Awards for workplace sexual harassment cases are on the rise. What steps can employers take to be proactive and avoid liability? Two case studies show the high cost of doing nothing.

The question of determining appropriate compensation can be difficult in cases of workplace sexual harassment, where the damage might not be obvious or tangible. Courts have tended to be quite conservative, sometimes only awarding nominal damages where a specific injury cannot be proven. However, this looks set to change as there has been a recent trend towards awarding large sums in workplace sexual harassment cases. 

In the following case studies, we look at this emerging trend and the associated liability that employers (and possibly HR managers) face when defending sexual harassment claims.

Late last year, the Victorian Supreme Court awarded over $1.36 million in damages in relation to very serious allegations of workplace sexual harassment and employer negligence. Kate Mathews had been employed by Winslow Constructors, a large construction company. She alleged that Winslow was negligent in failing to provide her with a safe working environment.

The court found that during her employment Mathews was subjected to significant sexual harassment, including being shown pornographic material, being repeatedly questioned about her sex life and a colleague grabbing her hips without her consent and simulating a sexual act. Mathews was also called a ‘spastic’, ‘bimbo’ and ‘useless’.

Everything came to a head in July 2010 when a co-worker threatened her with sexual assault. Mathews was scared and rang the person who she thought was responsible for human resources at Winslow. That person told her to “come to my place and we will have a drink and talk about it.” Later that afternoon, Mathews received a telephone call from a private number, where a male voice (not identified in the Court’s decision) threatened her using obscene and derogatory language. 

Mathews subsequently resigned because of the harassment and was eventually diagnosed with a major depressive disorder, chronic post-traumatic stress and a bipolar disorder. These conditions were found to have been caused by the harassment. She also suffered a jaw injury, as a result of grinding her teeth because of the anxiety she experienced at work. 

Medical evidence presented during the hearing said that Mathews would require psychiatric monitoring for life, and that she was unlikely to ever work again due to the trauma she experienced at Winslow. The psychological trauma was so great that the mere sight of construction workers frightened her. 

All of these factors were combined in calculating the very large amount of compensation that was awarded to her.

Mathews’ claim was brought on the basis of the damage caused by Winslow Constructors’ negligence towards her. In other words, the claim was not based on a breach of any specific legislation. However, there have also recently been significant damages awarded for breaches of sex discrimination law.

Rebecca Richardson had been the subject of multiple incidents of unlawful sexual harassment from her colleague, Randol Tucker. Tucker’s alleged harassment included comments such as: “Gosh, Rebecca, you and I fight so much, I think we must have been married in our past life,” and “So, Rebecca, how do you think our marriage was? I bet the sex was hot.”

Richardson was initially awarded $18,000 by the Federal Court, as compensation for so called ‘general damages’ resulting from the harassment. She appealed the award on the basis that it was inadequate. Her appeal was granted and increased the compensation figure to $100,000. The court’s reasoning was that it would reflect “community standards and expectations.” Richardson was awarded $130,000 in total, including her economic loss.

This reason for increasing compensation awards was also applied in a recent claim brought under Victorian anti-discrimination legislation.

Amanda Collins was employed by David Smith in a post office and developed a close friendship with him. One day Smith attempted to kiss Collins, who replied that she just wanted to do her job and suggested they forget it happened. But Smith continued to pursue Collins over the following four months. Collins consistently indicated to Smith that his behaviour was unwelcome and insisted that they maintain a friendly but professional relationship. 

In examining the circumstances giving rise to the sexual harassment claim, the tribunal emphasised the need for caution when examining a complainant’s conduct. The fact that Collins tolerated Smith’s conduct and repeatedly insisted on maintaining a professional relationship was not held against her. The tribunal’s award included $180,000 in general damages, despite a recognition that the harm caused to Collins was “not the worst one can imagine of sexual interference.”

Defending a workplace sexual harassment claim

Employers should be proactive in taking steps to avoid liability and prevent sexual harassment. At a minimum, employers should ensure that they are:

• Encouraging a workplace culture that promotes a safe working environment for everyone;
• Updating workplace policies in line with anti-discrimination and anti-harassment laws;
• Maintaining clear procedures for complaints and investigations;
• Informing employees of policies and expectations for workplace behaviour through training and education programs that raise awareness on the physical and psychological dangers of sexual harassment in the workplace;
• Responding promptly to any complaints by undertaking investigations to assess the merit of each complaint;
• Taking appropriate disciplinary action against the relevant employee where a complaint is found to have merit; and
• Reviewing policies to prevent these types of complaints occurring in the future.