April 2013 – Update

Employer vicariously liable for employee’s harassment

In a recent Federal Court decision (Richardson v Oracle Corporation Australia Pty Limited [2013] FAC 102) an employer was found to be vicariously liable for the conduct of an employee sexually harassing another employee.

The company had policies addressing sexual harassment and business conduct which employees were trained in every 2 years. However the Federal Court found that the policies lacked critical elements such as specifically stating that sexual harassment was unlawful and that the company can be vicariously liable for employee’s actions.

The company was held in good stead in the Court by being able to show that the allegations, once reported, were properly and thoroughly investigated. Ms Richardson unsuccessfully argued that she had been bullied by HR into making a formal complaint, victimised during the investigation and demoted at the conclusion of the investigation and claimed “substantial” damages as a result. Ms Richardson resigned as a result of this matter and claimed future economic loss as part of her damages. But the company proved that they took appropriate action and were rewarded for this in a minmal order for damages.

Oracle was ordered to pay Ms Richardson $18,000 in damages with a decision on costs being held at a later date.

Lessons for employers arising out of this case are:

  1. Review company policies and documents to ensure they comply with changing legislative obligations; and
  2. When a complaint comes to your attention, ensure that it is handled promptly and appropriately. This may mean having an independent / neutral investigator (either internally or externally) investigate the allegations and report on findings.

Contact Nicole or John at Industrial Relations Law for more information on this or any other employment matter.