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Chapter 5: Liability - Effectively preventing and responding to sexual harassment: A Code of Practice for Employers (2008)

cover - Effectively preventing and responding to sexual harassment: A Code of Practice for Employers

Effectively preventing and responding to sexual harassment: A Code of
Practice for Employers

Chapter 5: Liability

Contents

Key points
5.1 Personal liability
5.2 Accessory liability
5.3 Victimisation
5.4 Vicarious liability
5.5 How can employers reduce or discharge vicarious liability?

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Key points

Personal liability
Persons or organisations covered by the sexual harassment provisions of the
Sex Discrimination Act are personally liable for:
  • their own acts of sexual harassment
  • any act of victimisation
  • causing, instructing, inducing, aiding or permitting sexual
    harassment (this is called ‘accessory
    liability’).
Vicarious
liability
  • The Sex Discrimination Act states that an employer or principal, including a
    union, is liable for acts of sexual harassment committed by employees or agents
    in connection with their duties unless ‘all reasonable steps’ were
    taken by the employer or principal to prevent sexual harassment occurring. This
    is called ‘vicarious liability’.
  • Reasonable steps must be active, preventative measures.
  • The obligation to prove that all reasonable steps were taken rests with the
    employer or principal.
  • Lack of awareness that the harassment was occurring is not in itself a
    defence for employers or principals.
  • Even when an employer or principal is found to be vicariously liable for
    sexual harassment committed by individual employees or agents the individual
    remains personally liable for their acts.
  • However, in practice, employers who are vicariously liable for sexual
    harassment are generally more likely to end up paying compensation to a
    complainant, because of their greater capacity to pay than the individual
    harasser.
Agents
Depending on the particular details, agents in the area of employment could
include:
  • volunteer workers
  • holders of unpaid honorary positions
  • members of the board of directors
  • contractors and consultants
  • business partners.
Depending on the particular
details, agents of a union can include shop stewards and workplace
delegates.

5.1 Personal
liability

Any individual will usually be personally liable for their own unlawful acts
under the Sex Discrimination Act, and in particular for acts of sexual
harassment and victimisation. In these circumstances, the individual can be held
responsible for their behaviour through an internal complaint process, by being
the subject of a complaint to the Commission or a state or territory
anti-discrimination agency, or through legal proceedings before the Federal
Court of Australia or Federal Magistrates Court.

5.2 Accessory
liability

Individuals and employers can also be held liable under section 105 of the
Sex Discrimination Act if they ‘caused, instructed, induced, aided or
permitted’ an individual to commit an unlawful act. For example, a manager
who is aware that an employee is being sexually harassed and does nothing about
it may be held liable as an accessory to the harassment. There is no defence
available for this type of liability.

Strictly speaking, section 105 only applies to liability for unlawful sex
discrimination, not sexual harassment. However, the courts have accepted that
sexual harassment is a form of sex discrimination. Accordingly, section 105 can
still operate to render a person liable as an accessory to sexual harassment.

Section 105 differs from the vicarious liability provisions discussed below
in several ways. Unlike vicarious liability, an organisation can be an accessory
to sexual harassment even if there is no legal relationship between the
organisation and the harasser such as that of employer/employee. However in
contrast to vicarious liability, an organisation must have contributed to the
sexual harassment in order to be liable as an accessory, either knowingly,
recklessly or through wilful blindness.

[A] person can, for the purposes of s105, permit another person to do an
act which is unlawful, such as discriminate against a woman on the grounds of
her sex, if, before the unlawful act occurs, the permitter knowingly places the
victim of the unlawful conduct in a situation where there is a real, and
something more than a remote, possibility that the unlawful conduct will
occur.
[26]

In effect, a person will be an accessory to harassment if they were aware or
should have been aware that sexual harassment was occurring, or that there was a
real possibility of it occurring, did nothing to address it and thereby allowed
the harassment to take place.

Case example: Employment agency’s accessory liability

An employment agency referred a young woman to employment at a doctor’s
office, despite previous complaints of sexual harassment against the doctor from
earlier clients of the agency. The young woman was then sexually harassed by the
doctor.

The Federal Court of Australia found that the agency had permitted the sexual
harassment to take place. Justice Moore found that the caseworker who referred
Ms Elliot to the doctor’s employment did not have to actually know of the
past complaints of sexual harassment, as the collective knowledge of the agency
officers was sufficient. Justice Moore went on to explain what actions could
have been taken.

There is no reason apparent to me why an employment agency, to whom
several complaints had been made about sexual harassment...by one of the
employers it serviced..., could not either terminate the service or inform the
employer that the agency would tell, as a condition of maintaining the service,
potential employees that complaints had been made and the nature of the
complaints or at least require the employer to put in place measures at the
workplace to stop or at least influence the potentially unlawful
conduct.

This case it is particularly important for employment agencies, as they can
be found liable for sexual harassment that takes place in workplaces not under
their control, if they are aware that there is a real risk of sexual harassment
occurring and they take no steps to reduce that risk. However, any private
sector business may be liable as an accessory to sexual harassment if it permits
the harassment to occur.

Elliott v Nanda & the Commonwealth (2001) 111 FCR 240.

5.3 Victimisation

Section 94 of the Sex Discrimination Act prohibits the victimisation of
anyone connected with a complaint. Victimisation means subjecting a person to
some detriment if he or she has:

  • lodged, or is considering lodging a complaint under the Sex
    Discrimination Act
  • provided information or documents to the Commission
  • attended a conciliation conference or appeared as a witness
  • reasonably asserted any rights under the Sex Discrimination Act of
    themselves or someone else
  • made an allegation that a person has done an act that is unlawful
    under the Sex Discrimination Act.

Examples of victimisation may include:

  • an employee being moved to a position with lesser responsibilities while her
    complaint is being considered
  • a staff member being ostracised by other employees because of providing
    information to the Commission about inappropriate material being circulated in
    the workplace
  • an employee being denied the opportunity of a promotion after unsuccessfully
    lodging a sexual harassment complaint against several of her
    supervisors.

If a person is subjected to some detriment because of
being involved in a sexual harassment complaint, they can make a complaint of
victimisation to the Commission, using the usual complaints
procedures.[27] In some cases, such
as physical molestation or assault, victimisation may also be a criminal matter
and the victim can report the behaviour to police.

5.4 Vicarious
liability

It is a general legal principle that an individual is personally liable for
his or her own unlawful acts. However, in the area of employment (including
discrimination and harassment) employers can also be held liable for wrongs
committed by their employees in connection with their employment. This is
referred to as the principle of ‘vicarious liability’.

Section 106 of the Sex Discrimination Act makes employers vicariously liable
for the unlawful conduct of their employees in connection with their employment.
This means that if an employee sexually harasses a co-worker, client, customer
or other protected person the employer can be held legally responsible and may
be liable for damages unless they took all reasonable steps to prevent the
harassment occurring.

In practice, in most sexual harassment complaints conciliated through the
Commission or cases determined by courts, compensation is paid by the employer,
rather than the alleged harasser.[28] Although the individual harasser will still be liable for their behaviour,
and can be ordered by a court to pay compensation, employers are more likely
than individuals to have the means to pay compensation.

Section 106 also makes a person vicariously liable for the unlawful conduct
of his or her ‘agent’ in connection with the duties of the
agent.

In Horne v Press Clough Joint Venture (see case example in Section
3.4
) the WA Equal Opportunity Tribunal found that the union played a role in
allowing the sexual harassment of the complainants to continue by failing to
support their efforts to have the pornography removed. The union was held liable
for the role played by the union shop stewards, even though they were not union
employees. It was found that the shop stewards were acting as agents of the
union when the harassment occurred, as they spent most of their time on union
business and “...were perceived by both workers and management as
representing both the workers and the
Union...”.
[29]

Workplace example: Contract workers

It is becoming more common for people with different employers to be
located in the same workplace. The person responsible for the workplace is not
always the employer of the people working in it. In these situations, it is
important for workplace participants to be clear about their responsibility for
sexual harassment
.

A woman is recruited by an employment agency to carry out a short-term
project with a media company. She alleges that she is sexually harassed by a
male co-worker on her project team. He argues in response that the woman is
lying and that she in fact sexually harassed him.

If the woman’s complaint is substantiated, the man will be liable for
the sexual harassment because it is unlawful for an employee to sexually harass
another workplace participant carrying out duties in the same workplace, even if
she is the employee of the employment agency and not the media company.

The media company, as the man’s employer, will be vicariously liable
for his sexual harassment, unless it took all reasonable steps to prevent the
harassment.

If the man’s complaint is substantiated, the woman will be liable for
sexual harassment, because it is also unlawful for a contract worker to sexually
harass another workplace participant carrying out duties in the same
workplace.

It is likely that the employment agency, not the media company, will be
vicariously liable for the woman’s sexual harassment, unless it took all
reasonable steps to prevent it, because the agency is the woman’s
employer.

See also Elliott v Nanda & the Commonwealth (2001) 111 FCR 240

5.5 How can employers
reduce or discharge vicarious liability?

The vicarious liability provisions in the Sex Discrimination Act also provide
employers with a defence. Vicarious liability can be reduced or avoided
altogether if the employer can show that they took ‘all reasonable
steps’ to prevent the sexual harassment or discrimination. This means that
employers are required to take active steps to minimise the risk of unlawful
behaviour occurring in the workplace. The next section discusses how employers
can prevent being held vicariously liable for acts of sexual harassment.


References

[26] Elliott v Nanda
& the Commonwealth
(2001) 111 FCR 240 at 259 [163] (Moore J).
[27] See Appendix
A.
[28] Human Rights and Equal
Opportunity Commission A Bad Business: Review of sexual harassment in
employment complaints 2002
(2003) p
31.
[29] Horne v Press Clough
Joint Venture
(1994) EOC 92-591 at
77,177.