Federal Court awards landmark general damages penalty in sexual harassment case

In December 2022, a new positive duty was introduced under the Sex Discrimination Act 1984 (Cth) (SD Act). Organisations and businesses are legally obliged to take proactive and meaningful measures to eliminate and prevent unlawful conduct from occurring in the workplace. An employer’s failure to meet this positive duty may result in various statutory contraventions under the SD Act.

These consequences were recently illustrated in the landmark case of Taylor v August and Pemberton Pty Ltd [2023] FCA 1313 which saw the highest amount of general damages awarded in a sexual harassment claim under the SD Act.

Facts

Ms Fiona Taylor was employed by the respondent company, a small business that traded and manufactured jewellery. Mr Simon Grew was the company’s sole director and manager.

Ms Taylor alleged Mr Grew engaged in various acts that constituted unwelcome conduct of a sexual nature in relation to her and made unwelcome sexual advances. This included:

• gifting her numerous unsolicited expensive gifts, such as Chanel coin purse, various pieces of jewellery, $2,000 cash and a Michael Kors bomber jacket;
• making inappropriate comments about Ms Taylor’s physical appearance, including ‘you have a really nice body’; ‘I like petite curvy brunettes’; ‘You have a beautiful body’ and ‘You have bedroom eyes’;
• slapping Ms Taylor’s bottom;
• in early January 2020, told Ms Taylor that he had ‘developed feelings for [her]. I can't hold it inside any longer...I think you're the most beautiful woman I've ever seen...’. (January 2020 confession)
• Despite Ms Taylor expressly stating to Mr Grew that his feelings were not reciprocated, in June 2020, Mr Grew said ‘Hey can I ask you something… Are you and I going to become something or do I need to turn my feelings off?’ (June 2020 confession).

Ms Taylor commenced proceedings against Mr Grew for unlawful sexual harassment under the SD Act, claiming that she was sexually harassed by him for a period of above 22 months while she was employed by his company.

Ms Taylor also lodged a victimisation case against Mr Grew in retaliation for her complaint regarding the sexual harassment to the AHRC. Mr Grew demanded that she returned the various gifts (or their equivalents in cash), alleging they were company property, accused her of theft and threatened to report her to the police.

Decision regarding sexual harassment

The issue before Katzmann J was to identify whether each of Mr Grew’s actions constituted sexual harassment as defined under section 28A of the SD Act, which provides that a person sexually harasses another person if:

• the person makes an unwelcome sexual advance, or an unwelcome request for sexual favours to the person harassed; or
• engages in other unwelcome conduct of a sexual nature in relation to the person harassed;

in circumstances in which a reasonable person, having regard to all the circumstances, would have anticipated the possibility that the person harassed would be offended, humiliated or intimidated.

Apart from the slap on the bottom, which was a clear ‘conduct of a sexual nature’ within the meaning of section 28A of the SD Act, Mr Grew did not inappropriately touch Ms Taylor anywhere else. None of the conduct in question was explicitly sexual.

The January 2020 and June 2020 confessions

These declarations were construed in an indication of Mr Grew’s intention to pursue into an intimate personal relationship with her, implicitly revealing a desire for sex. The conduct was also unwelcome, as Ms Taylor told Mr Grew that she did not feel the same way as him. In this respect, they amounted to ‘other unwelcome conduct of a sexual nature’ within the meaning of that expression in section 28A of the SD Act.

The comments about Ms Taylor’s appearance

Katzmann J considered these remarks as ‘expressions of Mr Grew’s feelings’ for Ms Taylor, rather than ‘sexual advances’. They were, however, unwelcome and, taken collectively, were regarded as ‘other unwelcome conduct of a sexual nature’. Each comment made Ms Taylor uncomfortable.

The gifts

As to whether the gifts were unwelcome, Ms Taylor provided evidence that she felt ‘a little awkward’ and ‘uncomfortable and overwhelmed’. This can be taken as an indication that they were unwelcome. Katzmann J stated that ‘an unwillingness to reject the gifts is understandable’, given her concern with her employment, and the intention to not offend Mr Grew. It was accepted that the gifts were unwelcome.

Nonetheless, the mere act of gift giving is not sexual in nature.

Some 10 gifts were given to Ms Taylor before August 2019. Eight were given after this time. The gifts given prior to August 2019 could not be deemed unwelcome as there was insufficient evidence to suggest Mr Grew had any romantic interest at that time. However, the gifts given after the January 2020 confession unequivocally conveyed Mr Grew’s affection for Ms Taylor, rendering them unwelcome. In these circumstances, Katzmann J determined that even if unwelcome, the act of giving jewellery did not amount to the conduct of the kind described in section 28A of the SD Act.

Decision regarding victimisation

It was found that Mr Grew did in fact victimise Ms Taylor on the basis of the subsequent correspondence Ms Taylor received. Katzmann J stated that the threats had the effect of subjecting Ms Taylor to the ‘threatened detriment of being charged with a criminal offence, and the detriment of being embarrassed, humiliated and/or distressed’.

Damages and compensation

Ms Taylor was awarded total compensation of more than $267,354.64, consisting of:

• $140,000 in general damages for the sexual harassment;
• $40,000 for the victimisation;
• $15,000 in aggravated damages;
• $3,000 for future out-of-pocket expenses;
• $23,070.64 for past economic loss; and
• $46,284 for future economic loss.

Take Home Messages

The enforcement of the positive duty to take reasonable steps to prevent sexual harassment, sex discrimination, hostile workplace environments and victimisation commenced in December 2023. This case serves as a timely reminder to employers who must be mindful of taking immediate action to meet this positive duty. Conduct that may not be overtly sexual in nature may be found to constitute sexual harassment within the meaning of the SD Act.

It is important for employers to implement effective controls to minimise sexual harassment in the workplace. This includes implementing a sexual harassment policy, providing training to managers and educating employees, as well as implementing appropriate reporting pathways.

If you require assistance in complying with your obligations to sexual harassment at work and/or would like to organise training to safeguard your organisation from such significant penalties, please contact Sathish Dasan on +61 8 8210 1253 or sdasan@normans.com.au, Anastasia Gravas on +61 8 8217 1331 or agravas@normans.com.au or Li-shern Sim on +61 407 017 681 or lsim@normans.com.au for assistance.