Case study review: Ewin v Vergara

The Federal Court recently awarded a complainant $476,163 in damages after it was found that she had been sexually harassed in the workplace within the meaning of the Sex Discrimination Act 1984 (Cth) as a result of conduct that occurred outside the physical confines of her employer’s premises and outside of working hours.

The Court’s broad interpretation of the term “workplace” has potentially significant implications for employers and how they seek to manage sexual harassment in the workplace, in circumstances where traditional workplace arrangements are being challenged by increasing numbers of employees working late, working from home and working in jobs that require travel.

The decision of the Federal Court in Ewin v Vergara (No 3) [2013] FCA 1311 related to claims by Jemma Ewin that on a number of occasions she was verbally and physically sexually harassed by Claudio Vergara in the workplace within the meaning of the Sex Discrimination Act 1984 (Cth) (“the SD Act”).

Specifically, Ms Ewin complained of four incidents involving Mr Vergara in or about April and May 2009, whereby Mr Vergara was alleged to have engaged in making continuous and increasingly explicit comments to Ms Ewin not only while at the employer’s premises, but also in the building in which the employer’s premises was located, a taxi and a hotel.

At the time of the alleged incidents, Ms Ewin and Mr Vergara were both accountants working in the business of Living and Leisure Australia Limited (“LLA”). Ms Ewin was employed by LLA whereas Mr Vergara was employed by an external third party agency and was contracted to work for LLA.

Ms Ewin made the sexual harassment complaint after she was sexually assaulted by Mr Vergara in the corridor outside the LLA offices following a work function.

Mr Vergara successfully argued that he and Ms Ewin were not “fellow employees” within the meaning of section 28B(2) of the SD Act since they both had different employers.

As such, Ms Ewin relied on section 28B(6) of the SD Act in support of her claim, which makes it unlawful for a “workplace participant to sexually harass another workplace participant at a place that is a workplace of both of those persons”.

What is a “workplace” for the purposes of the act?

“Workplace” is defined under the SD Act as “a place at which a workplace participant works or otherwise carries out functions in connection with being a workplace participant”.

In defending the claim, Mr Vergara argued that section 28B(6) of the SD Act does not extend to conduct which does not occur during working hours whilst workplace participants are gathered at the workplace for the purpose of undertaking the work and the term “workplace” only extends to premises exclusively occupied and utilised by workplace participants, and not to common areas shared by workplace participants.

In finding that “workplace” under the SD Act does extend to areas such as common areas in the building in which the employer’s premises are located, a taxi and a hotel, the Court recognised that:

“the workplace is not confined to the place of work of the participants but extends to a place at which the participants work or carry out work-like functions in connection with being a workplace participant”.

There was no contention that Ms Ewin and/or Mr Vergara were not “workplace participants” for the purposes of the SD Act, as this term encompasses employees and contractors.

Further, of the four incidents involving Mr Vergara complained of by Ms Ewin, the Court found three of those incidents to be “sexual harassment” within the meaning of the SD Act.

The central question for the Court to determine was whether conduct that occurred not in the physical confines of the employer’s premises, but in the building in which the employer’s premises was located, a taxi and a hotel, could be said to have occurred in the “workplace”.

The Court rejected Mr Vergara’s arguments, particularly his argument that a corridor between the front door of the LLA office and nearby lifts was not a “workplace”, saying that “the objective of eliminating sexual harassment in the workplace would be significantly undermined if, associated common areas such as entrances, lifts, corridors, kitchens and toilets were construed as falling beyond the geographical scope” of the legislation.

The Court awarded Ms Ewin damages in the amount of $476,163, after taking account of the post traumatic stress disorder and other psychiatric injuries Ms Ewin suffered as a consequence of the conduct of Mr Vergara. However, the damages Mr Vergara was ultimately ordered to pay were reduced to $210,563 to account for other payments Ms Ewin received in connection with her claim.

Section 28B of the Sex Discrimination Act 1984 (Cth) defines “workplace” as

“A place at which a workplace participant works or otherwise carries out functions in connection with being a workplace participant.” 

What should employers do in light of this decision?

While the Court was not required to consider the vicarious liability of an employer in Ewin v Vergara, the case provides a number of important lessons for employers regarding the potential scope of the protections for sexual harassment afforded by the SD Act and the potential consequences of not appropriately or effectively managing sexual harassment in the workplace.

There are a number of steps that employers may take to reduce their risk profile in relation to sexual harassment claims. These include:

• developing or reviewing their sexual harassment policies to ensure that the policies are appropriate for their workplace;
• ensuring that the policies apply to conduct that occurs outside of the employer’s premises and outside of work hours that has sufficient connection to the workplace;
• ensuring that employees and managers are trained (or have refresher training) in respect of those sexual harassment policies and the conduct to which they apply; and
• ensuring that allegations of sexual harassment in the workplace are treated seriously and investigated as thoroughly and expeditiously as is appropriate in the circumstances.

These steps can build awareness of the importance of reporting and managing allegations of sexual harassment and assist in building a culture within your organisation where all workplace participants feel supported in making complaints about sexual harassment in the workplace.