Sexual Harassment (A Code in Practice) - Liability

Sexual Harassment
(A Code in Practice)

3. Liability

3.1 General principles

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; or
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 facts of a case, agents in the area of employment
could include:

volunteer workers;
holders of unpaid honorary positions;
members of the board of directors;
contractors and consultants; and
business partners.

Depending on the particular facts of a case, agents of
a union can include shop stewards and workplace delegates.

3.2 Explanatory notes

3.2.1 Personal liability

Any individual will 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 HREOC or a State or Territory
anti-discrimination agency, or through legal proceedings before the Federal
Court of Australia or Federal Magistrates Court.

3.2.2 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.

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
knowingly contributed to the sexual harassment in order to be liable as
an accessory.

[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 that
sexual harassment was occurring, or were aware 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.

3.2.3 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 HREOC; or
attended a conciliation conference or appeared as a witness.

Examples of victimisation may include:

an employee being moved to a less responsible position while her complaint is being considered;
a staff member being ostracised by other employees because of providing information to HREOC about inappropriate material being circulated in the workplace; or
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
a being involved in a sexual harassment complaint, they can make a complaint
of victimisation to HREOC, 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.

3.2.4 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 the course of work. 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. 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.²⁸

In practice, in most sexual harassment complaints conciliated through
HREOC or cases determined by courts, compensation is paid by the employer,
rather than the alleged harasser.²⁹ 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 "agents". An agent is a person authorised to act on behalf of another (referred to as the "principal"). If the agent is acting in accordance with the express, implied or ostensible authority conferred on them, the principal is bound by their actions and can be held vicariously liable for their wrongs. Volunteer workers, board directors, consultants or contractors, including recruitment agents, are likely to be considered agents of an employer.

In Horne v Press Clough Joint Venture (see case example at 1.2.4)
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..."³⁰

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 a contract worker cannot 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
and case study at 3.2.2.

3.2.5 Reducing or discharging 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. Chapter 4 discusses
how employers can prevent being held vicariously liable for acts of sexual
harassment.

Footnotes

26. Elliott
v Nanda & the Commonwealth (2001) 111 FCR 240 at 259 [163] (Moore
J).
27. See Appendix A.
28. See below at Chapter 4.
29. Human Rights and Equal Opportunity
Commission A Bad Business: Review of sexual harassment in employment
complaints 2002 HREOC 2003, p 31.
30. Horne v Press Clough Joint Venture (1994) EOC 92-591 at 77,177.

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Last updated:
24 March 2004.