Most Read Contributor in Australia, September 2016
It is widely anticipated that sexual harassment claims against
employers will rise in the wake of a recent Federal Court decision.
In that case, the court ordered Oracle to pay a former employee
$100,000 in damages for injuries of the kind that have previously
attracted awards in the range of $12,000 to $20,000.
In Richardson v Oracle Corporation Australia Pty Ltd
 FCAFC 82, the Full Court of the Federal Court departed
significantly from the generally accepted range of damages for pain
and suffering arising from sexual harassment. It held that that
range had been fixed at a conservative level for too long, and that
the nature and extent of Ms Richardson's injuries and
prevailing community standards demanded the court take action.
Trial – general damages of $18,000
From the first time Ms Richardson and her colleague met in
person, she was subjected to a humiliating series of slurs, which
alternated with sexual advances and effectively developed into a
constant barrage of sexual harassment. The trial judge found that
the colleague's behaviour was cruel and calculated, but that he
may not have fully appreciated the effect it was having on Ms
As a result, Ms Richardson suffered a chronic adjustment
disorder with mixed features of anxiety and depression. The court
held that Oracle was vicariously liable for the injuries caused by
its employee to Ms Richardson where it had not taken all reasonable
steps to prevent his conduct. Critically, its anti-sexual
harassment policy failed to state that sexual harassment was
against the law.
The court was of the view that, in circumstances where Ms
Richardson's injuries did not involve features of aggravation
such as psychological trauma and resulting incapacity for work, her
case fell within the range of $12,000 to $20,000 for general
damages. She was awarded $18,000.
Appeal – general damages of $100,000
On appeal, the Full Court of the Federal Court held that the
damages awarded by the trial judge could not fairly be seen as
reasonable compensation for Ms Richardson's pain and
It noted that general standards prevailing in the community
meant that a higher value should be placed on the loss of enjoyment
of life and the compensation for pain and suffering than in the
past. Further, there was a significant disparity in damages for
sexual harassment with other areas of the law – such as
workplace bullying and harassment – that needed
The court determined that it could not continue to adhere to the
previously accepted range of damages for sexual harassment cases,
highlighting that an award of $18,000 was disproportionately low
having regard to the loss and damage Ms Richardson suffered. Her
general damages were subsequently increased to $100,000.
What does this mean for employers?
It has long been considered that the reason many people do not
formally pursue sexual harassment claims is because the cost and
heartache associated with the court process outweighs the
relatively insignificant damages that await a successful
However, as a result of this decision, it is likely that there
will now be more sexual harassment claims making their way to
court, as well as greater general damages for victims. This poses
obvious risks for businesses.
In order to avoid sexual harassment claims – and the
diversion of resources, negative publicity and bigger damages
awards that come with them – employers should be taking steps
to ensure that such unlawful behaviour does not occur in their
workplaces. This means:
Implementing a clear anti-sexual harassment policy which states
that sexual harassment is unlawful and identifies the source of the
relevant legal standard. The policy should also outline the
organisation's zero tolerance stance, as well as setting out
the rights and responsibilities of employees and the consequences
that may result from inappropriate behaviour.
Directing resources to training programs (including refresher
courses) so that employees are aware of the practical operation of
Providing employees with access to clear reporting
Investigating all claims of sexual harassment, regardless of
how trivial they may seem.
Taking appropriate and consistent disciplinary action if sexual
harassment claims are substantiated.
This publication does not deal with every important topic or
change in law and is not intended to be relied upon as a substitute
for legal or other advice that may be relevant to the reader's
specific circumstances. If you have found this publication of
interest and would like to know more or wish to obtain legal advice
relevant to your circumstances please contact one of the named
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