25 March 2023
Employers including companies under the national system of employment laws face collateral sources of risk from sexual harassment at work. These risks proceed from both Federal and State legislation.
As of December 2022, the Sex Discrimination Act 1984 (Cth) prohibits conduct creating a hostile workplace environment based on sex.
This prohibited conduct can include offensive, sexual-related jokes. The Australian Human Rights Commission is empowered to enforce compliance with this positive duty.
Similarly, this Act imposes a positive duty on employers to take "reasonable and proportionate measures" to eliminate sex discrimination, sexual harassment, and related victimisation at work. These factors establish the threshold for “reasonable and proportionate measures”:
For a company, the maximum fine for breaching this positive duty is $27,500.
The Sex Discrimination Act 1984 (Cth) also establishes a general prohibition on sexual harassment taken against another individual. In short, this occurs if:
Where an employee engages in sexual harassment towards another at work, as a starting position, the employer is vicariously liable under section 106 of the Sex Discrimination Act 1984 (Cth). In this event, the employer’s only defence is that it took “all reasonable steps” to prevent the harassing employee from committing sexual harassment.
Under section 527D of the amended Fair Work Act, a person must not sexually harass another person who is a worker, or seeking to become a worker, or a person conducting a business or undertaking. The penalty for non-compliance with this civil penalty provision is up to $16,500 for individuals and $82,500 for a body corporate.
Legal persons may be liable under this part of the Fair Work Act for actions performed by their employees or agents. Vicarious liability, however, does not apply if the employer proves that it (or he/she in the event of a principal) took all reasonable steps to prevent the sexual harassment.
An employee may apply to the Fair Work Commission (“FWC”) for a ‘stop’ sexual harassment order. The FWC shall grant such an order if:
When granting such an order, the FWC cannot award the employee compensation from sexual harassment. However, if a person is bound by a sexual harassment order (such as a company), and the same person breaches that order, this constitutes a breach of a civil penalty provision.
There are two further points to be made about ‘stop’ sexual harassment orders. First, a person who has brought such an application to the FWC must not make a Court application for sexual harassment (such as under the Sex Discrimination Act 1984 (Cth)) unless certain requirements are met.
Second, if the parties agree to the FWC arbitrating the dispute on sexual harassment, before the FWC decides to make (or not make) a stop sexual harassment order, the employee cannot later make a sexual harassment Court application.
There is also a limitation on bringing an application to the FWC in circumstances where the complainant already lodged a complaint with the Australian Human Rights Commission unless that complaint is withdrawn or failed for want of jurisdiction.
Various States have implemented legislation promoting equal opportunity. Section 24 of the Equal Opportunity Act 1984 (WA) prohibits sexual harassment against another employee. If an employee engages in sexual harassment, this triggers three major consequences.
First, as in related legislation and as a starting position, an employer is vicariously liable for the sexual harassment of its employees. In this event, the employer’s only defence is to have taken “all reasonable steps” to prevent the harassing employee from committing sexual harassment.
Second, if vicarious liability is established, the Equal Opportunity Commission can require the employer to pay the complainant up to $40,000 in compensation or make other similar orders.
Third, under section 160 of this Act, a person who causes, instructs, induces, aids, or permits another person to engage in sexual harassment – is taken to have engaged in sexual harassment. This provision could be enlivened where an employee engaged in sexual harassment, and the company director was aware of and disregarded such conduct.
All States and Territories have implemented legislation that places obligations on a person conducting a business or undertaking (PCBU) to ensure the workplace is without risks to the health and safety of any person. In WA it is regulated by section 19 and 20 of the Work Health and Safety Act 2020 (WA).
Question: To what extent must an employer ensure compliance with this duty?
Answer: In short, this compliance must extend “as far as is reasonably practicable.”
Regarding this duty, sexual harassment is impliedly prohibited, as part of the obligation to provide a safe workplace.
If a company significantly breaches this duty, Worksafe may initiate a prosecution, for which significant fines may be payable. The maximum fine for breach of a health and safety duty depends on if this is a ‘Category 1’, ‘Category 2’, or ‘Category 3’ offence. If a Category 2 offence is committed – a breach which exposes an individual to a risk of harm to the individual’s health – the maximum fine for a company is $1,800,000. Likewise, the maximum fine for an individual member of company management is $350,000.
There are two further points regarding the obligation to provide a safe workplace.
First, a company, a director, or employee cannot be indemnified by any insurance policy regarding prosecutions or fines made under the Work Health and Safety Act 2020 (WA).
Second, since this Act become operative from 31 March 2022, Worksafe has signalled an intention to prosecute employers for alleged unsafe workplaces concerning sexual harassment. On this point, in February 2023, Worksafe laid charges against Fortescue Metals Groups for failure to supply documentation in response to alleged sexual harassment.
To repeat, employers face collateral sources of risk from sexual harassment at work. Given this, ECA Legal encourages employers to review their sexual harassment policies, implementation, and associated procedures for mitigating the above risks.
Disclaimer: This summary is a guide only and is not legal advice. For further information, call ECA Legal on (08) 6241 6129 or email email@example.com.