Monday, 20 October 2014

Changing Times: Sex discrimination damages on the rise as the 'old range' debunked by 'community standards'

The Full Court of the Federal Court has blown the lid off what key commentators have been calling the discrimination damages time capsule. In Richardson v Oracle an award at trial of $18,000 for pain and suffering caused by sexual harassment at IT company, Oracle, was increased to $100,000 on appeal. The decision has some lawyers quoting Bob Dylan's 'the time's they are a-changin'. So, what happened, and why the revolutionary tenor?

The Full Court did two main things - both are critical for public sector employers who could be liable for unlawful conduct by their employees.

1. 'Unofficial range' rejected

Justice Kenny (with whom Besanko and Perram JJ agreed) held that the $18,000 awarded by the trial Judge was 'manifestly inadequate' compensation for Ms Richardson's pain and suffering. In doing so, the Court rejected a long-standing unofficial range of between $12,000 and $20,000 within which damages for all but the most extreme sexual harassment injuries have previously been awarded.

While her Honour accepted that the trial Judge fixed a sum squarely 'within the range', this was not, as her Honour put it, 'the end of the matter'. The Court identified a 'substantial disparity' between Ms Richardson's compensation and the amounts now awarded outside the sex discrimination space to victims of workplace bullying and harassment (especially in Victoria). After highlighting the dangers of relying too heavily on an unofficial range at all, the Court rejected it. The range had, her Honour stated, 'remained unchanged' for over a decade 'notwithstanding that the community has generally gained a deeper appreciation of the experience of hurt and humiliation that victims of sexual harassment experience'.

Once the range was cast aside, the Court assessed Ms Richardson's loss by reference to 'general standards prevailing in the community' regarding the value of her pain and suffering: In this case, the amount was determined to be $100,000.

2. Damages awarded for Ms Richardson's 'choice to leave'

Perram and Besanko JJ (with whom Kenny J agreed) also overturned the trial Judge's finding that Oracle was not liable for Ms Richardson's financial loss upon leaving the company. Although she was not constructively dismissed or demoted, Oracle was still liable for Ms Richardson's loss. The clincher here was causation. Even though Oracle had not 'forced her out', it was liable once she 'chose' to leave because this 'choice' was itself caused by the sexual harassment. Such an analysis is not entirely new, but in Richardson the Court applied these principles to what may be a very common series of events where sexual harassment is proven.


So what does this mean for the public sector? In short, it seems the times are a changin'.

This decision confirms that, as always, employers must take sexual harassment in the workplace seriously. A failure to do so can now amount to higher damages than traditionally awarded against employers who are held to be vicariously liable for an employee's discriminatory conduct. The impact of the sexual harassment in this case, although significant, was not considered to be traumatic. Nevertheless, Ms Richardson was awarded $100,000 in recognition that 'community standards' and expectation have altered.

It is also important to bear in mind that these principles could be applied more generally in cases involving unlawful discrimination on the basis of other attributes, such as disability, race or age discrimination. The decision, therefore, has significant implications beyond cases involving sexual harassment.

Richardson is a timely reminder to review your agency's anti-discrimination policies and provide appropriate training to ensure that all employees are aware of the law and their obligations under it.
For further information about the case, advice on your agency’s anti-discrimination policies or how to keep up with the law involving anti- discrimination, please contact:

Vicki Moulatsiotis
Principal Solicitor
t 9032 3012

Katherine Francis
Senior Solicitor
t 9032 3014

Hollie Kerwin
t 8684 0241

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