Unwelcome Valentines

A recent sexual harassment case indicates businesses may have a far greater responsibility than they realise

The Australian sexual harassment case of Ewin v Vergara, decided in the Federal Court late last year, has received international attention for highlighting the wide scope of the Sex Discrimination Act.

The following questions were raised by the claim:

  1. What is a “workplace”? Does it include the local pub, or the corridor outside the office entrance?
  2. Is my employer vicariously liable for sexual harassment conducted by somebody else’s employee?
  3. Can I sue my employer, the harasser and his or her employer?

The answers are yes, yes and yes.

Mr Vergara was described by the judge as “an arrogant individual with little or no regard for the truth”. Engaged as an accountant on a short-term labour supply contract, he persisted with sexual advances towards his new boss despite repeated rejections. The unwelcome attention culminated in non-consensual sexual intercourse in the office corridor late one Friday night after an off-site work function involving the consumption of significant amounts of alcohol.

Ms Ewin received an insensitive response from her employer when she complained about Mr Vergara’s behaviour. She subsequently resigned, suffered post-traumatic stress disorder and later sued her employer, Mr Vergara and his employer.

The judge ordered Mr Vergara to pay Ms Ewin $476,000 in compensation, which was reduced to $210,000 when confidential settlements with both employer companies were taken into account to avoid double recovery.

So what can be learned?

To help keep office relationships on the right side of the law, employers should consider the following:

    1. For a sexual harassment claim to succeed there needs to be a connection with the workplace. However, this term is not to be interpreted narrowly. It can include accommodation at work-related conferences, common areas such as building entrances, lifts and toilets, the pub across the road from work and the route from the office to the train station. Even an employee’s private residence can be a work-related area. Businesses need to exercise control over these “work” environments to avoid liability for breaches of the Act.
    2. That liability cannot be avoided by contracting work out through a labour hire arrangement. Anyone who causes, induces, aids or permits a breach of the Act is taken to have committed the unlawful act. Businesses are held vicariously liable for both their employees and agents. The obligation to take all reasonable steps to prevent workplace harassment applies not only in relation to protection of a business’s own workforce, but to protection of any workplace participant whose work environment may be affected by your workforce. It’s therefore in a business’s interests to monitor the behaviour of its workers, regardless of the legal structure of the business.
    3. The capacity for a victim of harassment to sue a sexual harasser personally can be utilised to encourage workplace participants to take their responsibilities seriously. Legislation now allows most Australian workers to make a bullying complaint directly against the bully which carries with it the potential of facing a pecuniary penalty of over $10,000. As in this case, sexual harassment is often a health and safety issue. Currently, breaches of the Work Health and Safety legislation can cost an ordinary employee up to $300,000, or 5 years imprisonment, or both. Mr Vergara, and his family, are now $210,000-plus-costs poorer via the operation of the Sex Discrimination Act. This information should be shared with workplace participants to minimise the risk of harassment and consequent liability.

We can help

DW Fox Tucker can provide you with valuable assistance in this increasingly troublesome area. We offer anti-bullying and harassment training for staff, management and directors, and can also review your policies and procedures. Please contact our Employment team.

For more information, please contact:
Ben Duggan

Ben Duggan
Director
p.  +61 8 8124 1881
e.  Email me

This communication provides general information which is current as at the time of production. The information contained in this communication does not constitute advice and should not be relied upon as such. Professional advice should be sought prior to any action being taken in reliance on any of the information. Should you wish to discuss any matter raised in this article, or what it means for you, your business or your clients' businesses, please feel free to contact us.

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