By Dr Laura Sowden, Partner, Anna Ly, Associate, Amber Zhang, Paralegal and Theresa Au, Paralegal

With a series of news reports regarding inappropriate behaviours, largely sexually harassing behaviour, on Western Australian mine sites – it is always a good time to talk about sexual harassment.

It is worth talking about because sexually harassing behaviours create risks, risks to individual’s wellbeing, risks of legal liability for other individuals and businesses and brand and reputational risks long into the future.

What is it?

Australia has state, territory and federal legislation addressing sexual harassment in the civil space. This works in addition to criminal offences under various crimes acts.

Under s 28A of the Sex Discrimination Act 1984 (SD Act), a person sexually harasses someone if:

1. the person makes an unwelcome sexual advance, or an unwelcome request for sexual favours, to the person harassed; or
2. engages in other unwelcome conduct of a sexual nature in relation to the person harassed;

in circumstances in which a reasonable person, having regard to all the circumstances, would have anticipated the possibility that the person harassed would be offended, humiliated or intimidated.

Sexual harassment can be overt, subtle or covert.

Businesses must be aware of the definition of sexual harassment to decide the proportionate and appropriate action take. Otherwise, when taking action the business may be exposed.

The Impacts in the Workplace

Section 28B of the SD Act, prohibits sexual harassment and discrimination in the workplace.

The severity of the impact of sexual harassment can vary ranging from significant social and economic costs for workers, their family, their organisation and the wider community.

Sexual harassment can impact the victims’ mental health from physical and/or psychological trauma, leading to a loss of healthy life.

The implications of sexual harassment can also include financial loss to the employer. This includes leave taken by victims and lowered levels of productivity due to decreased motivation to work and an inability to concentrate due to harassment. The opportunity cost of managers responding to complaints and other costs of internal investigations to business is relevant.

The employer may face reputational damage as clients or consumers become aware of the conduct and develop negative generalisations towards the brand, feeling discouraged from associating with the employer.

For harassers, consequences of sexual harassment may include suspension, demotion, disciplinary action, probation, liability for criminal and civil offences and referral to counselling or training.

Unwelcome sexual conduct may give rise to a range of other tort actions such as assault, battery, false imprisonment, defamation, interference with contractual relations and the intentional infliction of emotional distress.

Criminal offences that may occur relating to sexual harassment include physical assault, sexual assault, indecent exposure, obscene communications and stalking.

Trends in the Past Year

Employment rights Community Legal Centre JobWatch has reported that workplace sexual assault and harassment has increased by 43% in 2021. In 2021, there was an upward trend in damages awarded for sexual harassment.

Done correctly, a termination decision made by an employer will be upheld on the grounds of sexual harassment or other inappropriate behaviour.  In John Keron v Westpac Banking Corporation [2022] FWC 221 – unfair dismissal application was unsuccessful in circumstances where Mr Keron inappropriately touched one employee and verbally abused anther at an offsite workshop and social event.

In a reminder of professional boundaries Australian National University v Scott Morrison [2022] FWCFB 83 – Dr Morrison’s employment was terminated for skinny dipping with a student, oversharing about his sex life with his wife and engaging in sexual intimacy with the student.  On appeal the reason for termination was upheld and comments about Dr Morrison’s lack of honesty in the investigation phase were made. The matter was returned for conciliation within the Commission

In Daniel Matthews v Qantas Airways Limited [2022] FWC 654 (and on appeal in [2022] FWCFB 111) an employee terminated for sexual harassment was reinstated as there was no reason for dismissal. The conduct alleged did not amount to sexual harassment and was unremarkable in the context of giving a first aid demonstration. Basically, it was a huge misunderstanding.

Vicariously liability has resulted in employers paying damages for sexual harassing behaviour:

1. In Oliver v Bassari (Human Rights) [2022] VCAT 329 – allegations of sexual harassment and sexual assault were accepted by the Tribunal and it was determined the employer had failed to take reasonable and proportionate measures to eliminate sexual harassment. An order of $150,000 damages was made in favour of the employee.
2. In Golding v Sippel and The Laundry Chute Pty Ltd [2021] ICQ 14 it was held the Commission erred in law by confining the period of loss to a year from the date when the Appellant stopped working. On appeal the Court held the appropriate loss period was between the end of employment to the last date of the Commission hearing. The Appellant’s damages were increased to $130,000 on appeal and economic loss of $28,702.60 was awarded.

In the case of Yelda v Sydney Water Corporation; Yelda v Vitality Works Australia Pty Ltd [2021] NSWCATAD 107 a poster saying “Feel great Lubricate” with Ms Yelda’s photograph was displayed within Sydney Water for a two month period. This was held to constitute sexual harassment. NCAT calculated Ms Yelda’s losses to be $318,280 but due to the statutory cap could only award $100,000 against each respondent, which included $5,000 in aggravated damages against Vitality Works.

Sexual harassment is likely to continue to be a focus in 2022 with a continued need for cultural change.   We consider safety regulators will continue to focus on sexual harassment as a workplace safety issue, particularly with the change of federal government.

What can businesses and employers do?

Employers have overlapping duties under common law, contract (as an implied term into all contracts of employment unless explicitly excluded), the SD Act and work health and safety legislation.

Employers have a positive obligation to take all reasonable steps to prevent sexual harassment or else they may be held vicariously liable for failing to prevent the harassment. This will likely be enhanced under the current federal Labor Government.

There must be safe work systems and procedures as an overall prevention strategy. By remaining vigilant, employers can stop sexual harassment by addressing unwanted or offensive behaviour early and encouraging early reporting.

This involves:

1. Setting the standard – Employers must have a strong written policy that is readily available reflecting the legislative definitions.
2. Training – Ensuring workplace policies are understood by staff and address all the content they need with training. Employees should be educated about the types of behaviour that constitute sexual harassment and retrained periodically. Oliver v Bassari (Human Rights) [2022] VCAT 329 found that action taken by an employer was insufficient as they merely provided an employee handbook available electronically. Discussion on the matter was rudimentary at just one staff meeting. There was a failure to prevent sexual harassment and conduct a proper investigation.  
3. Complaints process – Employees should be informed of their right to complain about sexual harassment and that any complaint made will be listened to, taken seriously if made in good faith and dealt with appropriately, having regard to the complainant’s wishes.
4. Contractual terms – Employee contracts of employment and policies should reflect the employer’s intention to be legally binding with nature of the policy. The case of John Keron v Westpac Banking Corporation [2022] FWC 221 demonstrates that workplace policies still applied to events after work hours. It was clear to the FWC that both parties intended the employee was to be contractually bound to comply with the relevant work policies and procedures.
5. Risk assessments – take a proactive approach by assessing hazards and identifying risk factors to control risks. This includes monitoring physical and online environments, observing the workplace and leadership culture, conducting anonymous work surveys, undertaking exit interviews and trend spotting.

As always if in doubt seek advice in this challenging area as the legal risks and brand risks for businesses are very real.