Termination

XXX Rated Conduct in the Workplace Unacceptable: Employee Awarded $1.3 Million in Sexual Harassment Case

The Victorian Supreme Court (“Court”) has handed down a landmark decision awarding a female employee, Kate Matthews, who had worked in the construction industry for Winslow Constructors Pty Ltd (“Winslow”) a payment of $1.3 million for abuse, bullying and unwelcome sexual conduct suffered by her over a two-year period while she worked for the company as a roadside labourer.

Ms Matthews, who at the time of her employment was 35 years of age, commenced working as a labourer for Winslow in 2008. While with Winslow, Ms Matthews was subjected to offensive remarks and conduct of an inappropriate sexual nature including the being:

• shown pornographic material by fellow employees and asked, “Would you do this”?
• asked about her romantic life including if she enjoyed using sex toys during intercourse.
• asked whether she had breast implants.
• groped and having sexual acts performed on her from behind.
• threatened about being followed home and raped.
• told by fellow employees that they fantasised about her while masturbating.

Ms Matthew’s endured these forms of sexual harassment on an ongoing basis for a period of almost two years. At the hearing, the Court heard evidence that Ms Matthew tried very hard to bring the relevant behaviour to the attention of her employer, but her complaints were “laughed off”. As a result of the harassment and the company’s failure to address her concerns, Ms Matthew’s suffered psychiatric and psychological injuries including a major depressive disorder together with a post-traumatic stress condition. Ms Matthew’s also suffered a psychical injury to her jaw as a result of muscular hypertension and grinding her teeth which, based on the medical evidence, was caused by the stress and anxiety she had suffered and continue to suffer.

Initially Winslow contested vicarious liability of the claims. However, during the course of the proceedings the company advised the Court that it admitted negligence. Accordingly, Justice Forrest awarded Ms Matthew’s $380,000 as general damages in respect of the negligent conduct, and a further $980,000 in compensation for lost income and loss of earnings capacity.

While sexual harassment cases have been traditionally brought in Australia under the Sex Discrimination Act 1984 (Cth) and other State human rights legislation, this important decision demonstrates that legal action against employers for sexual harassment claims can be properly founded in negligence. This particular case is especially important as it highlights the need for employers to act quickly and professionally when they receive, or have knowledge about, inappropriate sexual conduct in the workplace. Until the decision in Richardson v Oracle Corporation Australia Pty Ltd [2014] FCAFC 82 (“Richardson”), the amounts being awarded by the Courts as damages in these types of cases has been significantly lower than other instances of harm caused to individuals. Until the Richardson decision the largest award of damages for sexual harassment ever awarded by the Court in Australia was $466,000 in Poniatowska v Hickinbotham [2009] FCA 680. Although in Richardson the Court awarded $100,000 in general damages, it recognised that the law was out of step with the current reality. This case has gone considerably further in awarding $380,000 in general damages and over $1 million dollars in total to a complainant of sexual harassment.

One of the key lessons illustrated by this case is Winslow’s failure to investigate or take any remedial steps to stop Ms Matthew’s being the subject of sexual harassment by other employees and contractors. The case law in this area consistently shows a trend among employers to “turn a blind eye” to sexual harassment despite serious obligations to provide a safe workplace and prevent such conduct from occurring. To continue to do so may now be extremely costly for employers.

As we embark on a new year, we ask that you consider whether your business, its employees and managers would benefit from receiving training on their duties and responsibilities at work. Sapphire Legal offers a range of training modules, including on Appropriate Workplace Behaviour, which can be tailored to the specific needs of your organisation. Our legal professionals deliver comprehensive onsite training in all aspect of employment and industrial law and would be pleased to assist. For more information, please contact us.

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