Big increase in damages for sexual harassment23 October 2014 Topics: Workplace relations and safety
The Full Federal Court in the recent decision of Richardson v Oracle Corporation Australia Pty Ltd  FCAFC 82 ordered that an employee’s award of damages for unlawful sexual harassment be increased from $18,000 to $130,000, stating that community standards required higher compensation.
In the initial decision, the employee was awarded $18,000 for pain and suffering and loss of enjoyment of life after the trial judge found the employer vicariously liable for its sales representative’s sexual harassment of the employee. The unlawful sexual harassment, which occurred over several months, involved the sales representative making sexual comments and innuendo to the employee both privately and in front of colleagues.
The employee appealed the trial judge’s order on a number of grounds and was successful, resulting in her general damages being increased to $100,000 as well as receiving a separate award of $30,000 for economic loss.
Effect on the employee’s sexual relationship
The Full Court found that the trial judge had failed to properly take into account the effect that the unlawful sexual harassment had on the employee’s sexual relationship with her partner.
Damages were manifestly inadequate
The Full Court accepted that the award of $18,000 for general damages was within the previously accepted range of damages awarded in sexual harassment cases. However, the Full Court, in referring to other personal injury cases, observed that ‘community standards now accord a higher value to compensation for pain and suffering and loss of enjoyment of life than before’. The Full
Court went on to say that previous sexual harassment compensation awards were out of step with the general standards prevailing in the community regarding the monetary value of damages for loss of enjoyment of life and pain and suffering.
The Full Court found that an award of $18,000 was manifestly inadequate and awarded the employee $100,000 for general damages which included compensation for the injury to the employee’s sexual relationship with her partner.
The Full Court also found that there was a sufficient connection between the unlawful conduct and the employee’s decision to leave her employment. The employee was awarded a further $30,000 as compensation for her loss of income.
Employer’s investigation did not cause loss
Finally, the Full Court rejected the employee’s claim that the employer’s investigation process caused her further loss and damage stating that damages are only available to compensate an employee for the loss they sustain because of unlawful sexual harassment. The Full Court stated that the unlawful conduct of the sales representative provided the setting for what followed but was not a cause of the way in which the employer conducted its investigation.
This is a timely reminder for employers to ensure they implement and maintain strategies to prevent workplace discrimination, harassment and bullying.
This article originally appeared in Cooper Grace Ward’s Workplace Relations & Safety Risk Management Adviser – October 2014. Click here to download the full newsletter
Article written by Tobey Knight, Associate