Sex-based harassment and positive duty obligations tested in Federal Court with recent case

The ‘record-breaking’ $305,000 damages award to a former Mad Mex employee who endured sexual harassment from her manager while working in a suburban Food Court has sounded yet another alarm for employers who are not compliant with the ‘positive duty’ to prevent sexual harassment.

The Complainant was employed by Mexicali Enterprises Pty Ltd, a franchisee of Mad Mex Franchising Pty Ltd and was in her early 20s.

The Federal Court of Australia has found that during the early part of 2023, the Complainant was subject to a pattern of sexual harassment and other unlawful behaviours.

Discretion and (corporate content filtering) requires that this article does not specifically outline the graphic detail of the established conduct (involving sexualised comments, requests and questions, displays of adult content and marital aids).

Even without that graphic detail, the case provides an important example of litigation arising from breaches of the Sex Discrimination Act and may provide some insight for workplace investigators who are addressing allegations of sexual harassment prior to proceedings being brought.

Evidence and the Standard of Proof

Notwithstanding the seriousness of the allegations (and the ultimate size of the damages payout), the case proceeded simply on the witness evidence of the Complainant, the witness evidence of the Respondent (which was an absolute denial of any inappropriate conduct) and evidence of a medical practitioner relating to the Complainant’s health.

As noted by the presiding Judge, this was not unusual in a situation where there were no witnesses to the various incidents. With the matter amounting effectively to a ‘he said, she said’, the Judge preferred the evidence of the Complainant, finding her evidence to be:

This aspect of the case demonstrates that in a scenario of ‘one word against another’, notwithstanding a lack of other witnesses or physical evidence such as CCTV, audio recordings or emails, the ‘balance of probabilities’ standard of proof can still be satisfied. 

Workplace investigators who are faced with similar ‘he said, she said’ allegations may find the decision instructive.

Sex-based harassment

The decision is notable as the first case to consider the ‘sex-based harassment’ offence since it was introduced into the Sex Discrimination Act in September 2021.

Relevantly, Justice Bromwich found that whilst the conduct under section 28AA 

The Judge also made a finding that two of the most senior men in the store fostered a workplace culture which was indifferent to preventing sexist conduct from taking place and was instead tolerant, even encouraging, of its continuation. 

Ultimately, however Justice Bromwich wasn’t satisfied the conduct was harassment on the ground of sex in relation to the Complainant because it wasn’t directed to her. The only conduct that might have constituted harassment on the ground of sex was comments made to the Complainant about her attire and body when she wore skinny jeans to work. However, insufficient evidence was presented to establish a contravention.

Limitations on defence arguments 

This case also raises questions about the scope of arguments that should be advanced in defence of a sexual harassment claim. Justice Bromwich criticised submissions made on behalf of the Respondent, including that the conduct was less plausible because the Complainant had been friendly with the Respondent, and that her past exposure to adult content made her less likely to be offended. The Judge described these arguments as unsupported and based on outdated notions of how people respond to harassment, raising the question whether they should have been made at all. 

Victimisation through defamation Threat

This case is also an important warning for lawyers in circumstances where a client who has been accused of sexual harassment gives instructions to allege defamation against a Complainant.

In the case, the Judge found a threat to sue the Complainant for defamation amounted to unlawful victimisation.

The manager was effectively found to have attempted to ‘silence’ the Complainant by engaging his lawyer to send her two defamation ‘concerns notices’ after she tried to take her complaint forward.

The concerns notices served by respondent’s lawyer were found to have caused the applicant a real level of distress which went beyond being trivial, that distress therefore was a detriment within the meaning of s47A of the Sex Discrimination Act.

The sending of both concerns notices therefore constituted acts of victimisation contrary to s47A(1) of the Act. 

This finding should give pause to any person accused of sexual harassment who is considering using legal threats to counter allegations against them.

Personal liability

Unusually, the proceedings were brought against an individual rather than a company.

This was a result of the insolvency of the legal employer.

It demonstrates that the ultimate personal responsibility of individuals who engage in unlawful sexually harassing behaviour, and the considerable financial risks arising from that behaviour.

The Positive Duty

The case provides a strong reminder of the importance of taking steps to ensure compliance with the ‘Positive Duty’.

As should now be well-known, all Australian employers have an obligation to take proactive steps to prevent sexual harassment and other unlawful conducts including through the enforcement of specific policies, regular training of staff, creation of reporting system and regular risk assessments. 

Even without a ‘complaint’ or an ‘incident’, businesses who have not taken steps to comply with the Positive Duty are in breach of the law and are currently facing serious risks.

ABLA offers a "Sexual Harassment Positive Duty Toolkit" to help businesses meet their legal obligations regarding sexual harassment prevention. This toolkit is designed to be a comprehensive resource, providing guidance and practical tools for implementing effective measures to eliminate sexual harassment in the workplace.