November 2005 page 47
Human rights: Where does the workplace end? – Vicarious liability for sexual harassment
By CHRISTINE FOUGERE
Christine Fougere is a Senior Lawyer at the Human Rights and Equal Opportunity Commission.
THE RECENT DECISION OF THE full court of the Federal Court in South Pacific Resort Hotels v Trainor [2005] FCAFC 130 (South Pacific) provides guidance on the extent to which an employer may be found to be vicariously liable for acts of sexual harassment by one employee against another in a location away from the actual workplace. In this case, the acts complained of occurred when both employees were off duty, but when both were living in accommodation provided by the employer. One of the issues considered by the court was whether there was a sufficient connection between the acts of the harassor and his employment in order to make the employer liable for his actions.
Section 106 of the SDA
Section 28B of the Sex Discrimination Act 1984 (Cth) (SDA) makes sexual harassment in employment unlawful, including sexual harassment of one employee by a fellow employee (s.28B(2)). Section 106 of the SDA makes employers vicariously liable for the actions of their employees in certain circumstances.1 Under s.106(1), employers are liable for the unlawful actions of an employee carried out “in connection with the employment of the employee”. An employer can avoid liability under s.106(1) if it is able to establish, pursuant to s.106(2) of the SDA, that it had taken “all reasonable steps to prevent the employee ... from doing acts of the kind referred to”.2
South Pacific case
The South Pacific case resulted from an appeal against a decision of a federal magistrate3 in which it was found that Ms Trainor had been sexually harassed on two occasions by an employee of the appellant, Mr Anderson, and that the appellant was vicariously liable under s.106 of the SDA.4
Two acts of sexual harassment were found to have occurred, each of them at night and each in Ms Trainor’s room in staff accommodation provided by the appellant as part of its hotel complex on Norfolk Island. The first incident occurred one morning at 3:00 a.m. when Ms Trainor was asleep in her room. Mr Anderson entered uninvited, woke her, began talking to her and remained until about 3:45 a.m. The second occasion occurred six days later when Ms Trainor found Mr Anderson lying, uninvited, on her bed. On both occasions the federal magistrate found that Mr Anderson had sexually harassed Ms Trainor in breach of s.28B(2) of the SDA.
In finding the requirements of s.106(1) were satisfied, the federal magistrate found that the degree of control exercised by the employer in relation to the staff accommodation and to staff behaviour on its property was a key part of the employment relationship, and placed particular emphasis on the fact that failure to comply with these requirements had led to the instant dismissal of Mr Anderson.5
Appeal
On appeal, the appellant argued that other than the fact that the respondent and Mr Anderson were fellow employees, there was no evidence that it was by reason of their employment that they came into contact and that the only connection was that the incident occurred on the appellant’s land in a building in which some, but not all, staff resided. In addition, the acts of harassment occurred while both were off duty and while they were not performing any function related to their employment.
The appellant also challenged the emphasis placed by the federal magistrate on the appellant’s control over its staff quarters, arguing that control did not determine whether particular conduct had been “in connection with” employment and that, instead, the focus should have been upon the act in question to determine whether there was sufficient connection with employment.
Full court decision
The full court dismissed these arguments and upheld the decision of the federal magistrate.6 It held that there was a sufficient connection between the acts of Mr Anderson and his employment on the basis that the acts of sexual harassment took place in accommodation occupied (albeit in separate rooms) by both employees because of, and for the purposes of, their common employment, and that it could not be said that the common employment was unrelated or merely incidental to the sexual harassment of one by the other.7
The connection between the employment and the acts in question was even closer because a prohibition on staff having visitors in the staff accommodation meant that, in the absence of any special arrangements by the employer, only staff were permitted there. It was therefore only by virtue of being staff that Mr Anderson and Ms Trainor were in the premises where the acts of sexual harassment occurred.8
In a separate judgment, Kiefel J referred to extrinsic materials and international jurisprudence to make some general observations about the application of s.106 of the SDA. Her Honour agreed with the majority view that a wide operation should be given to s.106(1) and the words “in connection with the employment of an employee”,9 and warned against arguments that seek to import the doctrine of vicarious liability in tort into the SDA.10
The question that arises in tort is whether the employee was acting in the course of their employment when they committed the tort, and it “requires a much stronger connection than an Act such as the SDA would require”.11 In her Honour’s view, the broad operation of s.106(1) of the SDA means that employers “must be vigilant of the possibility of such practices in the workplace”.12
Endnotes
1. Section 106 also applies to relationships of principals and agents.
2. Considerations under s.106(2) were not in issue before the full court as the appellant did not seek to maintain the position that it had taken all reasonable steps to prevent its employee from doing the acts of the kind complained of: South Pacific Resort Hotels Pty Ltd v Trainor [2005] FCAFC 130, [5]. Other cases in which s.106(2) is considered are discussed in Federal Discrimination Law 2005 at http://www.humanrights.gov.au/legal/fed_discrimination_law_05/index.html
3. Trainor v South Pacific Resort Hotels Pty Ltd [2004] FMCA 374.
4. The appellant also challenged on appeal the federal magistrate’s findings that the provisions of the SDA applied in the circumstances of this case to conduct on Norfolk Island, and the award of damages. The full court dismissed all of the appeal grounds but for reasons of space, only the appeal ground relating to the issue of vicarious liability is discussed in this article.
5. Ibid [68].
6. Their Honours Black CJ and Tamberlin J in a joint judgement, Kiefel J agreeing in a separate judgement.
7. South Pacific Resort Hotels Pty Ltd v Trainor [2005] FCAFC 130, [39].
8. Ibid [40].
9. Ibid [41-42] (Black CJ and Tamberlin J), [64] (Kiefel J).
10. Ibid [65].
11. Ibid [65].
12. Ibid [70].
