The Full Court of the Federal Court has upheld an earlier award
of $466,000 in damages for the unlawful discrimination of a
terminated employee, one of the highest payouts ordered for a case
of this type.
The decision
At first instance the employer, Employment Services Australia
Pty Ltd (ESA), was found to have discriminated
against Ms Poniatowska by terminating her employment following
sexual harassment complaints made by her.
Justice Mansfield found the majority of incidents alleged by Ms
Poniatowska had in fact taken place, and that ESA had failed to
satisfactorily investigate those complaints or take any sincere
measures to discipline the individuals involved. The court found
that ESA had treated the employee as "a problem to be dealt
with" and dismissed her for poor work performance, when in
reality the termination was based on Ms Poniatowska's
"sensitivity" to the conduct in question (ie, the sexual
harassment).
In assessing whether unlawful discrimination had occurred, his
Honour was required by the legislation to consider how a male
employee in the same situation would have been treated, and
ultimately found that the same approach would not have been taken
by ESA had a male employee been sexually harassed and
complained.
Ms Poniatowska was awarded a total of $466,000 in compensation,
including sums for pain and suffering, lost earning capacity,
interest and medical expenses (relating to the depression and
anxiety she had developed due to the harassment).
On appeal, ESA argued that it should not be required to pay the
amount, on the basis that it was not liable for the actions of its
employee who had sent offensive emails because he had not done so
in connection with his employment at ESA. This submission
was rejected by the Full Court because Justice Mansfield had not
based his conclusion of sex discrimination by ESA on the basis of
its vicarious liability for that employee.
As to the amount of compensation awarded, ESA sought to have the
matter remitted back to the single judge so that it could lead
evidence as to the effect of Ms Poniatowska's subsequent conviction
for social security fraud on her employment (and earning)
potential. ESA also submitted that Justice Mansfield had failed to
take into account certain facts and material relating to the
history of the allegation, namely the apology offered to and
accepted by Ms Poniatowska, when assessing damages.
While the majority of the Full Court accepted that the
conviction would be likely to affect Ms Poniatowska's prospects of
obtaining other employment, it nevertheless concluded that the
cause of her inability to work was the detrimental effect of ESA's
actions, and those of its employees. It further stated that, in
assessing damages for pain and suffering, Justice Mansfield was not
required to specifically account for the apology, and in any event
ESA had not demonstrated any failure by his Honour to take all
relevant matters into account.
The appeal was dismissed in its entirety and ESA was ordered to
pay 90% of Ms Poniatowska's costs.
Conclusion
It is clear that courts are willing to award significant damages
to employees who are discriminated and/or sexually harassed,
especially where the employer fails to properly investigate or deal
with complaints.
Employers should:
- ensure they have appropriate policies in place to deal with and
discourage sexual harassment;
- ensure employees are aware of the employer's policies and their
obligations under them;
- train managers to address complaints properly; and
- discipline employees who engage in inappropriate sexual
conduct.
Victorian employers should also note that, in assessing whether
discrimination is unlawful under state anti-discrimination
legislation, from 1 August 2011 a comparison between the victim and
an individual without the protected attribute in the same or
similar circumstances will no longer be required. Instead, simply
demonstrating that the person was treated unfavourably
because of that attribute (such as pregnancy, industrial
activity, sex, race etc) will suffice.