise to other claims?

A recent New South Wales District Court decision shows that such complaints can also give rise to common law damages claims.

In Trolan v WD Gelle Insurance and Finance Brokers Pty Ltd, the Plaintiff brought a claim in negligence against her previous employer for the psychological injury sustained from the actions of her superior, who was also a director of the employer company.

The Plaintiff also claimed that the employer company breached the duty of care it owed to her as their employee, in failing to provide a safe work environment.

During the period of August and September 2008 the Plaintiff alleged that the employer company’s director engaged in the following conduct:

o      stood behind the Plaintiff and pressed and rubbed his genitals against her bottom;

o      placed his hand up her shirt and grabbed her breast on a number of occasions;

o      suggested she wear dresses more often to show off her legs;

o      placed his hand up her dress and squeezed her bottom; and

o      frequently screamed at her and her colleagues.

The Plaintiff stated that on each occasion she emphatically rebuffed and actively discouraged the behaviour, claiming that she had been subjected to sexual harassment, intimidation and bullying.

At the end of September 2008, the Plaintiff took several days off work on sick leave to deal with her stress and anxiety. The Plaintiff also contacted the director’s wife (another director of the employer company) and urged her to have him stop the behaviour. The director’s wife replied that she would “sort it out”.

When she returned to work during the period of October to December 2008, the Plaintiff alleged that the director engaged in even more overt behaviour.

The Plaintiff developed a psychological illness and consequently left her employment.

The employer company denied liability, and also denied that the alleged events occurred at all.

His Honour Judge Levy found that the Plaintiff had tried to avoid the director’s advances, and found that “ … there was little else she could have done to protect herself without leaving her employment earlier than she did.”

In determining the outcome, his Honour found that a reasonable employer would have taken steps to avoid such behaviour occurring.

The Plaintiff was awarded $733,723 in past and future economic loss and other damages.

Conclusion

Aside from showing that an employer has an obligation to provide a safe workplace, and act on complaints such as those that were examined in this decision, this case points to risk avoidance measures that all employers should contemplate.

In particular, employers should ensure that they have relevant policies and procedures in place dealing with workplace and sexual harassment, and that they are acted upon.

Although in this case the main perpetrator was a director of the employer company, the decision demonstrates that educating all staff about policies dealing with appropriate workplace behaviour will go a long way to prevent adverse conduct occurring and claims arising.

Contact Mills Oakley

For more information, please contact:

Ross Levin | Partner
Melbourne
T: +61 3 9605 0070
E: rlevin@millsoakley.com.au

Malcolm Davis | Partner
Sydney
T: +61 2 8035 7932
E: mdavis@millsoakley.com.au

Adam Lunn | Partner
Melbourne
T: +61 3 9605 0868
E: alunn@millsoakley.com.au

Lisa Anaf | Partner
Melbourne
T: +61 3 9605 0857
E: lanaf@millsoakley.com.au

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