Employer ordered to pay $150,000 to harassed employee

An employer has been handed a massive penalty after being found vicariously liable for the sexual harassment and assault of an employee by a colleague, in a recent Victorian Civil Administrative Tribunal judgment.

A female beauty therapist employed at ‘Man Oh Man’ suffered persistent sexual harassment from a colleague over her entire 11-month employment at the company. She made two separate complaints of the harassment, before ultimately resigning from employment when the harassment eventuated in an assault. The employee lodged a complaint under the Victorian Equal Opportunity Act 2010, claiming that Man Oh Man and its sole director were vicariously liable for the harassment.

The Employer at no time of the proceedings disputed that the harassment and assault occurred. However, they argued that they were not vicariously liable, because of insufficient detail in the employee’s complaints at the time they were made. The employer pointed out they had an employee handbook, containing anti-discrimination and sexual harassment policies, which formed part of an employee’s induction. Further, the Employer alleged they spoke to the perpetrator following each complaint, who apologised.

In finding the Employer vicariously liable, Member Scott of the Tribunal described the Employer’s responses to the employee’s complaints as manifestly inadequate. The Employer did not conduct an investigation, issue a warning letter or threaten any kind of disciplinary action.

Although accepting that the handbook existed, Member Scott noted that there were no records of employees reading it, nor was there evidence of the perpetrator receiving additional training following the complaints. Member Scott ruled that simply making the policies available electronically and rudimentarily discussing them with new employees fell short of reasonable precautions against workplace harassment.

Member Scott found that had the Employer conducted a proper investigation then it is likely that later sexual harassment and assault would never have occurred.

The Tribunal ultimately awarded the Employee the sum of $150,000 in general damages, to be paid entirely by the Employer. Member Scott described the sum as ‘far from excessive’ as the employee was still suffering from PTSD and associated mental health conditions to this day.

EMA Legal can assist employers with reviewing and updating their workplace harassment policies.