A recent decision of Queensland’s Civil and Administrative Tribunal once again emphasises the need for employers to be proactively engaged in educating workers and addressing sexual harassment issues that arise in the workplace, and the risk of substantial awards of damages in the event they fail to do so. In this instance, the Tribunal found the employer (a hotel) vicariously liable for sexual harassment engaged in by a contractor, who worked for the employer, and awarded over $300,000 in damages.

The scope of vicarious liability 

The conduct in question involved a sexual assault in the early hours of the morning in the accommodation provided by the employer and shared by the contractor and a female employee. This conduct constituted unsolicited acts of physical intimacy and unwelcome conduct of a sexual nature so as to meet the definition of sexual harassment in section 119 of the Anti-Discrimination Act 1991. However, the employer disputed that it was vicariously liable for the assault, on the basis that it did not occur “in the course of work”. The Tribunal rejected this argument, finding that in the case of the contractor’s actions “the course of work” included the hours between 10pm and 6am, as he was on call during those hours and the employer provided him with on-site accommodation to enable him to do this work and therefore he was at that time “a worker performing work”.

Reasonable Steps

The Tribunal also rejected the argument that no reasonable steps could have been taken by the employer and found that the accommodation in which the assault occurred was not only a home, but a place of work. The Tribunal observed that had the employer taken steps to inform its workers of their legal obligations at work (in the broad sense of what constituted a place of work) and conducted training on the subject, it might have avoided being held responsible.

Damages awarded 

This case emphasises that the consequences of inaction on the part of an employer can have significant ramifications. The Tribunal found that the employee suffered a serious and shocking sexual assault, resulting in a number of psychiatric conditions (including PTSD), and awarded $70,000 in general damages. As a result of this experience the employee was unable to work for a number of years, and received compensation for past economic loss for the period of incapacity for work (less worker’s compensation payments) as well as payment for future economic loss due to the impact of her residual PTSD on her ongoing employment prospects.

Lessons for employers

• Vicarious liability can arise not only with respect to the conduct of employees but also contractors.
• The place of work is a broad notion and can include employer-provided accommodation.
• Vigilance is required in ensuring reasonable steps are taken to educate workers about their legal obligations and the standards of behaviour at work.
• The ramifications of sexual harassment occurring at work are very significant, and may result in substantial awards of damages.