“Manifestly inadequate” damages significantly increased upon Appeal as a result of extremely serious sexual harassment in the workplace

On 9 March 2021, the Queensland Industrial Relations Commission (the Commission) determined that Ms Perlita Golding had been sexually harassed whilst she was employed by The Laundry Chute Pty Ltd (the Laundry Chute) by Mr Ian Sippel, its owner and manager.

The Commission ordered that The Laundry Chute pay Ms Golding the total sum of $50,960.75 on account of economic loss and general and aggravated damages in addition to her costs on the relevant Court scale.

Ms Golding appealed against the quantum of compensation and the costs order. While the costs order was not overturned, the Industrial Court of Queensland (the Court) set aside the Commission’s award of compensation and substituted it for a total amount in excess of $158,000.

The Court’s decision is yet another example of our judicial system adopting a zero-tolerance stance to sexual harassment in the workplace.

Facts

Ms Golding was employed by The Laundry Chute from June 2017 for a period of about 14 months on a casual basis. She held sole financial responsibility for providing for her four children after experiencing domestic violence at the hands of her ex-husband.

Soon after she commenced her employment, Ms Golding became the subject of escalating sexual harassment and discrimination by Mr Sippel. Ms Golding alleged that Mr Sippel engaged in behaviours such as unwelcomed touching, offering payment in return of sexual intercourse and went as far as sexually assaulting Ms Golding whilst she was at work. Following the refusal of his sexual advancements, Mr Sippel would send Ms Golding home and withdraw working hours from her.

Ms Golding ultimately feared for her safety and reported Mr Sippel’s behaviour to the police. She was advised not to return to the workplace and received workers’ compensation payments after suffering psychological injuries as a result of Mr Sippel’s actions.

Ms Golding filed a complaint alleging sexual harassment and direct discrimination on the basis of sex, pursuant to sections 136 and 141 of the Anti-Discrimination Act 1991 (Qld) (the A-D Act).

Decision at first instance

At the hearing before the Commission, Mr Sippel denied a number of Ms Golding’s allegations, and in other circumstances accepted his conduct but sought to trivialise it as light-hearted “banter”.

The Commission found that, for the most part, the allegations were substantiated, and that the behaviour of Mr Sippel constituted sexual harassment for the purposes of the A-D Act. Further findings were made by the Commission that the acts committed by Mr Sippel were sexually discriminatory in that Ms Golding was treated less favourably in the workplace because she was a woman.

Compensation was assessed by the Commission at $15,960.75 for economic loss, $30,000 in general damages and $5,000 in aggravated damages. The economic loss was calculated based on Ms Golding’s casual employment status as well as taking into consideration the closure of The Laundry Chute in September 2019. As such, the time from the cessation of her employment to September 2019 was determined as the period of loss. The general and aggravated damages were assessed primarily on the basis of Ms Golding’s psychological injury as well as comparing damages to similar authoritative cases.

Decision on appeal

Ms Golding later filed an appeal on the grounds that the Commission erred in law in determining the economic loss, general damages and aggravated damages. Ms Golding argued that the award of general and aggravated damages were manifestly inadequate.

Justice Davis of the Court held that the Commission had erred in law by confining the consideration of economic loss to a period during which The Laundry Chute may have employed Ms Golding, had it not been for the actions of Mr Sippel. The Court determined that the appropriate approach in calculating economic loss was to calculate Ms Golding’s loss over the full period up until the date of the first hearing. As such the economic loss of $15,960.75 was set aside and in place was increased to $28,702.60.

In reaching the determination on the general and aggravated damages, the Court held as follows:

“The award of damages is, in my view, manifestly inadequate.

Mr Sippel’s conduct was extremely serious. Over a period of 14 months, he tormented Ms Golding, a woman who had little choice but to work for The Laundry Chute and put up with him because of her financial position. It was that reason why she tolerated his lewd and disgusting behaviour. On every day she appeared for work, she knew the prospect was that she would be humiliated and demeaned sexually by him.”

The Court believed that the Commission had concentrated too much on the direct medical consequences of the behaviour, rather than the overall damage of Mr Sippel’s actions. As a result, the Court set aside the original damages of $30,000 (general) and $5,000 (aggravated) and awarded the sum of $130,000 for combined general and aggravated damages to Ms Golding.

Take Home Messages

A clear message can be heard from the decision of the Court to increase damages in this case – sexual harassment in the workplace will incur severe and high penalties.

Currently, there is a very persistent social push for the elimination of sexual harassment in the workplace. Decisions such as this reiterate the message from our judicial system that workplace sexual harassment will not be tolerated, and victims will be heard.

Significantly, on 19 August 2021, the Fair Work Regulations 2009 (Cth) were amended to include “sexual harassment” as serious misconduct and as a result, grounds for summary dismissal.

Employers are encouraged to implement robust policies and procedures which address sexual harassment and conduct expectations in the workplace, as well as taking opportunities to train staff members on appropriate behaviour at work and out of hours, including on social media.

With this in mind, Norman Waterhouse is pleased to offer a new training workshop focusing on the prevention, awareness and handling of sexual harassment complaints. For more information click here.

To find out how Norman Waterhouse can assist you with this process or for more specific information on any of the material contained in this article, please contact Sathish Dasan on +61 8 8210 1253 or sdasan@normans.com.au, Virginia Liu on +61 8 8210 1279 or vliu@normans.com.au on or Anastasia Gravas on +61 8 8217 1331 or agravas@normans.com.au.