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Employment, IR & Workplace Safety News Alert: Preventing sexual harassment - Same responsibility, sextuple the cost

News Alert 18 July 2014

By awarding a former Oracle employee $130,000, the Full Federal Court has dramatically increased the risk to employers of failing to protect employees against sexual harassment in the workplace.

Background

Ms Richardson, the complainant, was working as a consulting manager for Oracle in their Sydney office. Mr Tucker was a sales representative employed at Oracle’s Melbourne office.

Oracle formed a bid team for a major project in 2008. Mr Tucker and Ms Richardson worked together as part of the team from April to December. During this time, Ms Richardson was subject to repeated sexual advances and harassing comments from Mr Tucker.

Ms Richardson approached management and expressed her concerns with Mr Tucker’s behaviour, asking to be removed from the bid team without making her concerns public. Despite this request, Oracle conducted a formal investigation, which included obtaining an apology from Mr Tucker and discussing the matter with Oracle management. Ms Richardson resigned with Oracle in March 2009.

The decision

In keeping with traditional awards for sexual harassment cases, the Federal Court initially awarded Ms Richardson $18,000.

Oracle was found vicariously liable as it failed to ‘show that it took all reasonable steps to prevent Mr Tucker from sexually harassing Ms Richardson’. Ms Richardson remained working on a project in the same team as Mr Tucker whilst an investigation was ongoing. No face to face contact occurred during this time but Ms Richardson was required to maintain contact with Mr Tucker via phone and email.

On appeal to the Full Federal Court, the award was increased to $130,000. In addition, Oracle was forced to pay for Ms Richardson’s legal costs, likely to run into the hundreds of thousands.

In a telling departure from previous case law, the Full Federal Court refrained from determining damages “by reference to some previously accepted ‘range’ in sexual harassment cases”.

The Court declared that prevailing community standards required a more severe penalty and that $18,000 was “manifestly inadequate”.

The song remains the same

This decision serves as an important reminder of the obligation on employers to protect employees under the Sex Discrimination Act 1984 (Cth). The hallmark of a good Human Resources policy that protects employees against sexual harassment remains the same:

  • Efficient Complaints Handling. A process that is understood at all levels and a culture that allows for issues to be dealt with as a priority to ancillary business concerns.
  • Thorough Training. Regular, ongoing training of all employees setting out what is appropriate behaviour and clearly articulating the complaints process.
  • Pragmatism. Ensure the employee’s specific concerns are dealt with. Ms Richardson requested anonymity. The failure of Oracle to adhere to this request added to the loss and damage suffered by Ms Richardson.

What has dramatically changed however, is the exposure an employer can face if it does not take all expected measures to prevent and deal with sexual harassment in the workplace. Where employers do not have adequate policies and procedures prohibiting sexual harassment, they can now expect significant “US style” orders for both compensation and legal costs.

For advice on constructing adequate human resources policy that protects both employers and employees, please contact our Employment, Industrial Relations and Workplace Safety team.


Peta Tumpey, Partner
Sydney

News Alert 18 July 2014
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