HR&IR Update | Employer avoids liability for sexual harassment

March 2012

What happened?

Ms Cooper worked for the local area health service. She was given a document by a male colleague (a friend) containing sexually explicit text (no photographs). He later argued the document was written by someone else and that he had given it to Ms Cooper because of concerns about the writer - not with the intention of sexually harassing her.

Ms Cooper read the document and was so upset she immediately reported the matter to police. She also reported it to her employer the following day.

The employer conducted an investigation and issued a first and final warning to the employee.

Subsequently, Ms Cooper lodged a sexual harassment complaint under the New South Wales Anti Discrimination Act 1977 (Act) against her colleague and her employer.

The Anti Discrimination Tribunal (ADT) found that the employee's conduct amounted to sexual harassment and ordered him to pay Ms Cooper damages of $10,000. In arriving at this figure, the ADT noted this was a one-off event, involved friendly co-workers and had not resulted in significant ongoing effects for Ms Cooper.

Importantly, though, the ADT decided that the employer was not vicariously liable for the employee's breach of the Act because it had taken all reasonable steps to prevent the breach – including by providing training and making the employee aware of his obligations under its Code of Conduct (which prohibited discrimination and sexual harassment).

What does it mean?

Although each case will turn on its facts, the employer avoided liability for the employee's conduct in this case because:

the employee was given the Code of Conduct when he started work — and on four subsequent occasions (including on promotions) — and he had also signed up to the Code of Conduct
the employee had been warned of the penalties for breaching the Code of Conduct
the employee had attended relevant training on four occasions in the two years prior to the incident
this was a one-off incident — the outcome could have been different if there was a history of inappropriate conduct, particularly if the employer had not addressed it
the employer conducted a timely investigation and issued a disciplinary warning

Why is it important?

It can be very difficult for an employer to avoid liability for an employee's breach of anti-discrimination legislation. But this case shows that proactive employers can effectively manage the risks – and is a timely reminder of the importance of regular and appropriate education and training. Without it, an employer will find it difficult to avoid liability for their employees' unlawful conduct. On a practical level, if the training is effective, it may also prevent unlawful conduct in the first place.

What should I do?

The decision illustrates the necessity of being proactive in preventing discrimination, harassment and bullying. You should:

make employees aware of your discrimination, harassment and bullying policies and their responsibilities under them — ideally, you would also record their agreement to comply (in writing or by email)
provide suitable training on induction and at regular intervals thereafter (at least annually)
educate employees about how to raise grievances
promote a positive workplace culture and address inappropriate conduct even if no formal complaints are made
investigate complaints promptly and take appropriate disciplinary action