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Case Law: Employer vicariously liable, ordered
to pay damages of $733,723
Monday, 13th April, 2015, by Loran McDougall
In today's Workplace Bulletin:
- Case Law: Employer vicariously liable following verbal complaint
Dear Reader,
As you may recall from a previous bulletin, vicarious liability is the responsibility that you have for the actions of your employees towards others during work hours or in other work-related circumstances.
If the employee’s actions are found to constitute unlawful discrimination, harassment or bullying, you may be held responsible along with the employee.
One of the things you must prove to defend against vicarious liability is that you took reasonable steps to prevent the conduct. This includes taking steps to stop any unlawful conduct that you are aware of.
A recent case indicates that you should not wait for a formal or written complaint to take action. If you are made aware through a verbal discussion that one of your employees is engaging in unlawful conduct, this triggers your duty to take reasonable steps to stop the behaviour.
Read on for the details.
Until next time,
Loran McDougall
Editor
Workplace Bulletin
Editor
Workplace Bulletin
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Case Law: Employer vicariously liable following
verbal complaint
by Charles Power
Editor-in-Chief, Employment Law Practical Handbook
Editor-in-Chief, Employment Law Practical Handbook
In Trolan v WD Gelle Insurance and Finance Brokers (2014), an employee made a claim in negligence and sought damages for psychological injury against her former employer. The employee alleged that on numerous occasions, her boss, Mr Gelle, systematically sexually harassed, intimidated and bullied her. The employee stated that, on each occasion, she actively discouraged the behaviour.
Despite her complaints to another director, nothing was done to address the conduct. It continued unabated and became increasingly offensive to the employee, with the result that she developed a psychological illness.
What happened?
The conduct included Mr Gelle:
- shouting at people in the office, at least several times per week;
- positioning himself behind the employee and rubbing himself on her bottom and on the small of her back;
- calling the employee into his work area, placing his hand under her shirt and grabbing her breast;
- making gratuitous remarks to the employee about the dress she was wearing, and suggesting that she should wear dresses more often to show off her legs;
- placing his hand up the back of the employee’s dress and squeezing her on the bottom while she was trying to enter the access code to the car park at the end of a working day;
- approaching the employee from behind and placing a pencil between her buttocks; and
- turning up at the employee’s house uninvited and seeking to obtain entry to her home to talk to her.
As a result, the employee took sick leave due to a psychological illness. While she was on leave, she was contacted by Mrs Gelle, who was another director and Mr Gelle’s wife. The employee informed Mrs Gelle of the reason for her sick leave. Mrs Gelle responded by saying that she would “sort it out”.
However, Mr Gelle’s conduct did not change. Three months later, the employee made a workers’ compensation claim and was assessed as having post-traumatic stress disorder, depression, anxiety and social withdrawal as a result of Mr Gelle’s conduct.
What did the Court find?
The Court determined that the employer had breached its duty to take reasonable steps to prevent harm to the employee by:
- failing to provide the employee with a safe place of work;
- failing to take reasonable steps to care for her psychological wellbeing; and
- exposing her to continuing and repeated harassment.
The employer was found to have been negligent because it:
- was notified of the harassment;
- could reasonably foresee that this conduct was likely to be detrimental to the employee’s wellbeing; and
- despite this, failed to take action.
The Court noted that the consequences of the conduct could have been avoided by facilitating counselling or mediation between the employee and the perpetrator.
Therefore, the employer was liable to pay the employee damages for her workplace injuries in the net sum of $733,723. This was made up of:
- lost income ($285,000);
- lost superannuation ($31,350);
- future loss of earning capacity ($353,812);
- future loss of superannuation ($49,710); and
- tax paid on her weekly workers' compensation payments ($13,851).
Regards,
Charles Power
Editor-in-Chief
Employment Law Practical Handbook
Editor-in-Chief
Employment Law Practical Handbook
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The information in this email is intended solely for the addressee. Access to this email by anyone else is unauthorised. If you are not the intended recipient, please return the message to the sender and delete it from your records. All content is © 2007-2015 Portner Press Pty Ltd All Rights Reserved.
Disclaimer: We research our recommendations and articles thoroughly, but disclaim all liability for any inaccuracies or omissions found in our publications. Click here to view our Privacy Policy and Terms and Conditions.
Queries: For general enquiries, email cs@portnerpress.com.au or call 1300 782 911.
Workplace Helpdesk: Paid subscribers to the Employment Law Handbook can ask our experts for advice.
Syndication: To republish a Workplace Bulletin article, please email cs@portnerpress.com.au for information.
Workplace Bulletin ISSN 1836-117X
Portner Press Pty Ltd
96-98 Bridport Street
Albert Park VIC 3206
Australia
