The Court of Appeal’s decision to uphold the non-explicit sexual harassment of an employee shows that all forms of harassment can be penalised.

The NSW Court of Appeal has recently upheld the case of an employee, who claimed sexual harassment against her employer and a contractor over her depiction in a work health and safety poster.

The poster, as HRM earlier reported, showed a picture of the employee with her arms outstretched, gesturing towards the words “Feel great –” and, in even bigger letters, “Lubricate!”. The employee complained about the poster after it was displayed at the company’s various workplaces, and after being contacted about it by her (mostly male) colleagues.

The employer and the contractor – an occupational health service – both apologised and removed the poster, but the employee still brought actions alleging sexual harassment and sex discrimination.

Speaking to HRM, a spokesperson on behalf of the contractor said: “The template safety poster in question had been used by our client in numerous workplaces without incident or complaint.

“In this instance the poster was prepared by an all-female team who had no intention of using the physiological concept of joint lubrication in any other way than to convey the importance of moving the body – hence [the employee] (fully clothed & wearing a hard hat) stretching upward. Our client is saddened that its important message of workplace safety has been misinterpreted following a crass joke by her workmate.”

The NSW Civil and Administrative Tribunal, both at first instance and on appeal, heard submissions from the employer and contractor that intention was not to sexually harass the employee, and that the term ‘lubricate’ in the poster was meant to refer to “the generation of synovial fluid upon movement of the joints by [the employee] performing a stretching exercise.” 

However, the tribunal agreed that the poster was unwelcome conduct of a sexual nature, which could be anticipated to offend or humiliate, emphasising that whether sexual conduct was unwelcome was to be assessed subjectively.

The contractor appealed to the NSW Court of Appeal, but was unsuccessful, with the court unanimously upholding the tribunal’s findings, and making some strong statements on the way sexual harassment in the workplace has developed. 

These comments from the court, which recognise that sexual harassment can be subtle and indefinite just as it can be gross and intrepid, are welcome, in the context of soon to be amendments to workplace and discrimination legislation.  

With the Discrimination and Fair Work (Respect at Work) Amendment Bill 2021 currently before the senate, employers will need to ensure they are suitably equipped to identify all forms of sexual harassment in the workplace, as well as address it adequately.

The appeal in a nutshell

The court rejected the contractor’s attempts to avoid responsibility for the conduct, reinforcing that the contractor and employer (who did not join the appeal) had been jointly responsible for the poster.

The court considered that the design, publication, display and distribution of the poster was “done by [the contractor] with the approval of [the employer]”.  Just because [they were] contracted to provide work health and safety training and services to the employer, did not mean they could avoid liability for the poster, the court ruled.  

The court emphasised that whether conduct was unwelcome was to be assessed subjectively by the person being harassed, and that a harasser couldn’t justify their actions by claiming their conduct was not ‘sexually explicit’.

Justice Lucy McCallum in particular criticised the suggestion that a woman feeling “great” because she lubricates couldn’t be sexual harassment because the message was not explicitly sexual, saying “the sexualisation of women in the workplace often isn’t”. 

Justice McCallum considered that all kinds of behaviour that was less explicit could amount to sexual harassment, including “innuendo, insinuation, implication, overtone, undertone, horseplay, a hint, a wink or a nod”.

Large damage orders

The contractor’s appeal was unanimously rejected, and the damages orders of the tribunal were upheld.

In a separate decision, the tribunal decided that the employee had suffered psychological injury, and that following her resignation, the employer and contractor should be responsible for her inability to earn wages.  

The tribunal would have ordered almost $320,000 in damages against the two companies, but was capped by statute such that the employee was awarded $200,000 for her ordeal.

The tribunal also agreed that the contractor’s apology, which was full of “weasel words” and attempts to avoid responsibility, should attract aggravated damages of $5,000.  The contractor was also ordered to pay the employee’s costs of the recent appeal.

Key lessons for employers

The court was willing to recognise joint responsibility of an employer and contractor. Even though the poster was actually put up in the company’s workplaces, the contractor was given authority to design it, and directed its placement after printing.  

The ‘joint responsibility’ finding of the court shows that employers need to broaden their scope when considering sexual harassment risk.  As employment moves away from “traditional models”, so too will the relational connection required to found a sexual harassment claim broaden.  

HR managers will need to consider the risk posed by agents and other entities when assessing the risk of sexual harassment in their workplace.

The ruling of the Court of Appeal shows that as society’s understanding of sexual harassment in the workplace evolves, so too does the range of conduct and behaviour which the courts will penalise.  

HR managers need to be aware of, and have systems in place to identify and respond to, all forms of sexual harassment in the workplace, whether or not that conduct is intended as a joke, or is seemingly innocuous.  

As this case demonstrates, employers could be on the line for significant damage awards for failing to take action against conduct which is unwelcome, whether or not it was of an explicitly sexual nature.

HR Managers should also keep in mind that this shift applies just as much to the conduct of employers as it does to employees; this case is an important example of sexual harassment not arising from conduct of an employee, but from the conduct of the employer.

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