Big increase in damages for sexual harassment (with the Christmas party season approaching, employers need to be aware....)

Cases involving sexual harassment are incredibly sensitive and the Courts feel a higher sense of duty in having to protect those who have genuinely been harassed. It flows logically that the punishment for such behaviour would be quite severe. In a recent decision Richardson v Oracle Corporation Australia Pty Ltd  [2014] FCAFC 82 the Full Federal Court awarded much higher amount of damages to an employee than previously awarded. The award of damages in this case was increased from $18,000 (from the initial decision) to $130,000 to reflect a change in the standards expected from employers to protect employees from such conduct.

In the first decision the judge found that the employer was vicariously responsible for the inappropriate behaviour of a sales representative who sexually harassed an employee, the award of damages was placed at $18,000 for pain and suffering and loss of enjoyment of life.

This decision was appealed by the employee who presented several strong grounds for appeal. The Court agreed with the grounds, and increased damages to $100,000 and added $30,000 for economic loss. The economic loss in these circumstances being because the employee left her job after the investigation.

Coming up short on damages

The Court drew a parallel to personal injury cases citing “community standards”, requiring a higher compensation for pain and suffering and loss of enjoyment of life.

Economic loss

The Full Court also established that there was sufficient connection between the sexual harassment and the employee’s decision to leave her employment. As a result, she was awarded the $30,000 for her loss of income.

Investigation and loss

The Court did not accept the employee’s claim that the investigation that was conducted by the employer caused the employee to leave her job. The Court emphasized that unlawful conduct can be the reason for the investigation process, but cannot be considered to have any effect on how the investigation will be conducted.

Your next steps

Always remember that inappropriate or unlawful conduct of your employees can tarnish your reputation and the welfare of your business. Ensure that all employees receive the appropriate training on what behaviour is forbidden and unlawful in the workplace. Devise and enforce ways to prevent discrimination in the workplace, as well as harassment and bullying.

What Should I Do Next?

Contact us if you would like further legal advice on the conduct of employees in the workplace. Our lawyers at You Legal will be happy to assist you in whatever way we can.

* This blog is for general guidance only. Legal advice should be sought before taking action in relation to any specific issues.