An employer can avoid being in breach of Australian federal anti-discrimination law if it takes "all reasonable steps" to prevent the discrimination or harassment of its employees. A recent decision of the Federal Court provides guidance about what "reasonable steps" are.
It is widely understood that "reasonable steps" include training employees about expected behaviour and taking effective action to address problem behaviour. However, the content of policies should also emphasise the "lively and real interest that an employer will have in scrupulous adherence to its warnings". In this case, the failure to emphasise that interest meant Oracle was responsible for the unlawful conduct of an employee.
What to include in discrimination and harassment
Whilst it has long been the case that employers need to implement policies on acceptable workplace behaviour to effectively defend claims of discrimination and harassment, the recent Federal Court decision of Richardson v Oracle Corporation Australia Pty Limited  FCA 102 (Oracle) has addressed the content that should be included in these policies.
In Oracle, the Federal Court was required to determine whether Oracle, a global software company, was vicariously liable for the sexual harassment of a female employee, Ms Richardson, by one of its sales representatives.
Oracle argued that it had taken all reasonable steps to prevent the sexual harassment of Ms Richardson as it had a policy prohibiting harassment that was given to all new employees, it required all employees to undergo online sexual harassment training every two years, and it had effective investigative policies in place.
While the Court agreed that Oracle had taken some steps to prevent sexual harassment in its workplace, it was not satisfied that Oracle had taken all reasonable steps.
The evidence was that the policies were part of a package that applied to Oracle employees worldwide, and which adhered to common "global standards".
However, the Court found they were inadequate because Oracle did not say that sexual harassment was unlawful or made any reference of the prohibition of sexual harassment in Australia by the Sex Discrimination Act 1984 (Cth). The Court also found that Oracle's policies ought to have included a statement that Oracle could be held vicariously liable for the sexual harassment of its employees. In this way, the policies would have highlighted to employees that Oracle had a "lively and real interest" in adhering to them.
Ultimately therefore the Court held that Oracle was vicariously liable for the sexual harassment and ordered it to pay $18,000 in compensation to Ms Richardson. The decision was fiercely litigated and it is reported the costs in bringing and defending the proceedings significantly outweighed the compensation amount. Subsequently, Ms Richardson has lodged an appeal against the decision on the basis that the damages awarded by the Court were inadequate.
Method of communication and enforcement
Although polices are essential, polices alone are not enough to avoid liability. Employers need to ensure that policies are communicated to employees, and enforced.
In Oracle, the Court effectively accepted that face-to-face sexual harassment training is not always essential. The employer's training was provided through an online question and answer format. The Court found the relevant employees were well-educated, professional, "mature adults with serious responsibilities" and capable of taking that method of training seriously.
Further, by showing the perpetrator suffered serious consequences for his behaviour, Oracle was able to show its policy was effective.
However, the relevant defence is to take "all reasonable steps", and Oracle fell down because of its standardised policy.
Lessons for employers
The Oracle decision reaffirms the value to employers of having well-drafted and comprehensive discrimination and harassment policies. In light of this decision employers should review their policies to ensure they explain:
- the conduct (i.e. bullying, harassment, discrimination);
- that employees must not engage in that conduct;
- why it is unacceptable, including that it is against the law (and include a specific reference to the relevant law);
- the interest to the employer in enforcing the policies, including that the employer may be vicariously liable for an employee's conduct;
- the potential consequences of a breach of the policy; and
- the method by which an employee can make a complaint in relation to a breach of the policy.
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