by Luke Gattuso
Ms Howard alleged sexual harassment by a co-worker, Mr Lewis, during her employment with Geradin Pty Ltd (trading as Harvard Securities) (Geradin). However, the Victorian Civil and Administrative Tribunal (VCAT) found for the employer, even while accepting that harassment actually occurred.
The complaint against Mr Lewis was settled separately, so the case before VCAT was limited to a vicarious liability claim against Geradin, based on Mr Lewis’ status as an employee of Geradin when he harassed Ms Howard.
Facts and claim
Ms Howard was employed as an investment portfolio manager at Geradin for a probationary period of three months.
It was alleged that, at various times during Ms Howard’s employment with Geradin, Mr Lewis made comments to her about her body, and also left a lewd note on her desk. Ms Howard reported the note to her supervisor, which led to an investigation.
Ms Howard resigned shortly after Mr Lewis left the note at her desk and returned to work for her previous employer. She later said that her resignation had been brought about by the sexual harassment, a claim that was denied by Geradin.
Ms Howard claimed that Geradin had failed to take reasonable precautions to prevent Mr Lewis from harassing her, and that it victimised her by involving her in discussions as to an appropriate response. She claimed compensation for pain and suffering, plus $26,000 for loss of income.
While VCAT had little difficulty in determining that the alleged conduct was of a sexual nature, it had more difficulty determining whether the conduct was unwelcome. There was disputed evidence regarding the relationship between Ms Howard and Mr Lewis, the level of sexual banter that occurred in the workplace, and the extent and content of sexually explicit text messages sent between employees. VCAT observed that the willingness of a complainant to exchange sexually explicit text messages with work colleagues would tend to suggest the behaviour was welcome. Notwithstanding the evidential difficulties, VCAT concluded that the alleged conduct had occurred and was unwelcome.
VCAT then considered whether Geradin, as the employer, could be held liable for the sexual harassment. Section 103 of the Equal Opportunity Act 1995 (Vic) (the Act) provides a defence if an employer took reasonable precautions to prevent the employee from contravening the Act. A similar defence applies under sexual harassment legislation in other states.
The Act does not set out the factors that determine whether the employer has taken ‘reasonable precautions’. However, VCAT referred to previous decisions indicating that preventative measures could include:
- implementing educational programs;
- monitoring the workplace to ensure compliance with sexual harassment policies; and
- communicating sexual harassment policies to all employees and ensuring that they understand behaviour that constitutes unlawful sexual harassment.
In this case, VCAT found that Geradin had taken a number of precautions to prevent the contraventions that occurred. VCAT found that Geradin had a sexual harassment policy in place, had informed all employees of the policy, implemented the policy, and provided some feedback to staff concerning sexual harassment issues. As a consequence, the complaint against Geradin was dismissed.
To defeat claims of vicarious liability for sexual harassment, employers must take ‘reasonable’ steps, including having a sexual harassment policy, conducting regular training in the policy, and arming employees with the skills to understand and avoid acts of unlawful sexual harassment. If handled well, the employer can discharge its responsibility and leave the matter to be resolved between the individuals themselves.