Who is liable?

When claims of sexual harassment are made by employees, it raises serious implications for the complainant's employer. Both the harasser and the employer (by way of vicarious liability) can be liable in sexual harassment claims.

What is vicarious liability?

Vicarious liability in general terms is the legal principle that renders employer's liable for the actions of their employees.

When does liability arise?

Employer's liability can arise when an employee commits an unlawful act of sexual harassment in connection with the employment. The phrase 'in connection with the employment' is being defined broadly by the courts. The effect of this is that employer's are being held liable for incidents occurring outside the four walls of the workplace and in the context of 'off-duty environments.'

For example:

In Leslie v Graham (2002) the Federal Court of Australia handed down a decision that rendered the employer liable for the acts of one of its employees who was taken to have sexually harassed a co-worker in an 'off- duty environment.' The conduct took place in an apartment shared between the harassing employee and the complainant employee whilst they attended a regional conference. The incident occurred after a social night out held as part of a conference when the harasser returned to the apartment drunk. Her Honour said that 'the harasser and complainant were in a continuing relationship as employees at the time of the incident'... there were sharing the apartment 'in the course of their common employment' (they were there because of a work-related conference) it could therefore 'not... be suggested that their common employment was unrelated or merely incidental, to the incident.'

In Lee v Smith (2007), the employer was found vicariously liable for the sexual harassment of one of its employee's in circumstances where:

  • The complainant was shown pornography in the workplace
  • The complainant was harassed during a training course by another employee (Mr Smith) who engaged in conduct which included note writing about having holes in his jeans which allowed him to touch his private area and through which he subsequently exposed himself
  • ping of the complainant by Mr Smith at a private residence after a social drinks gathering at a fellow employee's house.

The rape was held to be 'in connection with the employment' on the basis that the rape was as a result of the culmination of the earlier incidents of sexual harassment which took place directly in the workplace. Federal Magistrate Connolly said: '[the harassing conduct] was an extension or continuation of a pattern of behaviour that had started and continued to develop in the workplace [shared by the harasser and complainant]. The [connection] with the workplace was not broken.'

Are there any defences?

Under the Sex Discrimination Act, employer's are able to raise a defence so to avoid being caught by the law as 'vicariously liable'. This is known as the 'all reasonable steps defence.

The cases provide some guidance to employer's with respect to what steps should have been or need to be taken in order for an employer to demonstrate that it took all reasonable steps to prevent the (harassing) employee from doing or committing unlawful acts.

Employer's need to do something active to prevent the acts complained of including:

  • Providing new employees with a brief document pointing out the nature of sexual harassment, the sanctions that attach to it and the course to be followed by an employee who feels sexually harassed
  • Informing employees that disciplinary action will be taken against them if they engage in sexual harassment and advising new staff that it is a condition of their employment that they do not sexually harass a co-worker
  • The existence of an effective complaint handling process / procedure to deal with complaints of harassment
  • Having in place a clear sexual harassment policy available in writing which is communicated to all members of the workforce and continual education on sexual harassment.

The above points are a guide only – there is no exhaustive list of steps an employer could take to prevent being vicariously liable. Further, the courts in addition, also take into account factors such as the size of the organisation. Large corporations are expected to do more than small corporations to demonstrate they have acted reasonably.

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.