Sex crimes at work: High Court creates test for employer liability

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Sex crimes at work: High Court creates test for employer liability

The High Court has revealed when and how employers will be held vicariously liable if their employees commit crimes of sexual assault at work. This is particularly relevant to those in the caring, medical and teaching professions and those at remote worksites.

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Employers now have guidance from the High Court as to how and when the courts will hold them vicariously liable if their employees commit crimes of sexual assault at work.

Factual background


A man, (referred to here as “X”) had his adult life ruined by a repeated series of molestations carried out against him as a 12-year-old by schoolteacher “DB”, employed at the Prince Alfred College boarding school in Adelaide.
 
DB’s functions as a “housemaster” were important to the case. Among other things he was in charge of the dormitories and would often be present for “lights out”. He also often told stories to the boys in the dormitory after lights out.

DB was later convicted (in 2007) of several counts of indecent assault (consisting of touching the genitals, oral sex and kissing) against several boys; and that the abuse lasted for “some months”. He was also dismissed “very quickly” from his employment shortly after management at the Prince Alfred College discovered the abuse in or about October 1962. 
 
At that time, X only disclosed the abuse to the Prince Alfred College chaplain and he obeyed the school’s instruction to keep the details of the abuse confidential. 

However, the trauma of the event on X was to be long-lasting, profound and destabilising.
 
He felt “conspicuous” and “uncomfortable” at university and later dropped out. Although he developed a successful career in buying and selling small businesses, over the course of his life he developed mental health problems, anxiety, inadequacy, concentration, decision making and physical tremors. He also developed drinking problems. 
 
About 35 years later, in July 1997, he disclosed to a psychologist that he had suffered childhood sexual abuse – the first time since 1962 that he had done so. 

The psychologist diagnosed X as suffering from post-traumatic stress disorder. X continued to deteriorate, suffering flashbacks, dissociation, panic and nightmares. His marriage broke down, his business failed, his drinking got worse and his symptoms became more severe. He became suicidal. His finances deteriorated and he had to sell the family home.
 
In 1997, X contacted the Prince Alfred College and it was agreed the College would pay X’s medical and legal fees and his son’s school fees for $10,000 a year for three years. X also later sued DB, reaching a settlement in which DB agreed to pay $15,000 to X. 
 
By 2004, a psychologist said that X would not work full-time again. In 2008, X sued the Prince Alfred College on a variety of grounds, one of which was that the school should be held responsible for the actions of its employee under the doctrine of vicarious liability. 
 
The case worked its way through the hierarchy of courts, ultimately being decided in the High Court of Australia. 

Out of time


Ultimately, the case was dismissed on the grounds that it was out of time and was unfair to grant an extension of time (a lot of the records and notes had been destroyed or lost over time; and several key witnesses had died). The High Court also thought it unjust to allow X to sue in 2008 after he had already arranged a settlement in 2008.
 
However, the High Court also made an important ruling in the area of vicarious liability for employee criminal sexual conduct. 

Vicarious liability – when will employers will be liable for employee actions?


The High Court noted that the law was incoherent in this area for a variety of reasons but it attempted to draw together law from a variety of UK, Canadian and Australian cases.

Firstly, it was confirmed that for an employer to be held liable then the wrongful act must be committed in the course of employment. 

It was then held that, while an employee committing a crime does not necessarily take the step ‘outside of the course of employment’ so as to prevent employer liability, the fact that employment gives an opportunity to commit crime is not enough in itself to hold an employer liable. 

To provide guidance between the two situations, the court argued that “it may be sufficient to hold an employer vicariously liable for a criminal act committed by an employee where, in the commission of that act, the employee used or took advantage of the position in which the employment placed the employee vis-à-vis the victim.”

The 'relevant approach'


The court then determined that, what it called, “the relevant approach” is to consider any features of any special role that an employee fills which gives the opportunity to carry out such crimes. These will include authority, power, trust, control, and the ability to achieve intimacy with the victim.

“The latter feature may be especially important,” it was ruled. 
 
However, the High Court then went on to point out that such cases will always turn on their exact facts. 
 
“The 'relevant approach'… does not and cannot prescribe an absolute rule. Applications of the approach must and will develop case by case. Some plaintiffs will win. Some plaintiffs will lose,” the court said.

However, it asserted, “We accept that the approach described “as the "relevant approach" will now be applied in Australia”. 

What this means for employers...


This is an extremely important decision for the following reasons: 
  • it is a decision of the highest court so it has very high precedent value for all courts and tribunals dealing with this or related topics in Australia
  • on the point of the “relevant approach” it was a unanimous decision of the six judges
  • the court drew together a doctrine of vicarious liability in criminal conduct from a previously tangled and incoherent area of law
  • it gave clear guidance as to when criminal sexual conduct will likely be inside, or outside, the scope of employment
  • there is a wide and general applicability of the “relevant approach” doctrine which takes into account the factors of authority, power, trust, control and "the ability to achieve intimacy" with the victim.   
Obviously this will likely apply to doctors and nurses of all kinds, carers of all kinds (e.g. child care, aged care, invalid care) and so on. But it may well also apply, as in this case, to teachers or other such occupations.

And there are wider applications. Let’s consider the position of such occupations and relationships such as senior officers to ratings aboard offshore vessels servicing the Australian oil and gas fields. The senior officers will certainly have features of authority, power, trust and control and may well have the ability to achieve intimacy.

What about, for instance, mining supervisors and junior employees fresh to the workforce? Or people who may work remotely or travelling employees of all kinds such as consultants and sales people? And what about less remote situations, such as the office-relationship between an executive and secretary? 

It’s quite possible – probable, even – that a senior executive would have authority, power, trust and control. It is quite imaginable that there could be the opportunities to achieve intimacy – working late, working at the weekend and working together at conferences/events being held at hotels (especially where alcohol is involved) are three obvious examples. 
 
HR managers should raise the issue with the appropriate persons to check that the business insurance provides cover and is valid. Given the length of the case above, the multiple appeals and the likely billable lawyer hours incurred, we can only infer that the legal bills alone would be eye-watering.
 
HR managers would also need to apply this decision to their business, check that policies and employment agreements include codes of conduct with clauses specifically prohibiting sexual harassment of fellow workers and/or people that workers would come into contact with. HR managers should consider appropriate induction and refresher training. 
 
And, most importantly, HR managers should think of ways/liaise with colleagues to identify high risk areas and then ideally eliminate that risk. The hierarchy of controls principles could well be useful.

In the Prince Alfred College case, it is difficult to see how the college could have eliminated the risk (the college needed to have boarding masters to be responsible for the children). However, perhaps there could have been administrative controls requiring “lights on” after hours when boarding masters are in dormitories. Another could have been that, when masters are needed in dormitories then there must be at least two present, which would prevent there being an “ability to achieve intimacy”. 
 
And perhaps such controls could have prevented the abuse and the consequent lifetime of failure, despair and misery for Mr X.  
 
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