In recent years we have seen an increase in the amount of damages typically awarded by courts and tribunals in employment related litigation. We discuss this trend in our recent video.
A trend towards increasing damages
If we go back to 2014 and look at the case of Richardson v Oracle (1) we saw that for a pattern of sexual harassment over a period of six months, the Full Federal Court on appeal increased the amount of damages from around $18,000 to $130,000 to take into account pain and suffering, loss of enjoyment of life and future economic loss. The court said that the amount of damages awarded at first instance was no longer in line with ‘community standards’ and was ‘manifestly inadequate’.
This trend has continued since and we have seen cases in an employment situation where amounts awarded have reached even greater heights. For example:
- In November 2014 an employee was awarded $733,723 in damages after a finding that her manager systematically sexually harassed, intimidated and bullied her, rejecting the managers defence that the employee was lying and that the conduct did not occur (2).
- In December 2015 a company was ordered to pay $1,360,000 in damages and compensation after a finding that an employee suffered psychiatric injuries due to the bullying, abuse and sexual harassment levelled at her by fellow employees and subcontractors and, as a consequence, was unlikely to ever work again (3).
- In July 2014 a financial controller whose employment was terminated after accusations of approving invoices from a company linked to a relative received more than $1,000,000 after a ruling that she was entitled to ten months’ notice of the termination of her employment and long service leave based on her full salary package including bonuses (4).
- More recently, in August 2016, an employee who suffered psychiatric trauma after being sexually assaulted at work by a client has received $1,500,000 as the assault triggered post-traumatic stress. The employer was found to have breached its duty of care by failing to provide a safe system of work for the employee (5).
The importance of a having an excellent policy statement
Of course there are other cases where the employer has mounted a successful defence and even more cases where claims have been settled before going to hearing. However a trend towards greater damages overall is alarming. Quite apart from the actual dollar amounts these cases create potential reputational damage for the employer. It may not be easy to explain why a large sum of money was awarded to one of your employees. So, more than ever, it is time to look again at prevention of these incidents in your workplace.
One of your key tools in preventing incidents is your bullying and harassment policy. Template policies are easily found but what the courts will look at when examining an incident is whether your policy was merely put in place to tick the ‘we have a policy’ box or whether it provided a meaningful and helpful guide to managing and resolving incidents.
Thomson Geer’s Health Check of your policy statement
To assist with your policy review Thomson Geer has decided to provide its clients with a free health check of their policy to prevent and manage bullying and harassment in their workplaces. We do this by examining the policy against a mock factual incident of bullying and harassment and then examine how your policy might perform against that incident. This is like doing a fire drill. There does not seem to be much to be gained by waiting for an actual incident to occur in your workplace before trialling your policy. The results of our review are of course confidential. There doesn’t seem to be a down side to having your policy reviewed in this fashion.
(1) Richardson v Oracle Corporation Australia Pty Ltd  FCAFC 82 (15 July 2014).
(2) Trolan v WD Gelle Insurance and Finance Brokers Pty Ltd  NSWDC 185 (4 November 2014).
(3) Kate Mathews v Winslow Constructions (Vic) Pty Ltd  VSC 728 (17 December 2015).
(4) Susanna Ma v Expeditors International Pty Limited  NSWSC 859 (30 June 2014).
(5) B v Brisbane Youth Service Inc  QSC 163 (28 July 2016)