Do you have a spare $268k lying around?

Sexual Harassment Case

A Sydney based jewellery shop and its owner have been ordered to pay a record breaking $268,000 in damages after the Federal Court found an employee had been subjected to sexual harassment and victimization. The court also ordered the employer to pay the employee’s legal costs.

The case outlined that an employee sought legal advice when her employer confessed romantic feelings toward her, and continued with unwanted advances after she had made it clear she was not interested.

The employee reported that her employer made comments about her appearance, sent inappropriate text messages, gave her thousands of dollars’ worth of unsolicited gifts and had touched her inappropriately.

Following the employer again expressing his romantic feelings toward the employee while driving her home from work, she began to experience anxiety and insomnia. After taking a week off work, the working relationship began to deteriorate, and not knowing what to do, sought external legal advice.

During the court’s investigation, text messages sent between the employer and employee were examined and Justice Katzman found that the employee’s account of harassment and its impact were genuine.

The court found in favour of the employee and ordered the business to compensate the employee with $140,000 in general damages for hurt, humiliation and distress, $15,000 in aggravated damages, $23,070 for past economic loss, $46,284 for future economic loss and $3000 for future out-of-pocket expenses. Additionally, $40,000 in damages were ordered due to victimization. The court found that after lawyers wrote to the employer regarding her complaint, the employer demanded that all jewellery she’d been given be returned. This was seen by the court as retribution for the fact that she had made the complaint.

This record breaking payout exemplifies the stricter approach to workplace harassment and is a timely reminder of the obligations of employers to eliminate sexual harassment. It shows that being small and not having internal HR does not mean you can get away with it.

Justice Katzman acknowledged that “people may not complain about a sexual assault for a host of reasons” and that “sexual harassment is notoriously under-reported”, however, this is no excuse for not investigating complaints or for poor behaviour to continue. The court also reaffirmed the importance of policies and processes to guide employees about raising concerns and feeling safe to do so.

The timing and lessons from this case are significant for employers, because on the 12 December 2023, the Australian Human Rights Commission (AHRC) will have the power to investigate and enforce compliance with employers’ positive duty obligation toward sexual harassment.

What is Positive Duty?
In December 2022, the Sex Discrimination Act 1984 (Cth) introduced a positive duty on employers and PCBUs to take all reasonable and proportionate steps to eliminate:

• Workplace sexual harassment, sex discrimination and sex-based harassment;

• Conduct that amounts to subjecting a person to hostile workplace on the grounds of sex;

• And, certain acts of victimization.

Employers need to be able to demonstrate that they have taken all reasonable and proportionate measures to stop unlawful conduct from occurring. This should include, but is not limited to, policies, training, and robust internal reporting procedures. Along with these factors, employers are strongly encouraged to take positive action in relations to the AHRC’s guidelines for complying with the positive duty.

This record-breaking decision demonstrates that just because you are a small business or that there are no formal complaints, does not mean that you can be complacent.

If you are worried that you are not fulfilling your obligations as an employer or that your practice could be at risk, please reach out to the HIES team on 07 3386 6488 or email [email protected]. We will be helping many members through this process, and we will be able to assist you too.

To read the full case of Taylor v August and Pemberton Pty Ltd [2023] FCA 1313 (31 October 2023) click here

Click on the link below to purchase an up to date HIES drafted policy that addresses unlawful workplace conduct as well as the AHRC’s guidelines.

If you are a HIES member, please contact us for member pricing of this policy or download from the member portal.