The stakes are risingIn the world of anti-discrimination law awards of money against employers for psychiatric injury or illness caused by sexual harassment by one of their employees have been rare and low, typically in the range of $12,000 to $20,000. Similarly, the anti-bullying jurisdiction of the Fair Work Commission has seen limited orders made to prevent further bullying where claims have been made, and compensation is not available as a remedy for bullying behavior.

But things are changing, especially in the area of sexual harassment where awards of damages for psychiatric illness are increasing. This reflects change in societal attitude towards this type of conduct that has (finally) started to be reflected in judicial pronouncements.

The spectrum of mental harm that can be experienced by victims of sexual harassment or bullying covers depression, anxiety and post-traumatic stress disorder (PTSD) any of which can be debilitating for a significant period.

Who is at risk?

Some of the common features of cases dealing with sexual harassment and bullying are:

  • Excessive job demands, inadequate resources, lack of clarity regarding role or degree of autonomy
  • Toxic workplace cultures where employees ‘learn’ from the top that bullying and harassment is acceptable workplace conduct, known as social or emotional contagion, this can be conscious or unconscious
  • Entrapment of a person in a job due to fear of reprisal (such as failure to provide support for alternative employment) from a complaint
  • Unconscious bias
  • Mismanagement of change process, that is, not in a transparent, precise and timely way
  • Existing interpersonal conflicts and a lack of effective internal conflict resolution mechanisms and training
  • Individual psycho-pathologies that do not support team work or group cohesion. In a society where it has been asserted up to 10% of the population suffer from antisocial personality disorder, borderline personality disorder, histrionic personality disorder or narcissistic personality disorder it would seem that most, if not all, workplaces are exposed to legal risk of claims regarding bullying or harassment arising from this factor.

Where senior management communicates effectively that certain conduct is not acceptable, and role model behavior consistent with this message, the conduct will be less likely to occur.

Legal avenues

Often misunderstood in this area, there are a number of avenues that can be followed in seeking compensation or other redress for harm arising from sexual harassment or bullying, including:

  • State and Federal anti-discrimination law including anti sexual harassment legislation
  • Anti-bullying provisions in the Fair Work legislation
  • Unfair dismissal provisions of the Fair Work legislation
  • General protections/adverse action provisions of the Fair Work legislation
  • Workplace health and safety legislation
  • Workers’ compensation schemes
  • Civil claims including breach of contract
  • Criminal claims.

Sexual harassment

Criminal Law Prosecution

WHS Prosecution

FWC Claim

– AB
-UD
-GP

Civil Claim

-Tort
– Breach of contract

Worker’s Compensation
Claim

Anti-Discrimination Claim

– State
– Federal

Bullying

Recent decisions

Since 2014 judicial decisions have demonstrated a willingness to award significantly higher amounts in damages to victims of sexual harassment and bullying. This reflects our society’s increased sensitivity to mental illness, greater recognition of the equality between men and women and a reduction in the negative stigma associated with workplace complaints. They also expressly recognise that this type of conduct results in compensable loss of enjoyment of life and psychological distress.

The recent decisions where employers have been required to pay significant sums to employees who have suffered injury due to bullying and/or harassment in their workplace include:

Richardson v Oracle where Ms Jane Richardson was awarded $130,000 for general damages and economic loss due to sexual harassment by her co-worker in the form of multiple humiliating and sexually explicit comments and sexual advances. The injuries suffered by Ms Richardson included changes in her demeanor and physical condition and a decline in sexual intimacy between her and her husband.

Collins v Smith where Ms Amanda Collins was awarded $332,280 for general damages, lost earnings, future earnings and expenses due to prolonged, persistent, unwelcome sexual conduct including touching by Ms Collins’ only manager in the workplace. The conduct resulted in Ms Collins suffering PTSD, major depression and anxiety. The conduct also negatively affected her relationship with her husband and led her to resign from her employment.

Matthews v Winslow where Ms Kate Matthews was awarded $1,360,027 for psychiatric and physical injury and loss of past and future earnings due to significant abuse, bullying and sexual harassment by other employees of and contractors to her employer which included inappropriate conduct by her direct supervisor. Ms Matthews suffered a major depressive disorder, significant, chronic PTSD and Bipolar disorder. Ms Matthews also suffered a jaw injury from grinding her teeth due to her distress.

Eaton v Tricare where Robyn Eaton was awarded $436,000 in damages including on the basis that Ms Eaton would likely never be able to work again due to her injuries caused by bullying at work by her manager. Ms Eaton had a pre-existing anxiety disorder that was exacerbated by the workplace conduct resulting in a major depressive disorder, prominent anxiety and PTSD.

STU v JKL (Qld) where an unnamed applicant was awarded $313,000 in general damages and past and future loss of earnings due to sexual harassment and assault by a contractor to the employer which resulted in the woman suffering PTSD and another depressive illness. She also developed a problem with alcohol abuse, anxiety, difficulty sleeping, an inability to drive and a loss of personal interest.

There are also recent cases where employers have been held criminally liable for inappropriate workplace conduct including bullying and sexual harassment.

Driver of large awards

The main driver of these awards of significant damages is a recognition that injury, illness and loss of enjoyment of life due to sexual harassment and bullying should be compensated in the same way as in personal injury cases where courts have long been awarding six and seven figure amounts for psychological injury. Having said that, in each of the cases we have described the applicants produced significant expert and other evidence of their loss including very personal details of their lives which, we suggest, many in similar situations would be unwilling to reveal.

Strategies for employers

So, how to reduce your exposure, as an employer, for vicarious acts of your employees that constitute sexual harassment or bullying? Our suggestions include:

  • Consider pre-employment screening that can reveal relevant psycho- pathologies in job applicants. However, this should be done very carefully and with reference to the inherent requirements of the position being recruited for to avoid potential claims by job applicants of discrimination or otherwise
  • Implement and regularly update relevant policies, ensure they are accessible to and understood by all employees
  • Undertake relevant training and education programs, face to face is always best
  • Have a clear complaints mechanism and best practice investigation procedures
  • Ensure appropriate conduct is role-modelled at senior levels within the organisation.

Conclusion

In light of the changing landscape and in the interests of having a healthy and safe workplace, there needs to be a complete shift in the collective consciousness of the private sector and government organisations in relation to stamping out bullying and sexual harassment in the workplace.

Managing the risk of psychological injury requires a strategic decision to invest in the corporate culture with a view to keeping employees safe, reducing staff turnover and becoming an employer of choice. In the context of the recent large award cases, employers should be perceiving bullies and sexual predators as major financial and reputational liabilities to a business and acting and investing in accordance with that conviction.