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Sexual harassment appeal turns $18,000 into $130,000

22 July 2014

In a landmark Full Court ruling last week, the Federal Court has “upped the ante” on compensation awarded in cases of sexual harassment.

Justices Kenny, Besanko and Perram upheld an appeal by a female complainant in a sexual harassment case which was brought against a male colleague and the employer, a large software company, which was deemed to be vicariously liable for the conduct.

In the original case, the woman was awarded compensation of $18,000 to be paid by the employer for pain and suffering caused as a result of the sexual harassment she experienced at work.

In finding the employer vicariously liable in the original case, the Judge noted:

Amongst the criticisms available of the contents of the global online training package which [the First Respondent] undertook in October 2007 are the fact that it made no reference to the legislative foundation in Australia for the prohibition on sexual harassment stated by [the Employer]; made no clear statement that such conduct was unlawful; and made no statement that an employer might also be vicariously liable.

At appeal, the complainant was awarded a higher compensation sum of $130,000 to be paid by the company which had “failed to show that it took all reasonable steps to prevent” the sexual harassment from occurring.

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In appealing the decision, the employee asked the court to reconsider whether her resignation from the company was in large part caused by the harassment, plus the significant effects the harassment had had on her personal life, including her relationship with her partner.

In considering its decision, the Court discussed recent cases of sexual harassment, as well as cases of workplace bullying and also current academic commentary on the subject.

Justice Kenny said the range of general damages awards in sex discrimination cases had "scarcely altered since 2000 and does not reflect the shift in the community's estimation of the value to be placed on these matters".

In referring to certain other cases where higher damages were awarded Justice Kenny also noted that other cases "indicate that awards of damages today place a significant value on the loss of enjoyment of life and the experience of pain and suffering".

This case will serve as a stark warning to employers that taking reasonable steps to avoid vicarious liability is imperative. Effective workplace training for managers and staff alongside comprehensive, up to date policies could save pain and suffering for both employees and the organisation.

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