Employers beware of vicarious liability for discrimination and harassment

Discrimination and harassment continues to be a serious workplace issue. Yet many employers are unaware that they may be legally responsible for this conduct on the part of their workers and could be liable to court penalties.

For example, the Administrative Decisions Tribunal recently found an employer “vicariously liable” for the sex discrimination and sexual harassment by its assistant manager towards a young female co-worker at a KFC outlet.

The Tribunal found that the assistant manager had sexually harassed the complainant by showing her pornographic images and making “suggestive” comments.

The Tribunal found that the employer had not taken “all reasonable steps” to prevent the conduct from occurring. Although the employer had provided some training to staff to prevent such conduct, the Tribunal found that this was insufficient to detect the acts complained of and to ensure that management could respond proactively.

The Tribunal awarded the complainant $15,000 damages payable by the former employer.

The former employer lost its appeal against this decision.

So what does “vicarious liability” mean in this context?

Generally “vicarious liability” means that employers are legally responsible for workers’ conduct in the course of their employment.

Employers’ legal responsibility extends to workers’ conduct not only in their regular work environment, but also at work-related events such as seminars, conferences, work functions, Christmas parties, business or field trips.

Under current Federal and State anti-discrimination legislation, employers are vicariously liable for workers’ breaches of these laws which occur in connection with their employment; unless “all reasonable steps” have been taken to prevent this conduct from occurring.

Employers may be vicariously liable for the conduct of a range of individuals such as:

  • employees or groups of employees
  • job applicants
  • company directors
  • workplace participants (where two people work on the same premises, but have different employers)
  • agents or contractors
  • a partner within a firm who harasses another partner

These provisions do not diminish the individual’s liability for their own discriminatory or harassing behaviour in connection with their employment.

In some cases both the employer, who has not taken all reasonable steps to prevent the discrimination and harassment from occurring, and the individual, who committed the discrimination or harassment, will be held jointly liable for the behaviour.

In order to avoid liability, employers must demonstrate that they have taken “all reasonable steps” to prevent discrimination and harassment in the workplace. This will depend on the facts of each case. The Australian Human Rights Commission recommends the following steps as a guide:

  • Preparing and promoting a written policy that prohibits workplace discrimination and harassment and that is supported and reinforced by all levels of management
  • Training staff to appropriately prevent, identify and respond to workplace discrimination and harassment
  • Establishing an effective internal complaints procedure
  • Appointing trained harassment contact officers
  • Treating all complaints seriously and investigating them promptly
  • Ensuring that appropriate action is taken to address and resolve complaints
  • Monitoring the workplace environment and culture, such as holding staff surveys or reviewing recruitment practices
  • Providing employees who have harassed other staff members with information and training to ensure the discrimination or harassment does not occur again
  • Providing employees who have been discriminated against or harassed with access to counselling services or employee assistance programs (costs should be fully borne by the employer)
  • Ensuring that the workplace environment or culture is not “sexually or racially permeated or hostile”. Examples include workplaces where pornographic material is displayed and/or crude conversations or innuendo and offensive jokes are part of the culture. Workers are entitled to complain about a “hostile” working environment even if the material or employee conduct in question is not specifically targeted at them.

For further information see the Australian Human Rights Commission website