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Sexual harassment: Damages awards keep mounting

Sexual harassment: Damages awards keep mounting

The amount of general damages awarded in sexual harassment cases is increasing at a rapid rate. In the past, damages awarded in sexual harassment cases have been ordered at a low level.

There has been a large difference between the general damages awarded for sexual harassment and other cases outside of discrimination law.

Normally be in the order of under $10,000, in recent years the damages awarded to employees alleging sexual harassment at work have increased due to community concern that the amounts did not reflect the true extent of how damaging sexual harassment is.

General damages are damages provided for non-pecuniary loss such as pain, suffering and loss of enjoyment of life. The case of Richardson v Oracle Corporation Australia Pty Ltd [2014] FCAFC 82 (Richardson) was a significant decision that set a new precedent for the amount of general damages awarded in sexual harassment cases. The amount of damages now being awarded by the courts has increased significantly to reflect the change in community standards and expectations in responding to such claims.

Richardson v Oracle

In the Richardson case the applicant brought a claim against an employee of Oracle Corporation Australia Pty Ltd (Oracle) for sexual harassment, as well as a claim for vicarious liability against Oracle itself.

Before the single judge, Richardson was awarded $18,000 in general damages. On appeal, it was held by the Full Court of the Federal Court of Australia that this was “manifestly inadequate” and an award of $100,000 for general damages was substituted.

Justice Kenny said that the range of general damages being awarded in sexual harassment cases “does not reflect the shift in the community’s estimation of the value to be placed on these matters.” It was further found that an award of general damages within the historical range “may be manifestly inadequate as compensation for the damage suffered by the victim, judged by reference to prevailing community standards.”

Ultimately the Court upped the amount of damages from $18,000 to $100,000 because the circumstances had changed—Australian society had determined that the previous approach to low damages was out of touch with modern reality.

Cases since Richardson?

More recent cases have followed the approach set by Richardson. By way of example, in the Victorian case of Collins v Smith [2015] VCAT 1992, it was held that a similar analysis to that in Richardson should be undertaken in respect of the Equal Opportunity Act 2010

(Vic). In this case, when determining the general damages to be awarded, Judge Jenkins had regard to the approach now taken in discrimination cases “which emphasises the importance of having regard to the general standards prevailing in the community for loss of enjoyment of life, and the experience of pain and suffering.”

The applicant was awarded $180,000 in general damages and $20,000 in aggravated damages.

Another example is Matthews v Winslow Constructors (Vic) Pty Ltd [2015] VSC 728 awarded Ms Matthews $380,000 in general damages as a result being subjected to abuse, bullying and daily sexual harassment that resulted in her being diagnosed with major depressive disorder, significant chronic post-traumatic stress disorder and bipolar II, as well as constant grinding of the teeth. The order was largely because the evidence of psychological damage the applicant suffered.

There have been two cases heard in the Queensland Civil and Administrative Tribunal (QCAT) where applicants have received larger amounts of general damages. In one case, Green v State of Queensland, Brooker and Keating [2017] QCAT 008, Member Gordon considered the extent to which the precedent set by the Richardson case should be followed. In the judgment, it was held that, although there were no material differences in the legislation and statutory provisions that apply to the QCAT and the Federal Court, the damages awarded in the QCAT in other areas of law, such as personal injury, should be followed rather than the precedent set in the Richardson case. Despite this, the general damages awarded in this case were still significant, being $70,000.

Lessons

Employers can and have been held vicariously liable for sexual harassment, as well as other inappropriate behaviour, in the workplace. There has been a significant increase in the general damages awarded for sexual harassment to reflect community expectations. Looking the other way on such behaviour and not ensuring that the workplace is safe for employees can result in a major financial liability for the company.

In order to eliminate the risk of such behaviour and the potential liability associated with it, employers must have clear anti-discrimination, harassment and bullying policies in place and ensure that employees are provided with regular training about appropriate behaviour.

Employers that can evidence the steps they have taken to ensure compliance will reduce their liability and risk of such claims arising that may cripple the company.


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