Failure to act on sexual harassment complaint leads to litigation and significant payout

In brief - Employers ignore sexual harassment complaints at their peril

The substantial sum awarded for damages to a worker in a recent sexual harassment case shows that employers who fail to act on such complaints risk costly litigation and large payouts.

NSW District Court awards considerable sum

In the case of Trolan v WD Gelle Insurance and Finance Brokers Pty Ltd [2014] NSWDC 185, the District Court of NSW awarded $733,723 to a worker who brought a claim for damages against her former employer following psychological injury that resulted from ongoing sexual harassment.

Plaintiff becomes ill after months of abusive and unwelcome sexual conduct

In 2008, the plaintiff started working at WD Gelle Insurance and Finance Brokers Pty Ltd. She alleged that between August and December 2008, the director, Mr Gelle, systematically conducted himself in an unwelcome and sexualised manner towards her on numerous occasions in her workplace. In December 2008 she left on workers' compensation.

The court heard that between August and September 2008, Mr Gelle:

• stood behind the plaintiff and pressed and rubbed his stomach and genitals against her buttocks and the small of her back
• placed his hand up under her shirt and grabbed her breast on a number of occasions
• suggested she wear dresses more often to show off her legs
• frequently screamed at her and her colleagues
• placed his hand up her dress and squeezed her bottom

Complaints to another director have no effect

On 20 September 2008, the plaintiff complained to Mrs Anna Gelle, another director of the company and Mr Gelle's wife, who responded, "Don't worry about it. I'll sort it out." However, nothing was done to address or curtail his alleged conduct and between October and December 2008, Mr Gelle:

• sat down beside her and slid his hands up and down her legs
• restrained her hands by her side, held her hands behind her back and put his lips on hers for about five seconds
• deliberately touched her breasts and vagina through her clothing
• propositioned her, saying that he wanted to make love to her and that he thought she needed a baby
• placed a pencil down the back of her trousers

The plaintiff alleged that this conduct amounted to sexual harassment, intimidation and bullying and that she had emphatically rebuffed and actively discouraged that behaviour.

Plaintiff claims breach of duty of care and alleges negligence

In support of her claim that the defendant had breached the duty of care owed to her, the plaintiff relied upon a number of allegations of negligence, including:

• Failing to provide the plaintiff with a reasonable safe place of work
• Failing to take reasonable care for the plaintiff's safety
• Placing the plaintiff in a position of peril in the circumstances

Judge finds defendant's evidence unsatisfactory and unconvincing

Despite the defendant's submissions that the plaintiff's evidence contained inconsistencies and was unreliable, Judge Levy concluded that "the plaintiff's evidence was entirely convincing… and there was no cause for doubting her truthfulness." [at 40]

Judge Levy found Mr Gelle to be an unsatisfactory and unconvincing witness on all matters in contention between the parties, stating: "I found myself unable to rely upon any aspect of his evidence that involved controversy when compared to the evidence of the plaintiff." [at 61]

Company vicariously liable for defendant's conduct and failed in its duty of care

In accepting that Mr Gelle was the "…controlling mind, will and embodiment of the company, and as such, had the requisite knowledge of the offending circumstances that evolved over time. He worked in close proximity to the plaintiff in a position of authority over her …" [at 218], the court found that the company was vicariously liable for his aberrant conduct towards the plaintiff.

The court also noted that the failure by Mrs Gelle in her position of director of the company to address Mr Gelle's conduct towards the plaintiff constituted a failure by the company to discharge its duty of care to the plaintiff.

Defendant's behaviour found to have caused plaintiff's psychological illness

Judge Levy concluded that a reasonable employer would have acted to protect the plaintiff from being subjected to Mr Gelle's unwanted behaviour. He was ultimately satisfied that the plaintiff's psychological illness had been caused by Mr Gelle's offensive and sexually harassing behaviour, as well as his bullying and intimidation.

In finding for the plaintiff, Judge Levy ordered that the plaintiff be awarded $733,723 in damages and costs.

Employers must educate staff on unacceptable conduct in the workplace

As a bare minimum, employers need to have in place policies and procedures to educate their staff on what conduct is and is not acceptable in the workplace. These procedures should also set out a clear process to be followed should an incident (or alleged incident) arise.

It is also imperative that these policies are regularly reviewed in order to ensure compliance and sufficiency.

Employers must act when allegations arise

When an employer faces allegations similar to the facts in the present case, it would be advisable to:

• commence an investigation immediately
• consider counseling for all parties involved
• impose disciplinary action where appropriate
• seek legal advice to ensure that you are adequately protected