Richardson v Oracle Corporation Australia Pty Ltd [2014] FCAFC 82

27 August 2014
In a landmark decision, the Full Bench of the Federal Court of Australia has ordered an employer to pay $100,000 for pain and suffering and loss of enjoyment of life to an employee who was sexually harassed at work.

The decision reflects a significant increase in the amount of compensation historically awarded to victims of workplace sexual harassment.  It also signals a turning point by recognising that todays community standards and values demand higher compensation for victims of workplace sexual harassment.

Facts

Ms Richardson, the Applicant, and Mr Tucker, were both employed as sales representatives of Oracle, a technology company and worked closely together on a bidteam preparing tender proposals.   Ms Richardsons claim arose from Mr Tuckers conduct towards Ms Richardson whilst working on a particular project.  The conduct occurred over a number of months and included repeated and numerous comments, slurs and sexual advances by Mr Tucker, some of which occurred in front of clients and colleagues.  The conduct included the following comments:

  • Gosh, Rebecca, you and I fight so much ... I think we must have been married in our last life;
  • “So, Rebecca, how do you think our marriage was? I bet the sex was hot”;
  • “Gosh, it’s a good thing you didn’t come out [to a work function after party] because I think if I were drinking with you I would wind up in the corner with my arms around you kissing you”;
  • “Oh, you know you love me, you know you want me”;
  • “We should go away for a dirty weekend sometime”;
  • “I love your legs in that skirt. I’m going to be thinking about them wrapped around me all day long”;
  •  In a meeting with male clients, in which Ms Richardson was the only women, Mr Tucker was asked how big his boat was.  In response he said words to the effect of “It has got a cabin that’s just big enough for you and mein reference to Ms Richardson.

As a result of Mr Tuckers conduct Ms Richardsons health suffered, she was diagnosed with a chronic adjustment disorder with anxiety and depression and experienced problems in her sexual relationship with her then partner. 

Ms Richardson complained to Oracle about Mr Tuckers conduct and Oracle conducted an investigation.  Throughout the investigation Ms Richardson continued to work with Mr Tucker.  Mr Tucker was issued with a first and final warning, apologised to Ms Richardson and was permitted to keep his position.  Ms Richardson subsequently resigned from her position with Oracle, as a result of Mr Tucker's conduct and Oracles handling of the investigation, and obtained a position with another company for a lesser salary.

First Decision

In the decision before the trial judge, the Court found that Ms Richardson had been sexually harassed by Mr Tucker and that, as the employer, Oracle was responsible for the conduct of Mr Tucker.  Oracle was ordered to pay $18,000 by way of pain and suffering to Ms Richardson.  Ms Richardsons claim for economic loss, being the difference in salary between the roles, was rejected.

Appeal

Ms Richardson appealed the decision on multiple grounds, including that the compensation was manifestly inadequate; that the Court had made a mistake in not finding that Mr Tuckers conduct had affected Ms Richardsons sexual relationship with her partner and that she should have been awarded compensation for economic loss.  A number of Ms Richardsons other grounds were dismissed by the Full Court.

The Full Court found that:

  • Ms Richardson should have been compensated for the damage the conduct caused to her sexual relationship with her then partner;
  • The traditional range for compensation for non-economic loss for victims of sexual harassment of $12,000 to $20,000 did not reflect prevailing community standards;
  • That to ascertain prevailing community standards the Court should look at compensation awarded in personal injury claims.  In those cases, the Courts had placed significant emphasis on the pain and suffering and loss of enjoyment of life suffered by the victim; 
  • $18,000 was manifestly inadequate having regard to prevailing community standards the impact that the sexual harassment had had on Ms Richardsons health and relationship;
  • That although the effect of Mr Tuckers conduct on Ms Richardson was not of the worst seen in personal injury cases, the psychological impact was not insignificant. Having regard to the psychological impact and the impact on Ms Richardsons relationship, the Full Court assessed compensation for pain and suffering at $100,000.
  • In addition, the Full Court awarded Ms Richardson $30,000 for economic loss.  The Full Court found that although Ms Richardson was not forced to leave Oracle, there was a sufficient link between Mr Tuckers conduct and Oracles handling of the matter and Ms Richardson leaving her employment with Oracle to justify an order for economic loss.  

Significance of Decision

For many women, and men, who are victims of sexual harassment, there can be a range of factors as to why they choose not to pursue a claim of sexual harassment.  A pivotal reason is often the limited amount of compensation that courts have traditionally awarded to victims of sexual harassment.  This decision will encourage victims of sexual harassment to hold their harasser and employer to account.  It suggests that where the unlawful conduct is proven, the employee will be compensated in a manner that more adequately reflects the long lasting and devastating impact that sexual harassment can have. 

Determining appropriate compensation will continue to depend on a case-by-case assessment of the seriousness of the conduct and the effect on the victim.  The Full Court found that Ms Richardsons case, although serious, was not the worst case of sexual harassment to come before the Courts.  For example, Ms Richardsons health had improved she had been able to obtain another position and she had also not been physically assaulted.   The award of $100,000 compensation may be exceeded in certain cases. 

It also leaves it open for employees who resign and obtain a new job, to bring claims against their former employers for compensation, provided that there is a sufficient link between the sexual harassment and the employees departure from employment. The decision also acknowledges that the impact of sexual harassment can permeate not only an individuals working life but also their relationships with friends and family.

Although no amount of money will fully compensate an employee who is sexually harassed, this long overdue decision signals a step in the right direction.  As a result we may see an increase in sexual harassment claims being pursued in Court or settled through confidential agreements.  Employers should also take it as a strong warning as to what will happen if they fail to eradicate a sexually hostile workplace or turn a blind eye to known sexual harassers. 

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