One of the objectives of the Equal Opportunity Act 2010 (Vic) (the “Act”) is to eliminate sexual harassment. A recent decision of the Victorian Civil and Administrative Tribunal (“VCAT”) serves as a reminder to employers of the importance of employee training to prevent sexual harassment in the workplace and the need for effective systems to deal with complaints.

Background

An employee, Ms O, alleged that over the course of almost 11 months her co-worker, Mr C, engaged in conduct that constituted sexual harassment at the beauty salon where they both worked. Such conduct included suggestive and inappropriate comments, enquiries, jokes, requests and touching. There was also an incident of sexual assault.

Ms O asserted that she had complained about Mr C’s conduct on two occasions to the sole Director and Office Manager, Ms B, prior to the assault occurring. Ms O alleged that no action was taken to prevent the sexual assault from occurring following her complaints.

Ms O brought a claim in VCAT against Ms B (the “First Respondent”) and her employer, Hebeich Pty Ltd t/a “Man Oh Man” (the “Second Respondent”). Ms O alleged that the First Respondent assisted or authorised the harassment and the Second Respondent was vicariously liable for the conduct of Mr C.

Both the First and Second Respondent denied wrongdoing, while not denying that the conduct occurred at the workplace.

Was the First Respondent liable?

The VCAT considered whether Mr C acted with the approval of the First Respondent. Under the Act a person must not encourage, authorise or assist sexual harassment. Ms O contended that the inaction of Ms B following her complaints regarding Mr C’s conduct amounted to authorisation and encouragement. The VCAT found that in dealing with the complaints Ms B “turned a blind eye and refused to consider” the conduct and in a conversation with Mr C simply told him to keep his distance and respect Ms O as a fellow employee.

The VCAT found that in some circumstances the inaction of someone in a position of authority, such as Ms B, may be interpreted by a perpetrator as a form of tacit approval for their conduct. However, the VCAT did not find such approval, as Mr C was not “aware, either expressly or impliedly” that his conduct was authorised and, accordingly, it could not be seen that he acted with the knowledge of Ms B’s approval.

Was the Second Respondent liable?

The VCAT found that the Second Respondent did not provide any specific training to employees in relation to anti-discrimination and sexual harassment beyond a simple handbook available online. As a result, the VCAT found that the Second Respondent did not take reasonable precautions to prevent the sexual harassment and the response to the complaints were “manifestly inadequate”.

The VCAT also found that had the Second Respondent investigated the first complaint of sexual harassment and monitored CCTV footage, the sexual assault would likely not have occurred. The VCAT found on the balance of probabilities, the Second Respondent failed to take reasonable precautions preventing the conduct of Mr C and thus was vicariously liable.

The Second Respondent was ordered to pay Ms O $150,000 in general damages.

What does this mean for employers?

The decision of the VCAT to award significant damages against the employer demonstrates the need for employers to demonstrate serious action in preventing and responding to sexual harassment in the workplace, particularly the need for workplace training on sexual harassment. The case is particularly noteworthy given no leniency was given for the respondent being a small business. Employers are on notice that regardless of size, sexual harassment workplace training is essential.

Employers should also take steps to ensure that:

• employees have received, read and have a sound understanding of sexual harassment and related policies (for example, by having employees undertake a short questionnaire);
• they conduct regular refresher training;
• they conduct thorough and independent investigations into allegations of sexual assault and harassment; and
• they monitor the workplace to ensure employee compliance with policies.