Record payout for sexual harassment and sex discrimination case

27 July 2009 Topics: Workplace relations and safety

A former female building consultant employed by a well-known South Australian housing company has been awarded $466,000, plus costs, for being sexually harassed by two male employees and having her employment subsequently terminated.

The award of damages, which is reputed to be one of the highest payouts ordered for a case of its type, followed a 16 day trial in the Federal Court. The damages included $200,000 for past loss of earning capacity, $140,000 for future loss, $90,000 for past and future pain and suffering, and sums for medical costs and interest.

The Court found that the female employee suffered from an adjustment disorder with mixed anxiety and severe depression.

The conduct complained about included instances of sexual harassment by two male employees, including propositions for sex and sending pornographic SMS texts.

The Court found that the Company failed to properly address the sexual harassment and terminated the female employee’s employment when she complained about the sexual harassment.

The Court also held that rather than being treated as the victim of sexual harassment, the Company treated the female employee as a problem to be dealt with. For example, after the female employee complained, the Company determined that she was a person who did not “fit” its work environment because she was a female who did not tolerate sexual harassment and a robust work environment. The Company then instituted disciplinary measures, including giving the female employee three warning letters and a suspension letter as a means of setting the scene for the termination of her employment. In the process, the Court held that the female employee was treated differently to the way the Company would have treated a male employee, representing sex discrimination.

Damages

In awarding damages, the Court found that the actions of the Company and its employees led to significant pain and suffering, hurt and humiliation to the female employee, including the onset of a significant mental illness. Reflecting the size of the judgment, the conduct also led to a significant decrease in earning capacity, with damages awarded “to allow for some years of quite considerable personal distress and unhappiness caused by her underlying psychiatric condition”; a condition which was brought on by the conduct of the Company and its employees.

The Company has appealed the decision to the Full Court (Federal Court).

Lessons for Employers

Make sure your employees have been properly inducted, trained and refreshed, regarding behaviours and conduct in the workplace, including discrimination and sexual harassment.

Always investigate any complaint of discrimination, sexual harassment or bullying.

Remember Employer’s can, and often are, held vicariously liable for the actions of their employees and agents.

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