On 6 March 2023, amendments to the Fair Work Act 2009 (Cth) (‘FW Act’) commenced, and which empower the Fair Work Commission to deal with sexual harassment disputes through broader powers than the pre-existing ‘stop sexual harassment’ order jurisdiction provided for.

These changes follow the Anti-Discrimination and Human Rights Legislation (Respect at Work) Act 2022 (‘Respect@Work Act’), which amended the Sex Discrimination Act 1984 to expressly prohibit hostile workplace environments and provided the Australian Human Rights Commission (‘AHRC’) with new functions, including the capacity to mandate compliance.

Critically for employers, the Respect@Work Act implemented a new positive duty on employers to take reasonable and proportionate measures to eliminate sex discrimination, sexual harassment, and victimisation in connection with work. The aim of the legislation is to change the previous, reactive complaint-based framework, to a proactive compliance-based system. Importantly, this duty now applies to all employers across Australia.

This Update will explain what the Commission’s new sexual harassment dispute framework means for employers.  It also examines a case which provides an instructive lesson for employers on the consequences of failing to comply with the new positive duty to eliminate sexual harassment in their workplace.

How the FWC will deal with Sexual Harassment Disputes

The Fair Work Commission (‘Commission’) has now been empowered to deal with sexual harassment disputes in a manner which represents an expansion to its existing power to make ‘stop sexual harassment’ orders. Any person who is subject to sexual harassment in connection with work can now apply to the Commission to have the Commission deal with the sexual harassment dispute and, if they remain connected to the workplace, may also apply for a ‘stop sexual harassment’ order at the same time.

Since 2021, the FWC has been empowered to issue ‘stop sexual harassment’ orders on application by a current employee.  The Fair Work Commission can issue a ‘stop sexual harassment order where the Commission determines sexual harassment has occurred in the workplace and where they find that there is a risk that this conduct will continue. Critically, the Fair Work Commission cannot award monetary compensation to the victim of sexual harassment as part of a ‘stop sexual harassment’ order.

Under its expanded powers, the Commission will also now be able to deal with sexual harassment disputes by conciliation, expressing an opinion or by making some other recommendation to the parties. The Commission must begin to deal with a sexual harassment dispute application within 14 days.

If the dispute cannot be resolved using those methods, and the Commission is satisfied that all reasonable attempts to resolve the dispute have been, or are likely to be, unsuccessful, the Commission will issue a certificate that says this.  At this point, the parties may (but are not required to) agree for the Commission to deal with the matter by way of binding arbitration.  Through arbitration, the Commission can make an order for compensation, or for the payment of lost remuneration, or to require a person to do something to remedy the loss or damage. If the parties do not agree to arbitration, then the applicant has the option to make an application to a court to pursue a sexual harassment claim.

Unlike the existing ‘stop sexual harassment’ order jurisdiction, applications for the Commission to deal with a sexual harassment dispute in one of these other ways can be made by employees who no longer have a connection to the workplace. However, the Commission may decline to deal with a dispute if the application is made more than 2 years since the last alleged contravention.

Why it is important to comply with the positive duty to prevent workplace sexual harassment – Kumari v Bervar Pty Ltd (Della Rose)

There has not been a significant decision handed down since the new positive duty to prevent workplace sexual harassment, sex discrimination and victimisation commenced (Australia wide) in December 2022. However, it is instructive to examine the Victorian decision of Kumari v Bervar Pty Ltd, which offers great insight into what future decisions may look like.  This case is instructive because the positive duty that is now Australia-wide, already existed in Victoria at the time of the decision.

In this case, the Victorian Civil and Administrative Tribunal (‘Tribunal’) awarded a sexually harassed employee more than $53,000 in compensation following the employer’s contravention of the Equal Opportunity Act 2010 (‘EO Act’).  The Tribunal in this case found that the employer, Bervar Pty Ltd trading as Della Rose Fresh Foods (‘Company’), was in breach of the abovementioned positive duty.

Background

In late 2017, the employee made her supervisor aware that a co-worker would continually look at her breasts instead of her face when talking to her. The supervisor spoke to the co-worker, who started crying and denied the allegation. The supervisor then informed the complaining employee that he believed her co-worker’s version of events and that her claim was unfounded. The supervisor then told the managing director of the Company that the claim was not to be believed.

Following this conversation and on the request of the director, the supervisor directed the employee to follow him in her car, and they went to speak with the managing director and the Company’s HR representative. The employee alleged that, during this discussion, the managing director challenged her complaint and required her to explain how a co-worker could look at her body when she was clothed and wearing her uniform.

After this meeting, the supervisor directed the employee to take annual leave. Upon her return, she was informed she was being transferred to a different workplace with more female workers, and despite her being unfamiliar with the type of work at that workplace. The employee was given no alternative but to transfer, and the employee alleged that the director threatened her employment if she did not accept the transfer.  After the employee refused to be transferred, and after taking several periods of leave, her employment was subsequently terminated in early 2018.

Decision

Notably in this case, and unlike the victimised employee, the offending co-worker was never spoken to by the managing director or called into the supervisor’s office. This conduct formed the basis for what the Tribunal decided was clear, unfavourable treatment (based on gender) in investigating the complaint. It was determined that neither the supervisor nor the managing director gave the complaint proper consideration.  The Tribunal noted that the complaint could have been quickly resolved through a warning being issued to the co-worker to not engage in that conduct again.

The Tribunal found that the conduct that was complained about was clearly unwanted sexual conduct and stated that the employer was severely misguided in its claim to the contrary. It was immaterial that the co-worker did not physically touch the employee’s body, as a gesture or action such as leering or staring can amount to unwelcome sexual conduct.

The Tribunal determined that the direction to take leave was only made to the employee because she complained about the co-worker’s conduct, and this deprived her of the future benefits of that annual leave. As the employee was not given a choice in the transfer, the Tribunal found that this act was, again, less favourable treatment which was imposed solely because the employee was a woman and had complained of sexual harassment.

In addressing the employer’s positive duty to eliminate discrimination, sexual harassment, and victimisation, the Tribunal said:

“…all Victorian employers have a positive statutory duty to take reasonable and proportionate measures to eliminate discrimination, sexual harassment or victimisation as far as possible. It is a serious obligation, and, in the context of that statutory obligation, Victorian employees have a legitimate expectation that they will be treated fairly when they make a complaint about contravention of the EO Act. An employer who is not alive to that expectation, and its obligations under the EO Act, is at risk of injuring their employees if their conduct contravenes the Act.”

Remedy

In its submissions on remedy, the employer submitted that the employee should be awarded a mere $500 for her sexual harassment claim and less than $2,000 for her discrimination claim. In response, the presiding Tribunal member stated that these amounts would essentially trivialise the co-worker’s conduct and vastly overlooked the “high handed” disregard the employer demonstrated for its obligations.

In awarding the employee $53,241 in general damages and for past economic loss, the Tribunal stated that the employer sought to “diminish” its contraventions at every turn.  The Tribunal noted that the employer provided no evidence that it had conducted even the most basic workplace training in sexual harassment matters for either employees or managers.  This meant that the employer had essentially refuted its positive duty to protect the employee, and overwhelmingly failed to provide a safe workplace, free from sexual harassment and discrimination.

Key Take-aways

Following the Respect@Work reforms, all employers across Australia now owe the same positive statutory duty as was owed in this case.  Employers will contravene the federal Sex Discrimination Act 1984, as well as other state-based legislation, if they make the same mistakes as this employer.

This case makes it plainly clear that employers must take the positive duty to eliminate sex discrimination, sexual harassment, and victimisation seriously.

Employers should pay particular attention to the Tribunal’s disapproval of the Company’s lack of workplace training in sexual harassment matters and its overt mismanagement of the sexual harassment complaint. The Tribunal continually noted that this dispute could have been quickly remedied by proper investigation, and by issuing a warning to the offending co-worker.  The dispute could have been prevented all together through the implementation of proper sexual harassment procedures and policies.

Disputes of this nature may now be more readily dealt with by the Fair Work Commission through its new powers. While no financial compensation can be ordered through a ‘stop sexual harassment’ order, employers should be aware that a separate claim for compensation may be made via a sexual harassment dispute (either through arbitration by consent in the Commission, or through an application to a court).  Employers who fail to take reasonable steps to prevent sexual harassment in the workplace, may also face significant reputational damage and the significant risks that flow from employees sustaining a psychological injury as a result of such conduct.

In light of recent changes to the law on sexual harassment, employers should consider contacting Aitken Legal to receive advice on whether their workplace policies are adequate, and how to best discharge their positive duty to eliminate sexual harassment in the workplace.