12 August 2014
Therese MacDermott, Consultant
Sexual harassment has been the subject of legal regulation for a number of decades, but surveys of employees and other research confirms that it remains a significant problem in Australian workplaces. While we may be making some headway on broader issues of breaking down gender segregation in the workforce and in recognising the need to address the culture of workplaces, harassment at work remains prevalent and under-reported. In this article we explore the introduction of a new campaign sponsored by the Australian Human Rights Commission, a major employer organisation (ACCI) and the trade union movement to tackle the problem, aptly called Know Where the Line Is, and what this tells us about the nature of the problem. We will then look at the issue of employer responsibility, and how we determine “where the line is” for employers, using the recent Oracle appeal to illustrate this point.
A new awareness strategy – “Know where the line is”
The Know where the line is awareness strategy was launched by the Australian Human Rights Commission, the ACTU and ACCI in May 2014. The campaign hopes to empower employees to recognise where behaviour of a sexual nature is unacceptable or inappropriate. The research that the campaign draws on shows that employees do not always identify what has happened to them as being sexual harassment, but what they describe clearly comes within the legal definition of what constitutes sexual harassment. It also shows that employees experience unwelcome and inappropriate conduct of a sexual nature that they find offensive, but that they often do not feel that they are in a position to do anything about it. Even if employees do know that the behaviour in question is not acceptable, at times they do not regard it as serious enough or don’t report it because of fear of consequences for them in terms of their employment and backlash from their colleagues.
What this awareness campaign has highlighted is that the problem of sexual harassment is there in workplaces – notwithstanding it is not always identified or formally pursued as a complaint. This means it may be a potential liability for an employer waiting to be crystalized in a formal complaint. As a consequence employers should not be complacent about a lack of complaints as under-reporting is a problem in itself. Even where an employer has a clear policy, it still needs to overcome a lack of reporting, otherwise an employer is not fully appraised of what is going on in its own workplace, and can not position itself strategically to respond to the problem. What contributes to this is the fact that in many workplaces a certain degree of inappropriate conduct is tolerated.
What constitutes sexual harassment?
Legally sexual harassment it is one area of discrimination law where the legislation is relatively straightforward and establishing the three core elements (unwelcome; conduct of a sexual nature; and the reasonable person test) is not usually difficult, although the facts of what actually went on can be very much in dispute. It is also important to remember that the “reasonable person” test takes the target of the conduct as the reference point, not the person who is said to have engaged in the harassment. Therefore an employer should be careful not to dismiss the response of the particular employee as over-sensitive or out of keeping with what everyone else in that group thinks.
So the problem is not necessarily with the legislative framework itself, but in the recognition of the application of the law to certain conduct and the way in which employers respond.
The employer’s response
Employers need to be alive to the possibility that sexual harassment may be occurring in their workplaces. There is no point saying that you did not know what was going on or that it is only the aberrant conduct of certain individuals. And where there is an enquiry or compliant made it must be treated seriously without minimisation from the outset, the employer needs to be seen to be responding to the problem at the earliest opportunity, and it is made clear that the organisation does not tolerate such conduct. Because the fact that the person has raised an issue of sexual harassment means it has gone past a point where most employees will simply put up with the conduct. It may be the first time the employer has heard about the issue, but in all likelihood has been building for some time.
Employers also need to be proactive in looking for other indicators that there may be a problem; for example patterns of absence, or use of sick leave and annual leave; an overly close-knit work group; or the avoidance of working with certain staff and shift choices. It is also a mistake not to deal with the initial allegations through a full investigation – preferably an external provider to reinforce the impartiality of the process. This offers an early opportunity to get an effective resolution for all parties concerned. And if an investigation is inconclusive an employer shouldn’t wash their hands of the matter, but consider whether there is a need for some form of mediated resolution between individuals or within a workgroup to resolve the underlining issues.
The goal of mediation would not be to rehash the events alleged to have occurred but to focus on how to move forward, minimise the risk of repetition, clear up any misunderstandings and avoid further conflict. This is also an opportune time for an employer to review their policies and procedures and consider reinforcing the lack of tolerance for such conduct through training and development.
However in some circumstances, despite what actions an employer may have taken, in terms of its polices and procedures and efforts to provide a clear message that these are taken seriously and will be enforced, an employer can find itself having to defend its actions in legal proceedings, on the basis that it should not be vicariously liable for any harassment that occurred in its workplace as it took all reasonable steps to prevent the harassing conduct.
“Employers need to be alive to the possibility that sexual harassment may be occurring in their workplaces.”
The oracle litigation
The most authoritative decision on the establishment of an employer’s vicarious liability is at present the Oracle case. The first instance decision examined the global online training package rolled out by the employer, but found it wanting:
“…advice in clear terms that sexual harassment is against the law, and identification of the source of the relevant legal standard, is a significant additional element to bring to the attention of employees in addition to a statement that sexual harassment is against company policy, no matter how firmly the consequences for breach of company policy might be stated. I take the same view about advice that an employer might also be liable for sexual harassment by an employee. That is an additional element emphasising the lively and real interest that an employer will have in scrupulous adherence to its warnings. These elements were absent from Oracle’s global online training package.” (emphasis added)
However the recent appeal of this decision determined on 15 July 2014 adds a further dimension, as it significantly increased the damages awarded in this case. Until this point most litigated outcomes had lead to relatively modest damages awards ranging from about $12,000 to $20,000, except for circumstances where features of aggravation, such as psychological trauma and resulting incapacity for work, were present. From an original determination of damages of $18,000, the Oracle appeal increased the general damages awarded to $100,000 and added $30,000 for her economic loss. This could be viewed as part of a broader trend to valuing more accurately the harm caused to individuals who experience harassment and could serve as a timely reminder that the monetary costs of harassment can be significant, in addition to the brand and reputational damage.
The core message in this context is that employers must bring home to employees that the employer’s policies and procedures on sexual harassment will be enforced, and exhibit sustained efforts to build enduring employee familiarity with these policies and procedures. In addition, the culture of the organisation must clearly be consistent with this message, with breaches of the policy not tolerated or left unaddressed. Moreover the long term damage resulting from harassment can be limited by an early and thorough investigation and an appropriate employer response, but otherwise may lead to a substantial damages award.