Sexual harassment and the positive duty for employers: Landmark payout under the Sex Discrimination Act 1984

The Federal Court recently handed down a landmark decision awarding a significant sum of general damages under the Sex Discrimination Act 1984 (Cth) (SDA) to an employee who had been sexually harassed by her boss at work.

In Taylor v August and Pemberton Pty Ltd [2023] FCA 1313, Ms Taylor ─ a young worker in a jewellery store ─ was awarded more than $268,000 in damages after experiencing sexual harassment by her manager and the business owner, Mr Grew, over a period spanning 22 months.

The case is the Federal Court's latest exploration of the meaning of sexual harassment under the SDA and deals with whether giving gifts, making certain comments about an employee's body, declarations of romantic feelings and an inappropriate slap constitute sexual harassment.

Key takeaways for employers

• Enforcement of the positive duty to take reasonable and proportionate steps to eliminate sexual harassment, sex discrimination, hostile workplace environments and victimisation commences in December 2023. Organisations should be taking steps now to implement action plans to meet this duty.
• The high award of general damages for a complaint under the SDA illustrates the court's views on the seriousness of sexual harassment in the workplace and the impact it has on individuals.
• The case emphasises the importance of employers having effective controls to eliminate sexual harassment. At a minimum these would include a sexual harassment policy, training and reporting pathways.
• The new positive duty under the SDA, which requires employers to take "reasonable and proportionate measures" to eliminate sexual harassment and discrimination in the workplace as far as possible means all employers are legally obliged to take steps to implement effective controls against sexual harassment.
• A range of conduct that may not be overtly sexual in nature, when taken in concert, may be found to constitute sexual harassment.

Background to Taylor v August and Pemberton Pty Ltd [2023] FCA 1313

Ms Fiona Taylor commenced proceedings against Simon Grew for unlawful sexual harassment under the SDA. Ms Taylor complained she was sexually harassed by Mr Drew over a period of about 22 months while she was employed by his company. Ms Taylor also complained she suffered victimisation after making a complaint to the Australian Human Rights Commission (AHRC).

Ms Taylor alleged that Mr Grew contravened s28B(2) of the SDA by engaging in various acts constituting unwelcome conduct of a sexual nature in relation to her and/or making unwelcome sexual advances to her. The alleged acts fall into several categories:

• provision of numerous gifts (Ms Taylor submitted she had received 19 gifts including an emerald and diamond ring and a six stone diamond necklace);
• making certain inappropriate comments including "you have a really nice body", "I like petite curvy brunettes", "you have a beautiful body" and "you have bedroom eyes";
• slapping her buttocks as she walked through a doorway; and
• making "declarations of feelings" including in January 2020 when Mr Grew said "I've developed feelings for you. I can't hold it inside any longer...I think you're the most beautiful woman I've ever seen...We can run the business together or if you want to start your own business, that's something I can help you with".

Despite Ms Taylor expressly communicating 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?"

Ms Taylor submitted a complaint to the AHRC alleging that Mr Grew had sexually harassed her. Following this complaint, Ms Taylor asserted that Mr Grew demanded she return various items that had been gifted to her, accused her of misconduct and threatened to report her to the police if she did not return the gifts.

Overview of the decision

Which, if any, of the alleged conduct was of a sexual nature and/or a sexual advance and unwelcome?

The Federal Court's decision contains a helpful exploration of the elements of the definition of sexual harassment as it identifies whether each of Mr Grew's actions constitutes sexual harassment as defined under section 28A of the SDA. Importantly, Justice Katzmann emphasised the importance of context when assessing whether conduct is of a sexual nature:

[51] Moreover “conduct of a sexual nature” may be explicit or implicit, as the Court of Appeal recognised in Vitality Works. And conduct which, when considered in isolation, appears to have no sexual connotation may still amount to “conduct of a sexual nature” or, for that matter, a “sexual advance”. The conduct in question must always be assessed in its context.

Justice Katzmann at [52] endorsed the observations of McCallum JA in Vitality Works¹ and applied those comments to section 28A of the SDA, in particular, when McCallum JA said at [125]:

The sexualisation of women in the workplace often isn’t [explicit]. Innuendo, insinuation, implication, overtone, undertone, horseplay, a hint, a wink or a nod; these are all devices capable of being deployed to sexualise conduct in ways that may be unwelcome ... The suggestion that conduct cannot amount to sexual harassment unless it is sexually explicit overlooks the infinite subtlety of human interaction and the historical forces that have shaped the subordinate place of women in the workplace for centuries.

Justice Katzmann considered all of the alleged behaviour and concluded that Mr Grew sexually harassed Ms Taylor when:

• he slapped her on the bottom in July 2019;
• he declared his feelings for her in January 2020, implicitly inviting her to enter into an intimate personal relationship with him when she neither solicited nor welcomed it;
• he gave Ms Taylor gifts after his confession of feelings in January 2020, including a gold signet ring and gold earrings; and
• he revived the subject in June 2020 despite knowing Ms Taylor was not interested in such a relationship.

In so doing, Mr Grew contravened s 28B(2) of the SDA. Mr Grew was also found to be in contravention of s 94 for his conduct which amounted to victimisation following the complaint made by Ms Taylor to the AHRC.

Ms Taylor was awarded $140,000 in general damages for the sexual harassment and $40,000 for the victimisation. The court also awarded $15,000 in aggravated damages, $3,000 for future out-of-pocket expenses, $37,685 for lost earnings plus $8,599 in lost superannuation, plus interest.

For information on employers' obligations to address sexual harassment at work, explore our Respect@Work hub or contact a member of our experienced employment and workplace team.

¹ Vitality Works Australia Pty Ltd v Yelda (no 2) [2021] NSWCA 147