Company vicariously liable for harassing conduct of manager

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Company vicariously liable for harassing conduct of manager

Under the Equal Opportunity Act 1995 (Vic) a company may be liable for the harassing or discriminatory conduct of one of its managers.

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Under the Equal Opportunity Act 1995 (Vic)a company may be liable for theharassing or discriminatory conduct of one of its managers. 

In Delaney v Pasunica Pty Ltd & Anor, [2001] VCAT 1870, (13 September 2001), the VictorianCivil and Administrative Tribunal ordered a takeaway shop and its manager to pay a 16-year-old female sales assistant $25,000 in general damages for hurt, humiliation, loss of dignity and injury arising from sexual harassment and discrimination. In awarding a substantial amount in damages for hurt and humiliation, the Tribunal took into account evidence that the complainant developed severe anxiety, an adjustment disorder, other effects such as nightmares, reduced self-esteem and feeling unsafe around older males, and an increased incidence of asthma due to stress-related smoking.

Background

These proceedings stem from a complaint made to the Victorian Civil and Administrative Tribunal against Pasunica Pty Ltd (trading as Seasoned Chicken Homestyle) and one of its managers, a Mr Daley. The complaint was made by a 16-year-old female who at the time was in the first week of her first job. Working as a sales assistant and kitchen hand in a chicken shop, the former employee (the complainant) alleged that she had been sexually harassed and discriminated against contrary to the provisions of the Equal Opportunity Act 1995 (Vic). The complainant alleged that her 40-year-old manager had made unwelcome sexual advances and requests for sexual favours, harassed her, and discriminated against her on the basis of her sex. The complaint also extended to the company. It was claimed that the company was vicariously liable under sec 102 of the Act for the actions and conduct of its manager.

The allegations were divided into two claims. The first claim was one of sexual harassment, and the second claim was one of direct discrimination in employment on the ground of sex. Section 85 of the Act defines sexual harassment as unwelcome sexual advances or unwelcome requests for sexual favours or any other unwelcome conduct of a sexual nature in circumstances in which a reasonable person having regard to all the circumstances, would have anticipated that the other person would be offended, humiliated or intimidated.

In these proceedings the complainant made a number of specific allegations against her manager. They included the claim that the manager: poked the complainant in the buttock several times using a rotisserie fork; made inappropriate comments whilst staring at the complainant's breasts; groped the complainant's breasts; repeatedly requested sexual favours.

Submissions

In these proceedings, the burden of proof was upon the complainant to prove her case on the balance of probability. The manager's primary defence was to deny each and every allegation. It was claimed by the manager that the complainant was an unreliable worker who had fabricated the complaints in order to obtain compensation. In this regard, the manager submitted that no-one else heard or saw the alleged acts and as the complainant had not brought forward any eyewitnesses then it must be the case that none of the allegations occurred.

The complainant relied upon expert evidence. This included the evidence of a psychiatrist who testified that the complainant's mental state of health was consistent with that of someone who had suffered harassment of the kind alleged by the complainant. Also in support of the complainant's case was evidence from a Counsellor at the Centre Against Sexual Assault. The Counsellor gave evidence of the trauma suffered by the complainant and the eighteen months of counselling that she had conducted with the complainant. Finally the complainant obtained evidence from her general practitioner, the evidence revealed a marked decline in the complainant's respiratory health, this it was claimed was prompted by increased smoking which in turn was prompted by the stress of the events alleged by the complainant.

Consideration of the tribunal 

In her consideration of this matter, the Deputy President of the Tribunal found that a determination depended upon the oath of the complainant against that of the manager. In matters in which the parties disagreed or where there was dispute the Deputy President was inclined to accept the evidence of the complainant. The Tribunal found the complainant's evidence to be straightforward and truthful, the evidence was held to be consistent and did not appear to have any hallmarks of concoction. On the other hand, the manager's evidence was found to be less than straightforward, and in some instances evasive. In this regard, the Tribunal held that the mere fact that no one-else saw the events alleged by the complainant did not necessarily mean that on the balance of probabilities, those events did not occur.

In accepting the evidence of the complainant over that of her manager, the tribunal found that the allegations of the complainant did occur. The tribunal also found that those allegations clearly amounted to sexual harassment as defined in the Act. Given that the complainant's claim succeeded on the basis of sexual harassment, the Deputy President did not address the question of discrimination. In fact, it was the Deputy President's view that the case was more appropriately disposed of as a case of sexual harassment.

Vicarious liability 

Section 102of the Act provides that if an employee or agent of a companycontravenes the Act then the company will also be liable for that conduct. A Company can only be excused from its liability, if it can demonstrate that it took reasonable precautions to prevent the employee or agent from contravening the Act. In these proceedings, a complaint of sexual harassment was proven against the manager of Pasunica Pty Ltd. It was submitted by the complainant that no reasonable precautions were taken by the company to prevent its manager from contravening the Act. It was also alleged that no sexual harassment or discrimination policies were communicated to the staff of the company, and if there was such a policy it was not applied. The complaint against the company was proven and the Tribunal held that both the manager and the company were liable for the conduct of the manager.

Awarding of damages

The complainant made a claim to the Tribunal for general compensation for loss and injury, compensation for loss of earnings and medical expenses. As a result of the conduct that was proven, in these proceedings it was argued that the complainant was entitled to an award of general compensation for the hurt and humiliation suffered as a consequence of those events. In this regard, the Counsellor from the Centre Against Sexual Assault gave evidence that as a qualified social worker, it was her observation that the complainant presented as a distressed and confused young person struggling to understand why her manager violated his position of power.

The Tribunal was satisfied that on the complainant's evidence and the evidence of her witnesses who substantiated her ongoing condition of adjustment disorder with associated anxiety, that the complainant had suffered substantial trauma, stress, hurt and humiliation as a result of her manager's conduct. It was the Tribunal's view that the complainant's condition and the effects of those events upon her had been significant and entitled her to substantial compensation. In awarding the sum of $25,000 for the complainant's hurt, humiliation, loss of dignity and injury, the Tribunal took into account the nature of the harassment. This included the fact that the harassment was:

  • of a physical nature;
  • of an oppressive nature;
  • involved conduct by a much older male and a sixteen year old girl in the first weeks of her first job; and
  • included threats to deny the conduct.

Both the manager and the company were held to be jointly and severally liable for the award of general damages. The tribunal also awarded $3,617.60 for the complainant's loss of earnings and $871.75 for medical expenses. Once again the manager and the company were jointly and severally liable.

Subscribers requiring further information should contact Ross Nassif - tel. (02) 9458 7391; email: hr_link@abol.net 

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