A recent decision by the NSW Court of Appeal has dismissed an application by a contractor against a ruling by the NSW Civil and Administrative Tribunal ("NCAT") that Sydney Water and the contractor had engaged in sexual harassment of a female employee after a suggestive safety poster was displayed at work.

The decision confirms that even unintentional innuendo can be considered unwelcome sexual harassment under the Anti-Discrimination Act 1977 (NSW) (the "Act").

For behaviours and actions to be unlawfully considered as "sexual harassment", the conduct must be "unwelcome" to the person allegedly harassed.


The decision by the NSW Court of Appeal concerned a ruling by NCAT that both Vitality Works, a contractor and Sydney Water, the employer, had contravened the Act after a poster had been displayed at the Ryde depot of Sydney Water which showed a photograph of the employee over a caption which said "Feel great – lubricate!".

The employee's image had featured on a poster that sought to create awareness for spine health and to encourage staff to warm up their joints before the commencement of their work duties. The employee had been approached by an employee of Vitality Works who expressed interest in using her image as she was a Sydney Water employee working with the largely blue-collar, all male field staff.

Whilst the employee agreed to have her photo taken for a health and safety c aign, she had no knowledge of what the c aign would consist of being a poster that displayed her photo and the words "Feel great – lubricate!". The posters were placed on display in her workplace, outside the male toilets and within the Ryde depot lunchroom. The employee claimed that she felt uncomfortable with the sexual insinuation, especially with her smiling and seemingly highlighting the word lubricate with her hand. It was also established that a photograph of a male colleague had also been taken, but was not incorporated into a poster with the same "Feel great – lubricate!" slogan.


NCAT said that the damage to the employee was $318,280, but reduced that to $100,000 from Sydney Water and the same from Vitality Works due to legislated caps on payouts.

Vitality Works sought to challenge the NCAT decision on several grounds, but primarily relied on an objection to the finding that it was liable for the publication, display and distribution of the poster, saying that it was "so unreasonable that no reasonable Tribunal could have made it". Vitality Works asserted that it was a "third party" involved in the publication, display and distribution of the poster, and therefore Vitality Works was not responsible for the conduct. The Court dismissed this aspect of Vitality Works' appeal, finding that "the design, publication, display and distribution of the poster was done by Vitality Works".

The Court also rejected other grounds which Vitality Works sought to rely on to dispute the finding of sexual harassment, stating among other things that there was "no legal requirement that the perpetrator of sexual harassment intended to sexually harass the victim" and that whether conduct is "unwelcome" for the purposes of the Act "imports a subjective test determined by reference only to the complainant's state of mind".

Key Takeaways

  • Sexual harassment can occur regardless of whether or not the party intended to humiliate nor sexually harass as person;
  • "Horseplay" and other sexual innuendo within the workplace can amount to sexual harassment, and will not be considered a valid defence to a sexual harassment claim; and
  • Employers and contractors can be held liable for sexual harassment and other breaches of discrimination legislation.