The recent publicity arising from the David Jones case has
catapulted the issue of workplace sexual harassment back into the
public consciousness and has highlighted the need for employers to
ensure that their staff and management comply with
anti-discrimination legislation at all times. The David Jones case
is receiving public attention partly due to the reputation of the
employer and its former CEO, but also because of the creative and
expansive claim for compensation brought by the applicant. However,
whilst the amount claimed in the David Jones case has left the
Australian legal profession and large employers holding their
collective breaths (whilst raising eyebrows about the quantum of
the claim), the 2009 award of $466,000 made by the Federal Court in
the case of Poniatowska v Hickenbotham currently holds the
honour for the largest payment of compensation for sexual
discrimination upheld by an Australian court.
Ms Poniatowska commenced her claim after her employment was
terminated for allegedly poor performance, and after she had made a
number of complaints alleging sexual harassment against several
staff members. The claim was brought in the Federal Court pursuant
to the Sex Discrimination Act 1984 (SDA) and what is now the
Australian Human Rights Commission Act 1986 (AHRCA) after the
Commission's compulsory conciliation process proved
unsuccessful. Section 46PO of the AHRCA provides that compensation
for unlawful discrimination may be awarded by the Court after
having regard to all relevant matters including the nature and
extent of discrimination, damage flowing from any breach of
contract, past and future economic loss, damage to the person, and
past and future medical expenses. The compensation awarded to Ms
Poniatowska (and upheld on appeal) was assessed by reference to
these matters, and included the significant amounts of $340,000
(plus interest) for lost earnings and $90,000 for pain and
suffering. The employer's application seeking leave to appeal
the Poniatowska decision in the High Court is currently underway.
If the High Court upholds the decision and award made to Ms
Poniatowska, the award will establish a new and permanent benchmark
for compensation in sexual discrimination claims.
In contrast to Poniatowska, the David Jones case is far more
broadly pleaded. In the latter case, the applicant's claim does
not expressly rely on the SDA (although it is understood that the
applicant is awaiting conciliation by the Commission of her SDA
claim, and such a claim shall likely be added to her Federal Court
proceedings if the conciliation process is unsuccessful). Instead
the claim filed against David Jones pleads misleading and deceptive
conduct, breaches of express and implied terms of the employment
contract, breach of the employer's duty of care, and trespass
to the person. In essence, the applicant contends that she had been
deceived into entering into an employment relationship upon false
contractual representations (both express and implied) that she
would be provided with a safe working environment.
Both the Poniatowska and David Jones cases involve allegations
of sexual harassment by senior employees, as well as allegations
that the relevant employers fostered a workplace culture where
sexual harassment and discrimination were not subject to reprimand
and otherwise failed to maintain and adhere to policies in relation
to anti-discrimination laws. However, the breadth of the claims in
the David Jones case - in which the applicant seeks relief pursuant
to trade practices provisions, tort and contract - highlights the
real possibility that an employer responding to a sexual harassment
claim may face liability beyond that prescribed by the SDA.
Employers should no longer assume that liability for compensation
in sexual harassment cases will be limited to the historically
modest payouts awarded in purely discrimination-based claims. With
a potentially permanent increase in the high-water mark of
compensation awarded for unlawful discrimination and harassment, as
well as the expansion of the causes of actions likely to be pursued
in the face of such conduct, the financial implications for
employers are serious. It is essential that employers are vigilant
in ensuring that their management and employees comply with all
relevant anti-discrimination legislation, that management fosters a
culture of zero-tolerance of unlawful conduct, and that employers
maintain, and require adherence to, well documented policies and
procedures in relation to harassment and discrimination.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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