Company & Director Ordered to Pay Over $260,000.00 in Damages For Sexually Harassing Former Employee

A former employee of a small jewellery store was awarded more than $260,000.00 in damages by Justice Katzmann of the Federal Court of Australia after it was found by her Honor that the employee was sexually harassed during her employment and later victimised by the employer for complaining about the sexual harassment, in contravention of the Sex Discrimination Act 1984 (Cth) (SDA Act).

Among other matters, the Court found that:

1. The director of the employer had developed feelings for the employee.
2. The director had purchased multiple gifts for the employee.
3. On one occasion the director had slapped the employee’s bottom.
4. On multiple occasions the director confessed his feelings of attraction to the employee.
5. After raising a complaint of sexual harassment with the Australian Human Rights Commission, the employee was victimised via written communications made by the director’s lawyer which in effect:

• • Alleged that the employee was taking advantage of the director for financial gain;
  • Sought the immediate return of all gifts the director provided to the employee;
  • Stated that the employee’s claims were frivolous, vexatious and lacking;
  • Accused the employee of theft and taking confidential information;
  • Threatened the employee with taking matters to the police; and
  • threatened the employee with cost orders against the employee’s lawyers.

6. The employee had developed a psychiatric disorder exhibiting symptoms of anxiety and depression.

In breach of the SDA, it was found that a reasonable person would have anticipated the possibility that the director slapping the employee’s bottom, in combination with instances of the director confessing his feelings toward her, that  it would offend, humiliate or intimate the employee, ultimately amounting to sexual harassment in contravention of section 28B(2) of the SDA. Pursuant to section 106 of the SDA, because the company failed to take reasonable steps to prevent the sexual harassment in the workplace it was also held vicariously liable for the director’s conduct.

Furthermore, the directors communications to the employee through his lawyer was found to be detrimental conduct amounting to victimisation in breach of section 94 of the SDA

Justice Katzmann was satisfied that the employee had suffered loss and damages as a result of the directors conduct which amounted to sexual harassment and victimisation, thereby ordering the director and company to pay the employee in excess of $260,000.00 in damages.

It is clear from this case, that employers must establish a zero tolerance approach to sexual harassment in the workplace and take all steps to prevent sexual harassment in the workplace such as implementing workplace policies and providing employees with training on sexual harassment.