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The Price of Prejudice

It pays to be prepared if sexual harassment rears its ugly head in your workplace


By Elizabeth Ticehurst


The term ‘sexual harassment’ has a ring of the 1980s about it. It evokes images of the bad old days of shoulder pads and big hair, when women were treated as workplace ornaments and expected to conveniently resign when they married or fell pregnant.

Three decades since the introduction of the national Sex Discrimination Act (SDA) in 1984, it may be disheartening to realise that sexual harassment still casts a long shadow on Australian workplaces. Yet community and judicial attitudes appear to be changing, requiring greater accountability from organisations and perpetrators.

The 2014 case of Richardson v Oracle Corporation Australia Pty Ltd and Tucker is often cited as marking a turning point in how seriously courts view sexual harassment and its effects on the victim. The complainant was initially awarded only $18,000 for general damages, consistent with a long history of the courts awarding rather small sums for sexual harassment.

However, on appeal this award was considered “manifestly inadequate”. The appeal court took into account general standards in the community and the awards of damages in cases of workplace bullying, and increased the damages to $130,000.

Large awards of damages such as this do more to hurt the employer than the perpetrator however, thanks to a provision in the SDA (and similar provisions in the equivalent state acts) that holds an employer liable for acts done by an employee “in connection with the employment of the employee”, unless the employer has taken all reasonable steps to prevent the acts. The phrase “in connection with employment” has been so widely interpreted that it can extend to an employee’s actions outside working hours, and even outside of the workplace.

In a recent Queensland case, for example, a tribunal ordered damages of more than $300,000 to be paid to a hotel employee who was sexually harassed by a fellow worker. The victim was sleeping in a hotel room provided by the employer, when she woke to find the hotel’s night caretaker naked in her room making unwanted sexual advances.

Neither employee was working at the time of the incident, but the tribunal found there was a sufficient nexus between the conduct of the caretaker and his employment for the hotel to be found vicariously liable for his actions. Importantly, the hotel had also neglected to take many steps which may have prevented the sexual harassment, including implementing a policy prohibiting discrimination and harassment, and training its workers in that policy. All of this is frustrating to employers – many would argue they can’t reasonably be expected to control their employees’ actions when they are not even present at work – but there are also indications of a common sense approach being taken.

In the 2016 case Mrs Linda Smyth v Northern Territory Treasury and Mr Doug Kerr an employer successfully showed it had taken all reasonable steps to prevent sexual harassment, and thereby avoided liability for its employee’s actions. In this case the complainant argued that a male employee had sexually harassed her at work by touching her inappropriately and sending her offensive e-mails. She alleged that the treasury was vicariously liable for this harassment, as the perpetrator had harassed her at work.

The NT Anti-Discrimination Commission found, however, that the Treasury had taken “all reasonable steps” to prevent the harassment. They had done this by:

  • Having a policy on harassment in the workplace (albeit not a policy that specifically defined sexual harassment).
  • Training employees in the policy.
  • Meeting with the victim and offering support.
  • Giving specific training to the perpetrator in the requirements of the policy, after a complaint was raised by the victim.
  • Monitoring the perpetrator in the workplace and moving him to a different desk.
  • Conducting a mediation.

The Commission noted that Treasury had taken these steps even though the victim insisted she would deal with the matter herself and did not want to make a complaint. They were therefore not vicariously liable for the perpetrator’s actions.

Employers cannot afford to be complacent about sexual harassment. The good news is that being prepared can pay off. Implementing an appropriate policy and taking prompt action to address any issues will be crucial in defending an organisation from liability.


  • Elizabeth Ticehurst is Special Counsel – Employment at KPMG



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