In this week’s blog we look at sexual harassment under the Sex Discrimination Act 1984 (Cth)(Sex Discrimination Act) with reference to a recent Federal Court Case in which a company was found to be vicariously liable when its sole director sexually harrassed an employee.
Taylor v August and Pemberton Pty Ltd [2023] FCA 1313
In this matter the Applicant Ms Fiona Taylor (Ms Taylor) claimed that she was sexually harassed and subsequently victimised by her former employer August and Pemberton Pty Ltd t/as Grew & Co (Grew & Co) and its sole director Mr Simon Grew (Mr Grew). The matter proceeded through the Australian Human Rights Commission (AHRC) but was ultimately terminated when the President of the AHRC considered that the matter had no prospects of success of settling at conciliation. This resulted in the matter being filed in the Federal Court of Australia before Katzmann J.
Background
Ms Taylor commenced employment with Grew & Co in January 2018 in a customer service role but over time took on more responsibility and by late 2018 became a “production manager” where she shared the same office space as Mr Grew. Throughout her employment, Ms Taylor reported directly into Mr Grew and was one of 6 employees at the company.
The Respondent in these proceedings Grew & Co, is a small business who manufactures and sells fine jewellery and was established by Mr Grew in 2007.
In August 2018, Mr Grew informed Ms Taylor that he and his wife had separated. From about this time, Mr Grew began to give Ms Taylor numerous gifts, which she alleges were unwelcome. Mr Grew was also generous to other members of staff, although not to the same extent.
In January 2020 Mr Grew revealed to Ms Taylor that he had developed “feelings” for her. She was overwhelmed by the revelation and made it clear to him that she was not interested in a romantic relationship with him.
On 1 June 2020, after driving Ms Taylor home from work, Mr Grew and Ms Taylor had a conversation in which he revived the subject of his January 2020 revelation which caused Ms Taylor considerable distress. Ms Taylor did not attend work from 2 June 2020 until 8 June 2020 and last attended work for Grew & Co on 7 August 2020. Psychiatrists for both parties to the litigation agreed that Ms Taylor suffers from a psychiatric disorder to which the events she described substantially contributed.
On 28 August 2020 in a letter to Mr Grew, through her lawyers Ms Taylor complained that Mr Grew had sexually harassed her throughout her employment. This ultimately attracted a combative response and was the subject of Ms Taylor’s victimisation case.
Sexual harassment case
Ms Taylor alleged that Mr Grew contravened section 28B(2) of the Sex Discrimination Act by engaging in various acts constituting unwelcome conduct of a sexual nature in relation to her and/or making unwelcome sexual advances to her. The alleged acts span her 22 months of employment and can be categorised into relatively discrete categories: the provision of numerous gifts; the making of certain comments and “declarations of feelings”.
Ms Taylor had alleged that throughout her employment Mr Grew had purchased her 19 unsolicited and unwelcome gifts and that he had made certain comments that made her uncomfortable including that she had “bedroom eyes” “a beautiful body” and by telling her “that she is perfect”. The final category of unwelcome conduct was Mr Grew’s declaration that he had romantic feelings for Ms Taylor which occurred on two separate occasions after work in January 2020 and in June 2020. Following the declarations Ms Taylor was “extremely overwhelmed” and uncomfortable and reccounted suffering from anxiety “every day” thereafter.
In evidence Ms Taylor commented that these acts frequently made her “feel sick in the stomach” and that she was worried she would appear rude if she did not seem appreciative of the frequent gift giving.
In addition to the above, it was alleged by Ms Taylor that on 23 July 2019 Mr Grew slapped Ms Taylor on the bottom as she walked through a doorway in their office, before he immediately apologised. Ms Taylor felt extremely uncomfortable and laughed out of shock.
What does the law say?
Section 28A of the Sex Discrimination Act provides that a person sexually harrasses another if:
- the person makes an unwelcome sexual advance, or an unwelcome request for sexual favours, to the person harassed; or
- engages in other unwelcome conduct of a sexual nature in relation to the person harassed;
Under section 28A of the Sex Discrimination Act there are three elements that must be proved for a case to be successful. First it must be proved that the conduct occurred. Second that the conduct was unwelcome to the person harassed and thirdly that a reasonable person would have anticipated as a possibility that the person harassed would feel “offended, humiliated or intimidated”. The intention of the alleged harasser is entirely irrelevant.
Section 28B(2) of the Sex Discrimination Act makes it unlawful for an employee to sexually harass, or harass on the ground of sex, a fellow employee or a person who is seeking employment with the same employer.
Katzmann J remarked that although none of the conduct in question was explicitly sexual in a strict sense (apart from the slap) that this was in no way the end of the case noting that an unwillingness to reject gifts was understandable and accepted that Ms Taylor did not want to offend Mr Grew because she liked her job and wanted to keep it. Her Honour did not find that all of the gifts received by Ms Taylor were unwelcome conduct of a sexual nature however accepted that the majority of the gifts received by Ms Taylor following July 2019 (When Mr Taylor admitted to having feelings for Ms Taylor) were expressions of Mr Grew’s affection for Ms Taylor and his desire to enter into a romantic relationship with her and were therefore, both individually and collectively, either a sexual advance or other conduct of a sexual nature. In substance, they were part of an attempt to woo her.
Whilst Her Honour did not find that all of the comments complained about that constituted sexual harassment given the context in which they were made, based on the unsolicited gifts, several of the comments and both of the declarations of his feelings the court found that Mr Grew had sexually harrassed Ms Taylor in contravention of the Sex Discrimination Act.
Victimisation case
The second case put forward by Ms Taylor was that as a result of her complaint to the AHRC that she was victimised by Mr Grew. Section 94 of the Sex Discrimination Act makes it an offence to victimise a person if they have made, or proposed to make a complaint to the AHRC under the Sex Discrimination Act.
Victimisation simply means that you have been treated unfairly as a result of making a complaint about discrimination or harassment.
It was Ms Taylor’s case, which was accepted by the court, that she had been victimised by Mr Grew through a series of letters sent by his lawyers, which in effect demanded the return of all of the gifted property given to Ms Taylor following her sexual harassment complaint, threatened to have her reported to the police for theft of company property, removed her access to the company’s instagram account and further threatened to seek costs against Ms Taylor and her law firm for being frivolous, vexatious and lacking merit.
Findings and damages awarded
In her judgement, Katzmann J found that Ms Taylor first experienced anxiety following, and as a result of, the initial unwelcome sexual advance on 6 January 2020 and this was escalated after she rebuffed Mr Grew again on 1 June 2020. She also accepted that Ms Taylor suffered from insomnia, reduced energy and poor concentration which affected her work performance from July 2020 and that her symptoms became disabling over the next couple of years.
In finding that Ms Taylor was successful in both cases and in compensation for the above, the court awarded her damages of approximately $300,000 (for general damages, aggravated damages, out of pocket expenses, past economic loss, future economic loss and interest).
Lessons for employers
It is important to note that section 106 of the Sex Discrimination Act renders a person (or company) vicariously liable for unlawful discrimination and sexual harassment committed by its employees or agents unless the employer took all reasonable steps to prevent conduct of that kind.
This means that regardless of whether Mr Grew was a director of the company or simply an employee, that Grew & Co would be liable for Mr Grew’s sexual harassment if they did not take steps to prevent it from occuring.
Although it is not discussed in this case, the reasonable steps that an employer could take to prevent conduct of that kind could include; implementing an up to date sexual harassment and sex discrimination policy, providing ongoing regular training and information on sexual harassment and sex discrimination to all staff and management (including senior management), actively encouraging appropriate conduct by all managers and taking steps to create a positive workplace environment.
In December 2022 the Federal Government established a new positive duty to eliminate workplace sex discrimination and harassment which comes into full effect in December 2023 when the AHRC will gain the power to investigate and enforce compliance.In summary, the new ‘positive duty’ imposes a legal obligation on employers to take meaningful action to prevent workplace sexual harassment, sex discrimination, sex-based harassment, conduct that creates a hostile work environment on the grounds of sex and related acts of victimisation.
The main focus of these changes shift the burden from employees being required to make complaints to the AHRC to address harassment, on to employers to having a ‘positive duty’ to eliminate sex discrimination and harassment from occuring in the first place.
Need further help?
If your business needs help understanding or complying with the new positive duty and ways to implement it, please contact info@eilegal.com.au for assistance.