Employer avoids liability for sexual harassment by employee

High profile cases involving companies such as David Jones and Airservices Australia have highlighted the real potential for an employer to be liable in the event of a sexual harassment incident in the workplace. Claims for compensation in excess of $1 million with associated adverse publicity are now not uncommon.

Despite the risk of large compensation payments, a recent case in the Queensland Civil and Administrative Tribunal (QCAT) provides a timely reminder that employers can avoid being held liable for the actions of their employees if they put into place effective policies and procedures to deal with sexual harassment.

The case of Menere v Poolrite Equipment Pty Ltd and Anor¹ demonstrates that if an employer takes proactive steps to develop an appropriate policy which is accessible and distributed in the workplace (and importantly ensures it operates effectively in the workplace) - it can escape liability for sexual harassment.

The facts

Mr Menere was an assembly line employee who made a complaint under the Anti-Discrimination Act (QLD) 1991 (ADA) of sexual harassment against both his employer and a former colleague.

Mr Menere alleged that his former colleague:

• engaged in numerous incidents of inappropriate sexually explicit behaviour against Mr Menere from the beginning of his employment in March 2008 until June 2008; and
• relevantly on 23 June 2008, "grabbed [Mr Menere] from behind and proceeded to thrust his pelvis and genitalia against [Mr Menere's] rear end..."

Some days after, Mr Menere approached his employer's health and safety officer who offered to take the matter further, but Mr Menere declined. However, the Production Manager heard of the incident in July 2008 and immediately:

• approached Mr Menere to confirm his version of events;
• afterwards, spoke with the alleged perpetrator and a number of witnesses;
• upon finding that the conduct had occurred, terminated the perpetrator's employment; and
• then advised Mr Menere of the outcome and apologised to him on behalf of the employer.

The outcome

QCAT found that the relevant conduct amounted to sexual harassment under section 119 of the ADA. However, in considering liability, QCAT found that the employer was not liable for the conduct of the employee because it had taken all reasonable steps to prevent the conduct occurring under section 133(2) of the ADA.

The former employee was ordered to pay Mr Menere $5,000 in damages and an additional $3,000 for future medical expenses.

Lessons for employers

The basic position at law is that an employer is liable for the wrongdoing of its employee if that wrongdoing occurred "in the course of" the employment of the employee.

The courts have interpreted "in the course of employment" quite broadly. It is a defence, however, if the employer has taken "all reasonable steps" to prevent the contravention.

Employers may avoid a finding of vicarious liability for sexual harassment of an employee if they can establish that they:

• have a robust sexual harassment policy;
• ensure the policy is distributed to and made accessible to all employees;
• caused their employees to undertake training in respect of sexual harassment and raised awareness levels;
• have acted promptly in conducting an investigation after becoming aware of a complaint; and
• have taken disciplinary/remedial action as is required and appropriate.

By doing so, the employer has done "more than merely have a policy in place". It has taken sufficient positive steps to ensure awareness about sexual harassment and how employees should manage a situation where they received unwanted attention.

The policy must be seen to be meaningful and important within the business. A pro-active approach to sexual harassment can mean escaping liability for the actions of an employee.

How we can help

HWL Ebsworth is well placed to provide an appropriately detailed and compliant sexual harassment policy for your business. HWL Ebsworth can also assist with implementation and training, and, where required, can provide guidance in conducting workplace investigations into complaints of sexual harassment.


¹[2012] QCAT 252

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