Accountant ordered to pay $476,000 in damages for sexual harassment – a timely reminder for Christmas functions!

Ewin v Vergara (No 3) [2013] FCA 1311

The Federal Court recently ordered a contractor accountant to pay $476,000 in damages for sexual harassment. The contractor was employed by Robert Walters Pty Ltd and placed at Living & Leisure Australia Ltd (LLA) to assist with accountancy duties.

Whilst at LLA it was alleged that the contractor engaged in multiple instances of sexual harassment towards an employee of LLA, including inappropriate gestures, language and physical contact. It was also alleged that the contractor forced the LLA employee to engage in sexual acts following an LLA work function.

The employee subsequently resigned from her position with LLA and commenced proceedings against LLA, Robert Walters Pty Ltd and the contractor. The proceedings against the contractor were brought under the Sex Discrimination Act 1984 (SDA).

In defending the proceedings, the contractor argued that as a contractor, he was not subject to the SDA and that the corridors and areas adjacent to a place of work such as elevator spaces (where some of the conduct occurred) do not constitute part of the workplace. The court, however, disagreed and stated that the SDA was designed to protect workplace participants regardless of their employment type. The court also rejected the contractor’s argument that the conduct did not occur at a workplace, saying the intent of the legislation would be undermined substantially if associated common areas were construed as falling beyond the intended geographical scope of the SDA.

Lessons for employers

Employers who engage contractors have a duty of care to ensure, so far as is reasonably practical, that the contractor’s conduct does not adversely affect the safety of its employees (or other workers). Employers must be aware that a ‘workplace’ extends to areas associated with the workplace such as elevator wells, corridors and entrances.

Conduct outside of working hours, for example during or after work functions, can also expose an employer to liability for the conduct of its contractors and employees.

Care should be taken by employers to develop preventative measures such as creating, implementing and enforcing a sexual harassment and bullying policy and a complaint handling system. Contracted workers should also be included in this process.

Cooper Grace Ward Lawyers can assist your business develop and implement strategies to aid in the prevention or reduction of risks associated with these issues and all other employment matters. For more information, please contact a member of our team.