Richardson v Oracle Corporation Australia Pty Ltd [2014] FCAFC 82

In a landmark decision, the Full Court of the Federal Court has increased the amount of compensation for non-economic loss awarded to an employee, who was sexually harassed in the workplace, from $18,000 to $100,000. This decision is a reminder that minimising the risk and incidence of sexual harassment should be at the top of your workplace risk management practices.

The original decision

In 2010, Rebecca Richardson issued legal proceedings against her previous employer, Oracle, alleging that she had been sexually harassed in the workplace by a co-worker, Randol Tucker, on at least 11 occasions over six months.

Ms Richardson claimed that Mr Tucker made various inappropriate comments to her, which included "Rebecca...I think we must have been married in our last life...how do you think our marriage was? I bet the sex was hot".

The Federal Court held that Ms Richardson had been sexually harassed and that Oracle was vicariously liable for Mr Tucker's behaviour, given it had not taken "all reasonable steps" to prevent such conduct from occurring in its workplace. As a result, Ms Richardson was awarded $18,000 for pain and suffering and loss of enjoyment of life.

Ms Richardson also sought compensation for economic loss. She claimed that the harassment had caused her to resign from Oracle and accept employment with another company at a lower rate of pay. The Federal Court rejected this claim.

The appeal

Ms Richardson appealed the decision to the Full Court of the Federal Court where it was held that $18,000 was "manifestly inadequate" in that it did not sufficiently compensate Ms Richardson for the psychological and reputational damage that she suffered. The Full Court agreed, finding that community standards "now accord a higher value to compensation for pain and suffering and loss of enjoyment of life than before".

The Full Court also held that Ms Richardson was entitled to compensation for the detriment the harassment caused to the sexual relationship with her partner at the time. As a result of these findings, the amount of damages was increased from $18,000 to $100,000.

In addition to increased compensation for non-economic loss, the Full Court held that Mr Tucker's conduct was a material cause of Ms Richardson's decision to resign from Oracle and accept a lower paid position. Oracle was ordered to pay Ms Richardson $30,000 for economic loss, which was the difference between the salary she received at Oracle and her new salary over a three year period.

What does this mean for employers?

The Oracle decision has set a higher benchmark for non-economic loss arising from sexual harassment. As an employer, in order to avoid a successful claim being made, you must be able to demonstrate that you have taken all reasonably practicable steps to prevent sexual harassment from occurring in your workplace. This can be achieved by:

  • conducting regular sexual harassment awareness and prevention training and ensuring that it aligns with anti-discrimination laws
  • reviewing and updating workplace policies on sexual harassment to ensure that, at a minimum, they:
    • state that sexual harassment is unlawful
    • state that employers can be vicariously liable for sexual harassment in connection with employment, and
    • refer to applicable anti-discrimination laws, and
  • ensuring that complaints are promptly investigated and appropriate action is taken to address any incidents of sexual harassment.

Taking the above actions will place you in the best possible position to defend sexual harassment claims, or at least limit your liability in relation to such claims. If you aren't sure about your obligations then we recommend you seek legal advice.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.