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Friday Workplace Briefing

What is Sexual Harassment – Who is Liable and How Much Damages Really Are?

This week Andrew Douglas and Nina Hoang discuss what constitutes Sexual Harassment, who is liable and how much damages really are. The truth following Leung v Chung.

To view the full episode and catch up with the week’s latest news and developments please visit this link.

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About the Hosts

Managing Principal - Victoria

Senior Associate - Workplace Relations

Episode Transcript

Andrew Douglas: Let’s jump onto our next thing, which is the the major theme for today. We’re only raising this because there was a recent case which…

Nina Hoang: Oh terrible, terrible case.

Andrew Douglas: Which I won’t name because I’ll get into trouble.

Nina Hoang: I think we should name it cause it’s just bad. It was an appeal case.

Andrew Douglas: Yeah. It was a case that went before the Victorian Supreme Court and raced into a VCAT decision where a poultry son was awarded for some gross sexual harassment which was a touching sexual harassment. So…

Nina Hoang: It sounds weird.

Andrew Douglas: Yeah, I know. In legal terms, you always divide sexual harassment between non-touch sexual harassment and touch sexual harassment. This was gross. This was grabbing bums.

Nina Hoang: Yes, all right. I think it was like slapping on the butt, grabbing her by the shoulder, giving her shoulder massages, things like that. But it wasn’t like he was trying to really get in her pants. He was just an inappropriate manager. I think, it wasn’t directed in that way. It was a different type which factored into VCATs decision making.

Andrew Douglas: A $13,000 I think.

Nina Hoang: No, 10,000.

Andrew Douglas: Oh, $10,000.

Nina Hoang: And the member said, “Oh, she didn’t deserve more significant damages because it wasn’t as overt as other cases. That was her words.

Andrew Douglas: Yeah. Appalling really. Anyway, went before Michael McDonald’s for appeal, who’s in the Supreme Court and heads employment list, a really competent, highly skilled industrial lawyer before he became a judge. And he quite rightly just looked at it and said, actually you’ve ignored the evidence that actually sits there. You’ve ignored all the tariffs that sit around what are damages. You’ve brushed away aggravated damages and special damages and you shouldn’t have. And I’m going to send it back for someone to look at. The reason we raise it is, it’s pretty hard to believe that someone at VCAT can still not understand properly what sexual harassment is.

Nina Hoang: Yeah.

Andrew Douglas: And not understand, what that means. And so I thought it’s worth just saying, look sexual harassment is unwelcome. Sexual advances, unwelcome, requests for sexual favours or other, unwelcome. Conduct of a sexual nature which makes that person feel offended, humiliated and intimidated. Where a reasonable person would anticipate that reaction in the circumstance. That’s what it is.

Nina Hoang: Yeah.

Andrew Douglas: So touching someone in that manner in any sex is sexual harassment.

Nina Hoang: Yeah. I think what’s really scary is the approach that VCAT took is kind of the approach we see sometimes from employers where they only characterise sexual harassment as the really significant acts on the spectrum.

Andrew Douglas: Yeah.

Nina Hoang: So something very disgusting, but…

Andrew Douglas: Well, it’s an intimidating case.

Nina Hoang: It’s anything that fits within your definition. And I think what Michael McDonald said, that was really good was, “You’re not supposed to focus on the objective seriousness of the act. It’s actually focused on the impact on the victim.”

Andrew Douglas: That’s right.

Nina Hoang: Which is what all the other cases say. And I think that’s also how employers should be looking at it. If someone raises a complaint and you deem it’s not that serious but it’s still sexual harassment. You have to look at it from the lens of how is it impacting your employee not from you personally, how you deem it to be.

Andrew Douglas: Yeah, and look, I think for help everyone should understand and they should go and download it. The Human Rights Commission has a Code of Conduct on it.

Nina Hoang: It’s very helpful.

Andrew Douglas: Code of Conduct. Remember a couple of safety prosecutions have been around sexual harassment. That Code of Conduct references what is reasonably practical for an employer to do, including the state of knowledge you’ve got to have. So in any policy or procedure, you should refer to that code of conduct as being a source of knowledge on it. So, that’s the first thing. I thought I talked to you about a few cases which highlight how bad this case actually was. Kerkofs is a Victorian case and Addallah, and that’s where an allegation was made around repeated misconduct. It was investigated by the director, who undoubtedly was conflicted in the process. The investigation went nowhere. When it went to VCAT, $130,000 in damages was awarded just as general damages because the impact that it actually had on the person can I say Addallah’s case is not far away from the $10,000, in actual facts. That was this other case, which shows how absurd the case was. Yeah. But what Abdullah’s case, Kerkofs and Addallah did concentrate on is when you have an allegation of sexual harassment, the issue of conflict of who investigates is a very real issue. And the fact that this is such a significant nature to the person concerned, you really should have an external and skilled investigator undertake. They didn’t. And that’s where the damages came from. And the damages would’ve been significantly less, if it had been investigated and then dealt with. But it was a quasi victimisation claim then by the failure to actually do that. And I thought we should go back to the Oracle which is Richards and Oracle, which was a judgement of Frank Buchanans who was in the federal court to start.

Nina Hoang: Precedent case for sexual harassment.

Andrew Douglas: Yeah. Which dealt with a skilled professional person of non-touch sexual harassment, but of repeated innuendo and sexualised commentary, had an enormous impact on this woman. She resigned because of it and Frank Buchanan said, “Look, the tariff is $13,000 at the top but we must align this with a common law. We can no longer look at sexual harassment as a something lesser.”

Nina Hoang: Yep.

Andrew Douglas: And he awarded a $100,000 in general damages.

Nina Hoang: Which was huge at the time.

Andrew Douglas: And he also did $30,000 in economic damage because she resigned. So he started to acknowledge the common law method of assessment of damages which is economic loss, medical loss, both past and future. So it’s expanded what the scope was. And aggravated damage occurs when someone does something and they know it’s wrong and they’ve been told not to do it. And just to finish this off, in this awards, there has now been much more significant cases than Oracle and Richardson. And it is not uncommon to see with a non-touch base sexual harassment to be over a hundred thousand. And for a touch base sexual harassment, trying to kiss, pressings themselves on people in excess of $200,000. Okay. That’s just the general damages. Now, if the person is unable to work thereafter, then what you look at is an actuarial table. The loss, the person will suffer from being unable to work. If it’s for the rest of their life, it could be a 2 million, 3 million dollar claim. So the world has changed. And I want people to understand that. The last case I want to talk about is, there are very rare occasions where sexual harassment is raised as a method of attack. In other words, it didn’t occur. It’s a false claim, but it’s a method of preventing performance management or…

Nina Hoang: Ah, Yeah. Yeah.

Andrew Douglas: So, which is the shame and true energy case in the past? Can I just say when someone tells a lie? A lie is serious misconduct. Okay? But courts are most reluctant is what Shay and true energy said in Court of Appeal. We don’t want to create law that prevents people from making complaints. Because most complaints around bullying, harassment, sexual harassment are in part real and other part perception.

Nina Hoang: Yeah.

Andrew Douglas: So sometimes the answer will be no, it did happen. But that’s not sexual harassment. Or you perceive that happen. But that’s actually objectively no, one else would say that. So in those ones it’s not misconduct. It’s actually proper and it’s an appropriate thing to raise a complaint. But where through CCTV or some other means, you’re able to demonstrate what the person is saying is an absolute light. Now remember, that’s a brick and shore test.

Nina Hoang: Yeah, it’s a very high threshold.

Andrew Douglas: Very, very high threshold. You’ve got to be satisfied on reasonable evidence that what that person said could not be true. At that stage you jumped to the stage of dishonesty. At that stage it’s show cause why the person shouldn’t be terminated.

Nina Hoang: Yeah. But it’s not just that it wasn’t true that they’ve then brought the complaint knowingly that they’ve done so. So…

Andrew Douglas: It’s got to be for an ulterior motive as well.

Nina Hoang: Like, the court’s going to view that through a very narrow lens. Because like you said, it’s already so difficult for someone to make one of these complaints. They don’t want to make it more difficult for victims. Genuine victims. Yeah.

Andrew Douglas: And so what is hidden in Shea and TruEnergy is where someone makes up a complaint to execute an ulterior purpose. At that stage, you’ve reached the lie threshold. But it will be very rarely happen. So I just thought I’d raised that for the people who want to discuss that issue. So let’s try this out on a practical problem.

Andrew Douglas: Just so we move on though, just a reminder that all the changes around sexual harassment are coming into effect on the 6th of March. So pretty soon.

Nina Hoang: Yeah. And this case fleshes that out a little bit. So off you go.

Andrew Douglas: We’re back up here, like the chipmunks. There we go.

Nina Hoang: Donna worked as a dentist clerk for OzDrama, a new online video streaming service in Australia, selling only Australian content.

They’re offering allowed payment through PayPal, Apple Pay and usual credit card payment. It was repetitive, high volume work.

She worked in an open office setting. There were 12 people who worked around her. Her boss, Trojan worked in an office nearby. Everyone working around her were women, mostly from backgrounds where English was a second language.

Donna had only worked at Oz Drama for six months. She was 23 and undertaking a part-time undergraduate degree at Swineburne University in fashion and clothing design. She had previously worked as a hairdresser and described her style as Boho.

I can’t believe you know that word.

Trojan was aged 37. He was head of finance, a tough job. Heading finance in a startup is always tough. He built good systems and liked his people. He tried to know something about each person and engage them. His something about Donna was her interest in fashion. He didn’t profess any knowledge or skills. He just asked about what interested her and would listen. Donna welcomed his interests. Things changed a little after Christmas 2022. He commented a few times on her clothes and her style. Always kind. Comments like, “Really, like what you have done with that shirt, you look great.”

His comments became more focused on her attractiveness and increasingly risqué. On one occasion, one of her work colleagues, Ruth said to him in front of the others, “She’s just a kid Trojan, anyone would think she’s your girlfriend. No more, OK?” Ruth laughed to ease the attention. Trojan laughed and Donna blushed and laughed.

Later that day, Trojan called Donna into his office. He sat beside her and said, “Poor old Ruth. You are safe with me. I care about you and want you to succeed. I have your back.”

As he said this he looked straight into her eyes, placed his hands on her knee and smiled. A very soft smile. She made excuses for leaving quickly, saying, thanks, I understand but she didn’t understand. She felt violated and awkward. She went home.

Andrew Douglas: Okay. All right. So that answers the first question. Was Trojan’s behaviour sexual harassment? So let’s go back to the definition. Okay.

Nina Hoang: Yeah.

Andrew Douglas: So it was an unwelcome sexual advance?

Nina Hoang: Yes.

Andrew Douglas: I think the last part was definitely in the sexual advance. Was it a request for sexual favours? No, but implicitly, maybe.

Nina Hoang: Maybe it don’t have to be.

Andrew Douglas:But was it unwelcome conduct of a sexual nature? Absolutely.

Nina Hoang: Yeah. And can I just say, I know you said the last bit was definitely but depending on the situation, the first bit where he just commenting about her clothes could also be sexual harassment. It depends on the person being subjected to it and how.

Andrew Douglas: No, no, I agree.

Nina Hoang: Because it’s a subjective test and I think that’s what people forget. Like I’ve done so many investigations where someone said I was being nice, I was complimenting them. How is that sexual harassment?

Andrew Douglas: Can I just say that classic test is, you’re fine, you say it’s a room of 12 people. Who else did you say it about? And if it’s only the young girl with a, you know, the deep cleavage, then you’re in a bit of trouble. Do you know what I mean?

Nina Hoang: Yeah.

Andrew Douglas: And that’s the case. Every case we deal with where this happens. Okay. The other thing to remember with all forms of sexual harassment is it works in two ways. And I know you’ve heard me say this before, one, it grows quite quickly.

Nina Hoang: Yeah.

Andrew Douglas: But the person’s ability to stop it decreases quite quickly cause their self-esteem drops to the floor.

Nina Hoang: Yeah.

Andrew Douglas: But there’s also some real risk around this. Cause Ruth has actually called him out and yet he still does it and he goes further. So, unquestionably it is sexual harassment.

Nina Hoang: Yeah.

Andrew Douglas: So I just thought we’d ask next question is, well, could Donna make a successful worker’s compensation claim? And the answer is absolutely.

Nina Hoang: Yeah.

Andrew Douglas: Okay. If you didn’t come back to work, just say this online service, this business had remuneration around about 4 to 5 million. Gee that’s around about a 3 or $400,000 premium wack. Over the three year cycle or five years every New South Wales and Queensland. So…

Nina Hoang: Five years.

Andrew Douglas: So this is a big wack if you get it wrong.

Nina Hoang: Especially cause it comes down to the worker’s perception as well, which makes it even trickier. So definitely the insurer would accept this claim.

Andrew Douglas: Oh there would be no, there’s no defence at all to it. It happened during the course of work.

Nina Hoang: Yeah.

Andrew Douglas: There’s nothing to suggest that anything else caused it.

Nina Hoang: And all other people witnessed behaviour.

Andrew Douglas: Yeah. So it’s hard isn’t it? Would Donna have a successful sexual harassment or general protections claim?

Nina Hoang: Yeah, I believe so. Like, he’s definitely subjected her to this behaviour. She could probably claim it against the business too. They didn’t do enough to step in.

Andrew Douglas: That’s right. And remember from, if this were to happen after March, then it would be positive duty.

Nina Hoang: Yes.

Andrew Douglas: Prohibited.

Nina Hoang: Hostile work environment.

Andrew Douglas: Yeah. Hostile work environment’s difficult here. Cause it’s all directed at her.

Nina Hoang: Yeah.

Andrew Douglas: Yeah, so maybe…

Nina Hoang: It just has to be, if you have an environment where someone, a reasonable person would feel uncomfortable and Ruth felt uncomfortable.

Andrew Douglas: Yeah, no, you’re right. So we’ve got enough there. It’s a really easy substantiate claim. It’s witnessed. A lot of sexual harassment isn’t witnessed. So we are just talking about practicalities of it here. So it’s a jump up start is my answer. You definitely bring it and you use federal legislation, not state based legislation.

Nina Hoang: Yeah.

Andrew Douglas: Okay. So it breaches absolutely everything that’s there. You can’t fail. And a good plaintiff’s lawyer would bring it, as a sexual harassments claim. They wouldn’t bring it as an adverse.

Nina Hoang: General protection.

Andrew Douglas: General protection.

Nina Hoang: Wouldn’t general protections not be so much the adverse action but the fact that it’s discrimination?

Nina Hoang: Yeah.

Andrew Douglas: Yeah. Would be, it’s just the difficulty is the damages are much greater…

Nina Hoang: …and lower and gender protection.

Andrew Douglas: So you’d go for that. So this and if you went this path, just say she wasn’t able to go back for a couple of years to work because the damage, she dropped out of her course. I think that’s the next question actually. And she dropped out of her course.

Nina Hoang: I don’t think.

Andrew Douglas: Yeah, no, that’s right. Could Donna seek a stop harassment audit? Yes, she could.

Nina Hoang: Yes. But she wouldn’t go for that. Cause you’d go for the other one to get more damages.

Andrew Douglas: That’s right.

Nina Hoang: And it could go through the court.

Andrew Douglas: Yeah. So stop whatever gives you a kick on to the next stage, the federal court. So yes, she could, if she wanted to. Not, doesn’t preclude her going, off to the sexual harassment claim in the…

Nina Hoang: No it doesn’t.

Andrew Douglas: Jurisdiction. But you probably wouldn’t do it cause she’s already left work.

Nina Hoang: And also there’s not, it doesn’t really do much. It’s like a stop bullying order. They probably just reallocate it.

Andrew Douglas: No, well they could but what it could do is get Trojan kicked out of the office.

Nina Hoang: Oh, I reckon they’ll just redeploy him like they do with…

Andrew Douglas: Yeah, they do. Anyway, you wouldn’t do it. She’s gone, she’s off work. She’s going to make a damages claim. And looking at what her loss is, I’d say her general damages around about 80 to $120,000 at this stage. Economic loss probably at around about $50,000 medical and like 20 or $30,000. That’s if you’re not prosecuted under safety law, that’s just if you make a damages claim.

Nina Hoang: What happens…

Andrew Douglas: And she could be separately prosecuted under safety. It could be separately prosecuted under safety law.

Nina Hoang: So, with the economic loss, Andrew, this is a clearly a part-time job. That’s not actually what her career will be. Say she can’t return to this industry, but she can work in like fashion, which is what she wants to do. Will that reduce the amount of…

Andrew Douglas: It’ll mitigate it. But she’s dropped out of her course.

Nina Hoang: Oh yeah, true.

Andrew Douglas: Yeah. This has destroyed her life. So the other argument is, maybe she can’t get on with her life and she would’ve earned 70, 80, $90,000 and therefore her economic loss claim grows.

Nina Hoang: That’s true. Cause it will depend on.

Andrew Douglas: But that’s consequential. It’s harder to actually measure, but so I’d say her claim is probably worth about $150,000. That’s just for some people.

Nina Hoang: At this point in time…

Andrew Douglas: This point in time

Nina Hoang: It could grow as well. And it’s likely to grow. There’s more medical damage.

Andrew Douglas: There you go.

Nina Hoang: So let’s actually wrap.

Andrew Douglas: Look, thanks very much today. I’m sorry, we went through very old stuff with you.

Nina Hoang: Yeah.

Andrew Douglas: It’s always relevant.

Nina Hoang: Yeah. I think it’s important and it seems to have lost a bit of its focus recently in this case, we saw in VCAT showed that anybody can make the mistake.

Andrew Douglas: Yep, yep.

Nina Hoang: Okay.

Andrew Douglas: Thanks for watching.

Nina Hoang: Next week. See you later.

Andrew Douglas: Thumbs up.

Nina Hoang: Thumbs up.

Nina Hoang: See you later. Buh-bye.

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