Sexual Harassment (A Code in Practice)

Sexual Harassment
(A Code in Practice)

3. Liability

3.1 General principles

Personal liability

Persons or organisations covered by the sexual harassment provisions of the Sex Discrimination Act are personally liable for:

their own acts of sexual harassment;
any act of victimisation; or
causing, instructing, inducing, aiding or permitting sexual harassment (this is called "accessory liability").

Vicarious liability

The Sex Discrimination Act states that an employer or principal, including a union, is liable for acts of sexual harassment committed by employees or agents in connection with their duties unless "all reasonable steps" were taken by the employer or principal to prevent sexual harassment occurring. This is called "vicarious liability".
Reasonable steps must be active, preventative measures.
The obligation to prove that all reasonable steps were taken rests with the employer or principal.
Lack of awareness that the harassment was occurring is not in itself a defence for employers or principals.
Even when an employer or principal is found to be vicariously liable for sexual harassment committed by individual employees or agents the individual remains personally liable for their acts.
However, in practice, employers who are vicariously liable for sexual harassment are generally more likely to end up paying compensation to a complainant, because of their greater capacity to pay than the individual harasser.

Agents

Depending on the particular facts of a case, agents in the area of employment could include:

volunteer workers;
holders of unpaid honorary positions;
members of the board of directors;
contractors and consultants; and
business partners.

Depending on the particular facts of a case, agents of a union can include shop stewards and workplace delegates.

3.2 Explanatory notes

3.2.1 Personal liability

Any individual will be personally liable for their own unlawful acts under the Sex Discrimination Act, and in particular for acts of sexual harassment and victimisation. In these circumstances, the individual can be held responsible for their behaviour through an internal complaint process, by being the subject of a complaint to HREOC or a State or Territory anti-discrimination agency, or through legal proceedings before the Federal Court of Australia or Federal Magistrates Court.

3.2.2 Accessory liability

Individuals and employers can also be held liable under Section 105 of the Sex Discrimination Act if they "caused, instructed, induced, aided or permitted" an individual to commit an unlawful act. For example, a manager who is aware that an employee is being sexually harassed and does nothing about it may be held liable as an accessory to the harassment. There is no defence available for this type of liability.

Section 105 differs from the vicarious liability provisions discussed below in several ways. Unlike vicarious liability, an organisation can be an accessory to sexual harassment even if there is no legal relationship between the organisation and the harasser such as that of employer/employee. However in contrast to vicarious liability, an organisation must have knowingly contributed to the sexual harassment in order to be liable as an accessory.

[A] person can, for the purposes of s105, permit another person to do an act which is unlawful, such as discriminate against a woman on the grounds of her sex, if, before the unlawful act occurs, the permitter knowingly places the victim of the unlawful conduct in a situation where there is a real, and something more than a remote, possibility that the unlawful conduct will occur. ²⁶

In effect, a person will be an accessory to harassment if they were aware that sexual harassment was occurring, or were aware that there was a real possibility of it occurring, did nothing to address it and thereby allowed the harassment to take place.

Case example: Employment agency's accessory liability

An employment agency referred a young woman to employment at a doctor's office, despite previous complaints of sexual harassment against the doctor from earlier clients of the agency. The young woman was then sexually harassed by the doctor.

The Federal Court of Australia found that the agency had permitted the sexual harassment to take place. Justice Moore found that the caseworker who referred Ms Elliot to the doctor's employment did not have to actually know of the past complaints of sexual harassment, as the collective knowledge of the agency officers was sufficient. Justice Moore went on to explain what actions could have been taken.

There is no reason apparent to me why an employment agency, to whom several complaints had been made about sexual harassment ...by one of the employers it serviced ..., could not either terminate the service or inform the employer that the agency would tell, as a condition of maintaining the service, potential employees that complaints had been made and the nature of the complaints or at least require the employer to put in place measures at the workplace to stop or at least influence the potentially unlawful conduct.

This case it is particularly important for employment agencies, as they can be found liable for sexual harassment that takes place in workplaces not under their control, if they are aware that there is a real risk of sexual harassment occurring and they take no steps to reduce that risk. However, any private sector business may be liable as an accessory to sexual harassment if it permits the harassment to occur.

Elliott v Nanda & the Commonwealth (2001) 111 FCR 240.

3.2.3 Victimisation

Section 94 of the Sex Discrimination Act prohibits the victimisation of anyone connected with a complaint. Victimisation means subjecting a person to some detriment if he or she has:

lodged, or is considering lodging a complaint under the Sex Discrimination Act;
provided information or documents to HREOC; or
attended a conciliation conference or appeared as a witness.

Examples of victimisation may include:

an employee being moved to a less responsible position while her complaint is being considered;
a staff member being ostracised by other employees because of providing information to HREOC about inappropriate material being circulated in the workplace; or
an employee being denied the opportunity of a promotion after unsuccessfully lodging a sexual harassment complaint against several of her supervisors.

If a person is subjected to some detriment because of a being involved in a sexual harassment complaint, they can make a complaint of victimisation to HREOC, using the usual complaints procedures.²⁷ In some cases, such as physical molestation or assault, victimisation may also be a criminal matter and the victim can report the behaviour to police.

3.2.4 Vicarious liability

It is a general legal principle that an individual is personally liable for his or her own unlawful acts. However, in the area of employment (including discrimination and harassment) employers can also be held liable for wrongs committed by their employees in the course of work. This is referred to as the principle of vicarious liability.

Section 106 of the Sex Discrimination Act makes employers vicariously liable for the unlawful conduct of their employees. This means that if an employee sexually harasses a co-worker, client, customer or other protected person the employer can be held legally responsible and may be liable for damages unless they took all reasonable steps to prevent the harassment occurring.²⁸

In practice, in most sexual harassment complaints conciliated through HREOC or cases determined by courts, compensation is paid by the employer, rather than the alleged harasser.²⁹ Although the individual harasser will still be liable for their behaviour, and can be ordered by a court to pay compensation, employers are more likely than individuals to have the means to pay compensation.

Section 106 also makes a person vicariously liable for the unlawful conduct of "agents". An agent is a person authorised to act on behalf of another (referred to as the "principal"). If the agent is acting in accordance with the express, implied or ostensible authority conferred on them, the principal is bound by their actions and can be held vicariously liable for their wrongs. Volunteer workers, board directors, consultants or contractors, including recruitment agents, are likely to be considered agents of an employer.

In Horne v Press Clough Joint Venture (see case example at 1.2.4) the WA Equal Opportunity Tribunal found that the union played a role in allowing the sexual harassment of the complainants to continue by failing to support their efforts to have the pornography removed. The union was held liable for the role played by the union shop stewards, even though they were not union employees. It was found that the shop stewards were acting as agents of the union when the harassment occurred, as they spent most of their time on union business and " ...were perceived by both workers and management as representing both the workers and the Union..."³⁰

Workplace example: Contract workers

It is becoming more common for people with different employers to be located in the same workplace. The person responsible for the workplace is not always the employer of the people working in it. In these situations, it is important for workplace participants to be clear about their responsibility for sexual harassment.

A woman is recruited by an employment agency to carry out a short-term project with a media company. She alleges that she is sexually harassed by a male co-worker on her project team. He argues in response that the woman is lying and that she in fact sexually harassed him.

If the woman's complaint is substantiated, the man will be liable for the sexual harassment because it is unlawful for an employee to sexually harass another workplace participant carrying out duties in the same workplace, even if she is the employee of the employment agency and not the media company.

The media company, as the man's employer, will be vicariously liable for his sexual harassment, unless it took all reasonable steps to prevent the harassment.

If the man's complaint is substantiated, the woman will be liable for sexual harassment, because a contract worker cannot sexually harass another workplace participant carrying out duties in the same workplace.

It is likely that the employment agency, not the media company, will be vicariously liable for the woman's sexual harassment, unless it took all reasonable steps to prevent it, because the agency is the woman's employer.

See also Elliott v Nanda & the Commonwealth (2001) 111 FCR 240
and case study at 3.2.2.

3.2.5 Reducing or discharging vicarious liability

The vicarious liability provisions in the Sex Discrimination Act also provide employers with a defence. Vicarious liability can be reduced or avoided altogether if the employer can show that they took "all reasonable steps" to prevent the sexual harassment or discrimination. This means that employers are required to take active steps to minimise the risk of unlawful behaviour occurring in the workplace. Chapter 4 discusses how employers can prevent being held vicariously liable for acts of sexual harassment.

Footnotes

26. Elliott v Nanda & the Commonwealth (2001) 111 FCR 240 at 259 [163] (Moore J).
27. See Appendix A.
28. See below at Chapter 4.
29. Human Rights and Equal Opportunity Commission A Bad Business: Review of sexual harassment in employment complaints 2002 HREOC 2003, p 31.
30. Horne v Press Clough Joint Venture (1994) EOC 92-591 at 77,177.