Recent sexual harassment decisions and their implications for employers

Content warning: this article contains descriptions of sexual harassment and sexual assault

In a recent case that illustrates the significant consequences for employers and employees alike that arise where an employer fails to take reasonable precautions to prevent sexual harassment in the workplace, the Victorian Civil and Administrative Tribunal (VCAT) has ordered an employer to pay $150,000 to an employee that experienced sexual harassment in the workplace. In a second recent judgment, the Fair Work Commission (FWC) upheld an employer’s decision to dismiss an employee following an investigation that substantiated allegations of sexual harassment. In this article, we explore what these two recent decisions mean for employers.

VCAT finds employer vicariously liable to the tune of $150,000 for failing to take reasonable precautions to prevent workplace sexual harassment

In Oliver v Bassari (Human Rights) [2022] VCAT 329 (28 March 2022) an employee of a beauty therapy company, Heibech Pty Ltd (trading as “Man Oh Man”), was subjected to sexual harassment and was sexually assaulted by her colleague, Frederico Catalfamo. The sexual harassment took place over the course of the eleven months that the employee, Oliver, worked for the employer, and entailed sexual and suggestive questions and comments as well as unwanted touching. The sexual harassment ultimately culminated in Catalfamo sexually assaulting Oliver whilst she was having her hair washed. Oliver was subsequently diagnosed with PTSD and anxiety and experienced a number of negative symptoms as a result of the harassment and assault.

The Tribunal found that the employer was vicariously liable for the sexual harassment as:

  • the employer’s response to the employee was “manifestly inadequate”, as the employer did not address the complaints with Catalfamo as they were made and did not investigate any of the allegations. No formal action was taken until five months after the final allegation was made (in relation to the sexual assault), when Catalfamo was given a written warning;
  • the only precautions the employer took to prevent sexual harassment in relation to Catafalmo before the First Complaint were to:
    • make a handbook, which contained an anti-discrimination and equal opportunity policy, which contained a section on sexual harassment, available electronically; and
    • to discuss the handbook “in a rudimentary manner in one staff meeting”;
  • there was no evidence that the employer ever implemented any educational programs on sexual harassment issues, monitored the workplace to ensure compliance with its sexual harassment policies or took appropriate steps to communicate its sexual harassment policies to all employees.

Oliver also argued that the sole director, shareholder and office manager of Man Oh Man, Youm Bassari, ‘assisted, authorised and/or encouraged’ the sexual harassment as Bassari did nothing to prevent the sexual harassment from occurring and continued to roster Oliver and Catafalmo to work together despite knowing of the sexual harassment. The Tribunal found that a person in authority (e.g. a manager) may authorise sexual harassment through mere inaction if:

  • the person in authority has observed the conduct and done nothing to prevent it from reoccurring; and
  • the perpetrator knows that their conduct has been observed by the person in authority.

However, in this case, VCAT found that Bassari’s inaction did not amount to assisting, authorising or encouraging the sexual harassment as Catafalmo did not know that Bassari was aware of the allegations as she never addressed them with him.

The Tribunal awarded general damages in the order of $150,000, noting that the affected employee was still suffering from the effects of the sexual harassment and assault four years after the incidents occurred.

Fair Work Commission upholds dismissal for sexual harassment

The case of Dunlop v BHP Billiton WAIO Pty Ltd t/a BHP [2022] FWC 790 (11 April 2022) concerned an employee, Dean Dunlop, who was suspended by his employer, BHP Billiton (BHP), immediately following two allegations of sexual harassment that were made against him by two contractors that worked for ESS Support Services, a contractor that provides services to BHP, including cleaning its mine sites. BHP subsequently terminated Dunlop’s employment three weeks later following an independent investigation in which the allegations of sexual harassment were substantiated. One contractor alleged that Dunlop had grabbed her in a “bear hug”, pinned her arms to her side and whispered a sexual comment in her ear. The other contractor alleged that, in a separate incident, Dunlop made a sexual comment to her, squeezed her breast and called her multiple times over the following days. The second contractor resigned from her employment with ESS and said that was because she felt too unsafe to return to work.

Dunlop argued sexual harassment did not occur and that the allegations were vague and malicious, and he was unfairly dismissed. The FWC heard evidence from the two complainants, an independent investigator, the complainants’ supervisor and Dunlop’s supervisor. The FWC found that all the evidence supported the allegations that sexual harassment did in fact occur. In considering the legislative requirements, the FWC found that Dunlop’s dismissal was not ‘harsh, unjust or unreasonable’ as sexual harassment is a valid reason for dismissal as it amounts to serious misconduct (following a recent change to the definition of serious misconduct in the Fair Work Act 2009 (Cth)) , Dunlop was informed of the allegation and was provided with an opportunity to respond but chose not to do so, and that the procedures followed by BHP in effecting the dismissal were appropriate.

What do these two cases mean for employers?

Both cases highlight the importance of having appropriate policies and procedures in place which clearly prohibit sexual harassment in the workplace and outline the procedure for managing complaints from employees. They also highlight the importance of making sure that employees are aware of the contents of these policies, taking proactive steps to monitor compliance with the policies, and that allegations are taken seriously and responded to in line with the procedures in place. The FWC found BHP had engaged in correct procedures for managing complaints and had followed their policies and protocols regarding an investigation, which resulted in a fair dismissal. On the other hand, VCAT found that Man Oh Man’s lack of action against allegations and poor policies and procedures resulted in them being vicariously liable for their employee’s conduct.

Both cases also highlight the importance of taking sexual harassment allegations seriously. As a result of Bassari and Man Oh Man’s inaction, VCAT found in favour of the affected employee and awarded her $150,000 in general damages. The Tribunal also confirmed that individuals in positions of authority (e.g. managers) may be held liable for assisting, authorising or encouraging sexual harassment through mere inaction. This is an important lesson for employers who fail to prevent and respond to sexual harassment in the workplace as more cases are going before the court and more employers are being held vicariously liable for the conduct of their employees.

Key takeaways

There are a number of things employers can do to ensure they are protected from unfair dismissal and vicarious liability claims:

  • ensure appropriate policies and procedures are in place to deal with complaints and allegations of sexual harassment and sexual harm;
  • ensure employees are aware of and have read anti-discrimination and equal opportunity policies, as well as your organisation’s code of conduct;
  • provide training to employees on appropriate workplace conduct;
  • take all allegations seriously and investigate allegations and complaints where appropriate;
  • keep proper recordings of allegations and investigations, and
  • follow correct procedures and steps to manage allegations and disputes.

How Moores can help

Moores works with organisations and employers to prevent sexual harassment and discrimination in the workplace and supports employers and organisations to respond appropriately and efficiently to complaints and allegations of sexual harassment and discrimination that are made.

Moores’ Workplace Relations & Child Safety teams can provide a range of comprehensive and specialist support and services to employers and organisations and provide support and advice in relation to disputes, investigations, the implementation of policies and procedures and training in relation to sexual harassment and discrimination.

Contact us

Please contact us for more detailed and tailored help.

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