Damages for Sexual Harassment: A New Era?

Winds of change are sweeping through the sexual harassment landscape, with significant implications for employers and employees alike.

In July, the Full Court of the Federal Court delivered judgment in Richardson v Oracle Corporation Australia Pty Ltd, awarding damages of $130,000 (including $100,000 for general damages alone) to a former employee of Oracle who had suffered sexual harassment in the workplace.

Ms Richardson was based in Sydney, but in 2008 was frequently required to work on a project in Melbourne. During their first face-to-face meeting, an employee of the Melbourne office, Mr Tucker, commented in front of other colleagues: ‘Gosh, Rebecca, you and I fight so much … I think we must have been married in our last life’. This remark was followed several days later by: ‘So, Rebecca, how do you think our marriage was? I bet the sex was hot.’

Over the following months, Ms Richardson ‘was subjected to a humiliating series of slurs, alternating with sexual advances, from Mr Tucker which built into a more or less constant barrage of sexual harassment.’ After initially attempting to defuse the harassment herself, Ms Richardson made a formal complaint to the Human Resources Department, yet was still required to maintain contact with Mr Tucker. Eventually, Ms Richardson resigned and brought a number of claims against Oracle in the Federal Court, including for sexual harassment, indirect discrimination, victimisation and breach of contract.

Section 106(1) of the Sex Discrimination Act 1984 (Cth) provides for the vicarious liability of an employer where an employee or agent, ‘in connection with the employment of the employee or with the duties of the agent as an agent’, commits an action that would be considered sexual harassment by the Act. Accordingly, where sexual harassment occurs in the workplace, the affected employee will have a strong prima facie case against the employer.

However, s 106(2) allows the reasonable steps defence — that is to say, an employer will not be vicariously liable ‘if it is established that the person took all reasonable steps to prevent the employee or agent from doing acts of the kind’ discussed above.

Unhappy with the amount of compensation, Ms Richardson appealed to the Full Court of the Federal Court. The Court’s recent acceptance of her appeal, and grant of significantly increased general damages, has sent shockwaves through the employment law field, greatly heightening the financial risks to employers and making litigation a more viable option for sexually harassed employees. Read More.

First published in Ethos, the ACT Law Society’s journal.