Avoiding Vicarious Liability in Sexual Harassment Actions

In Brief - A superior court recently found that an employer was not vicariously liable for the actions of an armed security guard employee who drew their weapon on a colleague, causing sustained psychological injuries. 

In the courts exhaustive analysis of employer vicarious liability, the Judge ultimately found that the offender's actions were 'not a 'natural extension' of his duties, but rather, a gratuitous act unconnected with [his] employment'. 

In Her Honour's reasoning, weight was attributed to the employer's policies and procedures at both the induction stage and throughout the employment lifecycle. She accepted that the employer had a culture of gun safety that was 'conveyed to its employees from the time they commenced working as armed security guards'.

(See decision of Garrett v Victorian WorkCover Authority [2022] VSC 623 (21 October 2022).

This is a timely reminder for employers to:

1. carry out regular risk assessments to identify potential hazards;
2. develop comprehensive policies to mitigate those risks; and 
3. conduct regular training to ensure employees are well-informed.

Vicarious Liability Test

Employers are generally vicariously liable for the foreseeable wrongful acts or omissions of employees acting 'in the course of their employment'. 

For example, the 'relevant approach' considered by the courts for establishing vicarious liability includes where the employment itself gives 'authority, power, trust, control' over another and it is therefore foreseeable that that power might be misused, the employer may be found vicariously liable (See Prince Alfred College Incorporated v ADC [2016] HCA 37 at 80). 

Where the common law failed to protect workers, contractors and others from the harmful and foreseeable acts of co-workers, lawmakers have long been working to address the risk through legislation. South Australia was the first Australian jurisdiction to enact sex discrimination legislation in 1975/76. OHS/WHS legislation was first introduced in 1978. 

While these legislative attempts to encourage safe conduct have succeeded in giving us a language to speak about safety, recent reports indicate that there is still work to be done, particularly around sex discrimination in work. 

Sexual Harassment and Vicarious Liability

Since Sex Discrimination Minister Kate Jenkins' Respect@Work Report was released, several amendment bills have been introduced to Parliament to implement the report's recommendations to 'eliminate' sex discrimination, harassment and victimisation in the workplace 'as far as possible'.

On 27 October 2022 the Federal Government released the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Bill 2022, proposing to create a positive obligation on employers to prevent sexual harassment by prohibiting this conduct 'in connection with work'. The Explanatory Memorandum provides that the ban will 'apply broadly to protect workers, prospective workers and persons conducting businesses or undertakings'.

The Bill prescribes that persons may be liable for contravening acts performed by their employees or agents (at section 527E), stating: 

1. if an employee or agent of a person (the principal) does, in connection with the employment of the employee or with the duties of the agent as an agent, an act that contravenes subsection 527D(1) [ie that a person must not sexually harass another person in connection with work] this Act applies in relation to the principal (subject to 30 subsection (2)) as if the principal had also done the act.
2. subsection (1) does not apply if the principal proves that the principal took all reasonable steps to prevent the employee or agent from doing acts that would contravene subsection 527D(1).

The Bill passed the Lower House on 10 November with 34 pages of amendments to secure its passage through the Senate. These changes included the prohibition of sexual harassment in connection with work, which were designed to preserve the concurrent operation of existing state or territory laws already dealing with sexual harassment, including those that provide an avenue for victims to apply for a stop-sexual-harassment order. 

With the enactment of this legislation employers will be responsible for, and must produce evidence, if challenged, of all the reasonable steps to prevent and respond to workplace sexual harassment. 

In view of this proposal, employers, managers, directors and boards should be taking steps in the holiday break to review contracts, policies, induction and training in respect of their expectations regarding workplace conduct and making the consequences of breaching those expectations clear. 

It might be prudent to conduct audits of the culture to assess attitudes around sexual harassment. Such audits will provide useful information to guide reasonable steps in response. 

How employers can address the risk of sexual harassment in the workplace

The new threshold attached to preventing sexual harassment places further responsibility on employers to prevent harassment. 

Now is the time for employers to think seriously about the addressing the risk of sexual harassment in the workplace by:  

1. reviewing your sexual harassment and complaints handling policies; 
2. conducting regular training sessions to reinforce expectations; 
3. developing positive workplace culture by leading from the top;
4. conducting regular audits and reviews to assess your organisation's attitude to issues including sexual harassment and sex discrimination; 
5. making clear expectations ahead of the party season, ahead of work events, around work travel and on-line interactions. 

For further tips about managing the risk of harassment ahead of the holiday season, you can access our recent webinar How to Safely Sleigh your festive event in 2022.