Substantial increases in damages in sexual harassment cases – a warning to employers

01 March 2016

The shift in the approach of Courts and Tribunals to the assessment of damages in sexual harassment cases has again been highlighted in the case of Collins v Smith (Human Rights) [2015] VCAT 1992 (23 December 2015).

In this important decision, Judge Jenkins of the Victorian Civil and Administrative Tribunal (VCAT) awarded the Applicant, Amanda Collins, over $330,000 in damages for breaches of the sexual harassment provisions contained in the Victorian Equal Opportunity Act 2010 (EO Act).

Judge Jenkins relied on the recent decision of the Federal Court of Australia (Federal Court) in Richardson v Oracle Corporation Australia Pty Ltd1 (Richardson) which in her view constituted “a significant milestone in the articulation of the proper approach to the assessment of damages in the context of sexual harassment cases”2.

In Richardson the Federal Court, on appeal, increased the damages awarded to the Applicant from $18,000 at first instance to $130,000 and noted that “prevailing community standards now place a higher value on compensation for pain and suffering and loss of enjoyment of life” in sexual harassment claims.

The Collins case

Ms Collins was employed by David Smith (Respondent) the owner/manager of a small licensed post office branch in Geelong West, Victoria (post office). Ms Collins commenced work in the post office on a full-time basis in May 2011.

Over a three month period commencing on 5 January 2013 the Respondent was found by Judge Jenkins to have sexually harassed Ms Collins. The Respondent’s conduct included:

  • Touching Ms Collins’ bottom and breasts;
  • Repeated attempts to inappropriately kiss and embrace Ms Collins;
  • Sexually propositioning Ms Collins on a repeated basis including by saying to her at various times that he wanted to have sex with her and asking her “what would you do if I just threw you on the floor?”;
  • Making sexual demands in return for allowing Ms Collins to earn overtime by working a Saturday shift;
  • Sending Ms Collins incessant and often sexually explicit text messages; and
  • Leaving sexually explicit phone messages on Ms Collins’ mobile phone.

Judge Jenkins found that Ms Collins had taken all reasonable steps available to her to make her position known and dissuade the Respondent from continuing to engage in the sexually harassing conduct.

The Respondent’s conduct had a substantial adverse impact on Ms Collins and she resigned from her employment.

Prior to the conduct of the Respondent, it was not in dispute that Ms Collins was happily married, was socially outgoing, was a competent and valued employee and enjoyed her job with the Respondent and wished it to continue.

Judge Jenkins found that Ms Collins had suffered severely as a direct result of the Respondent’s sexual harassment, having been diagnosed with a chronic post-traumatic stress disorder, a major depressive disorder and an anxiety disorder. All of these conditions required on-going medical and psychological treatment. In addition, Ms Collins’ personality profile had been significantly impacted to the extent that her social relationships were now inhibited and her marital relationship had come under great stress.

Assessment of Damages

Judge Jenkins awarded Ms Collins $332,000 in damages made up of:

  • $180,000 in general damages (being damages for hurt, humiliation and distress);
  • $20,000 in aggravated damages;
  • $120,000 for past and future loss of earnings; and
  • $12,200 for out of pocket expenses.

Judge Jenkins determined that while Richardson was decided under federal anti-discrimination legislation the same reasoning applies under the EO Act. Where evidence supports a causal connection between the harassing conduct and the damage suffered by an Applicant, VCAT only needs to be satisfied that the conduct is one of the reasons for any loss suffered by an Applicant rather than the sole or dominant reason.

Lessons for Employers

The Collins case illustrates the trend on the part of Courts and Tribunals to place increased emphasis on the effect of harassing conduct on the victims of such conduct and should serve as a warning to employers. As a result of these types of cases, we are increasingly seeing six and seven-figure claims for discrimination and sexual harassment by employees against employers. No doubt this is in part due to media attention given to a number of high profile claims in recent years. We are also seeing awards of damages in these cases (and in particular for general damages) increasing substantially.

Employers, therefore, need to take steps to minimise the risks for their business and should ensure that robust and compliant policies and training are in place and that all staff are fully aware of the required standards of behaviour in the workplace. This will assist employers in avoiding findings of vicarious liability where their employees are found by a Court or Tribunal to have engaged in sexual harassment.

Sexual harassment claims have the potential to cause major financial and reputational damage to employers and employers must be, therefore, pro active in taking steps to protect their business.

Written by Tony Lawrence, Partner, Melbourne.

1 Richardson v Oracle Corporation Australia Pty Ltd [2013] FCA 102
2 Collins at [133]

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