Thursday, 24 March 2022

The Cost Of Workplace Sexual Harassment: Be Prepared For Six Figure Payouts

It is unlawful under the Sex Discrimination Act 1984 (Cth) (SDA) and state-based anti-discrimination legislation for a worker to sexually harass another worker.

Importantly, businesses can also be held legally responsible (and therefore ‘vicariously liable’) under the SDA for acts of sexual harassment that occur in their workplace – unless the business took ‘all reasonable steps’ to prevent the conduct.

We previously explored what is required to take ‘reasonable steps’, as well as the new ‘Stop Sexual Harassment’ claims in the Fair Work Commission, here.

Sexual harassment claims under the SDA are initially made to the Australian Human Rights Commission (AHRC), where a conciliation conference is conducted. If the matter is not resolved, the applicant may commence Federal Court proceedings against the perpetrator and/or their employer.

Compensation Payments for Sexual Harassment

The most commonly sought remedy is financial compensation. This can be for economic loss, and/or general damages for hurt, humiliation and distress.

Prior to July 2014, the general range of compensation awarded by courts for non-economic loss in sexual harassment cases was approximately between $12,000 and $20,000.

Then in July 2014 the Full Federal Court in its decision of Richardson v Oracle Corporation Australia Pty Ltd[1] held that the general range of non-economic damages in sexual harassment claims was no longer consistent with prevailing community standards. The complainant was awarded $100,000 for being subjected to a ‘humiliating series of slurs, alternating with sexual advances’ in 11 separate incidents.

Following on from this, in 2015 general damages of $180,000 were awarded in the case of Collins v Smith[2] in which the perpetrator’s conduct included physical contact, propositions for sex, threatening comments and written communications.

Then in 2019, general damages of $120,000 were awarded in Hill v Hughes t/as Beesley and Hughes Lawyers[3] where a paralegal was sexually harassed by a principal lawyer who engaged in a variety of physical and non-physical harassment.

These cases demonstrate a significant uplift in the general range of compensation awarded by courts compared with awards pre-July 2014. This results in greater expectations in settlement negotiations prior to cases being heard in the Courts.  In a recent example, it is understood former High Court Justice Dyson Heydon’s sexual harassment victims recently secured a six-figure payout from the Federal Government.

Lessons for Employers

Sexual harassment has been unlawful under the SDA since the 1980s. Despite this, sexual harassment remains worryingly common in Australian workplaces, as reported here.

This creates substantial risks to employee health and safety, and can result in losses in productivity, absenteeism and turnover of staff.

This, together with the increase in damages awarded, mean Australian employers must take steps to eliminate sexual harassment in the workplace.

Fundamental steps include:

  • Conducting appropriate workplace sexual harassment training which clearly identifies what expected standards of behaviour are.
  • Implementing appropriate policies and procedures on bullying, discrimination and harassment (including sexual harassment) which meet the extensive legislative and case law requirements.
  • Monitoring behaviour of staff to ensure everyone meets the expected standards of behaviour. Where such standards are breached, this should be addressed swiftly and proportionately.
  • Monitoring health and wellbeing of the workforce and foster a culture where concerns are raised early, to ensure that inappropriate behaviours do not become the norm.

If you require assistance reviewing your current workplace procedures or training in relation to sexual harassment, or addressing concerns of inappropriate behaviour, HR Legal can assist.

[1] (2014) 223 FCR 334.

[2] [2015] VCAT 1992.

[3] [2019] FCCA 1267.


This article was produced by HR Legal. It is intended to provide general information only in summary format on legal issues. It does not constitute legal advice, and should not be relied on as such.