The Federal Court recently awarded an employee at a Sydney jewellery store $268,000 in damages for sexual harassment and victimisation.
The decision provides useful insight into how particular gifts could constitute sexual harassment, even if those gifts are accepted by the employee. Separately, despite recent developments in sexual harassment legislation, Courts are inclined to stick with traditional objective ways of determining damages while placing less focus on changing community standards.
What was the decision about?
The employee was employed by a Sydney jewellery store.
In January 2020, the employer confessed his romantic feelings to the employee. However, the employee informed her employer that his feelings were not reciprocated. Despite this, the employer pursued the employee over a prolonged period of time, which included:
- repeatedly making comments about the employee’s physical appearance;
- gifting the employee with expensive unsolicited gifts, such as a Chanel coin purse and jewellery;
- sending the employee inappropriate text messages; and
- slapping the employee on the buttocks.
After one particular incident on 1 June 2020, the employee experienced a decline in her mental health and took personal leave. When she returned, her employer alleged, through his solicitor, that the employee had stolen the jewellery he had gifted to her. The employee alleged that the employment relationship significantly deteriorated from then on.
The Court’s ruling
The Court awarded the employee $140,000 in damages for sexual harassment and $40,000 for victimisation.
The employee submitted for compensation of $250,000 in that it would reflect “
the significant and fundamental shift in community standards.” The employee made reference to a previous case 2014 where the employee received $100,000 in damages with the Court making an observation that, “
in making an award, a court necessarily has regard to the general standards prevailing in the community.”
The Court, in the present case, rejected this submission. Instead, at [520], it held:
“
I have real difficulty with this submission. The purpose of damages is to compensate the applicant for the harm caused to her by the sexual harassment she suffered, not to reflect the community’s appreciation of the extent of harm that can be occasioned by sexual harassment.”
Ultimately, the Court took into account that despite the impact of the employer’s conduct on the employee’s mental health, the employee’s condition had improved and she had since returned to the workforce.
Important lessons
This case is important for three reasons.
- the decision reveals that damages for sexual harassment offences are now increasing, particularly in light of the recent legislative changes relating to sexual harassment.
- the facts of the decision are interesting, in that the employee received certain unsolicited gifts from her employer and the court considered the question as to whether unsolicited (expensive) gifts (which the Applicant accepted and did not return) would constitute sexual harassment. The Court concluded that given the employer was a jeweller by trade and the nature of the employee’s employment, the circumstances in which some of the gifts (in particular, jewellery) were given did not constitute sexual harassment. However, the $2,000 cash, a gift card and a massage did constitute sexual harassment and were “expressions of [the employer’s] affection for “the employee.”
- the remarks from Katzmann J suggests that the Court placed less focus on the changing community standards, and was more interested in applying the relevant legal principles when determining the outcome.
The Human Rights Commissions powers to enforce the new
workplace sexual harassment ‘positive duty’ on employers will take effect from 12 December 2023. This requires all employers to take reasonable steps to eliminate sexual harassment and other unlawful behaviour from occurring in the workplace. Responding to complaints when they arise is no longer enough.
This is another example of how a business can end up in the courts if it doesn't exercise its ‘positive duty’ to eliminate sexual harassment from the workplace by taking all reasonable and proportionate steps to educate, train and communicate with all employees regarding unlawful behaviour. If you need assistance in understanding the steps to take to demonstrate ‘positive duty’, Australian Business Lawyers & Advisors has developed a
six-step toolkit suitable for all businesses.
Get in touch on 1300 565 846 or email
info@ablawyers.com.au for details.
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