The Swillhouse sexual misconduct allegations have inundated news feeds around Australia, highlighting the increasing scrutiny on how employers prevent and respond to sexual harassment and discrimination in the workplace. 

This article examines the employers' duty of care in line with the Anti-Discrimination and Human Rights Legislation Amendment (Respect at Work) Act 2022 (Respect at Work Act), which places a positive duty on employers to take reasonable and proportionate measures to eliminate, as far as possible, unlawful sex discrimination (including sexual harassment) in the workplace. 

What are the Swillhouse allegations? The Sydney Morning Herald (the Herald) conducted an investigation into the Swillhouse Hospitality Group (Swillhouse) following allegations that staff have experienced sexual assault, sexual harassment and drug use while working at the Swillhouse venues. Former bartender of the year, Jenna Hemsworth, has now come forward as a victim of alleged sexual harassment. 

Further investigations reveal that five women have accused former and current Swillhouse bartenders of sexual assault. One woman, who was working at Hubert’s (part of Swillhouse) at the time, said she was sexually assaulted in the women’s bathroom in the restaurant after being given a cocktail that was made from 10 different types of gin. She is allegedly pursuing her allegation with the Police. 

Investigations also reveal a culture in Swillhouse that is linked to excessive drinking and drug use, with one bartender telling the Herald it was “like a cult”. A culture of misogyny and poor treatment of women was also identified, with Swillhouse allegedly not hiring its first female bartender until 2012. According to a source, women were first hired at the Baxter Inn in 2014. At the time, there were no sanitary bins in the bathroom. 

At the same venue, which was named sixth best bar in the world in 2015, bartenders who spoke with the Herald said staff members used the code word “shoes” or “Jimmy Choos” to indicate to other staff members that a customer with large breasts had entered the venue. 

Staff also had a wall with notes written on it about customers they had sex with, rating their attractiveness on a sliding scale. 

These allegations have had a sweeping impact on Swillhouse. Le Foote, a heritage listed venue in the Rocks, has stepped down from its position on the board of the Australian Restaurant and Cafe Association (ARCA) and Hubert’s, a French bistro in Sydney's CBD, has been removed from Gourmet Traveller’s Annual Restaurant Guide. 

SafeWork NSW is now conducting their own investigations. 

Is it Swillhouse's duty and responsibility to stamp out this type of culture and protect its employees? Absolutely.

Under the Respect at Work Act, an employer has a positive duty to take reasonable and proportionate measures to eliminate sexual harassment and discrimination in the workplace. This means that employers cannot simply respond to harassment as it happens, instead they must focus on preventing harassment before it occurs. 

So what does this look like in the context of Swillhouse? This translates to major HR policy reform, open and consistent conversations with staff, and the implementation of sexual harassment and assault awareness training. It also includes bystander intervention training, updating reporting structures and establishing a zero-tolerance policy for abuse. 

But how can an employer like Swillhouse determine compliance with the positive duty? How do you measure compliance? When determining whether an employer has complied with its positive duty, the following may be taken into account: 

(a)    the size, nature and circumstances of the business or undertaking; 

(b)    the employer’s resources (financial or otherwise); 

(c)    the practicability and cost of measures to eliminate unlawful conduct; and 

(d)    any other relevant matters, including, but not limited to the culture of the workplace, levels of employee supervision and working hours. 

Against this backdrop, given the serious nature of the allegations, Swillhouse's substantial financial backing, and the alcohol-fuelled culture, it appears that Swillhouse has failed in its positive duty to implement effective measures to prevent such behaviour as far as reasonably practicable. Instead, this culture and the actions of its employees have been able to slip through the cracks, undetected. Particularly troubling for Swillhouse is that the allegations of harassment seem to be directed at managers, who have an increased level of responsibility. 

The consequences of an employer’s failure to meet this positive duty was illustrated in a Victorian case, Oliver v Bassari (Human Rights) [2022] VCAT 329. 

Ms Oliver, a beauty therapist, filed a complaint against a co-worker, Mr Catalfamo, for sexual harassment and also her office manager and employer for vicarious liability. 

Ms Oliver alleged instances of sexual harassment by Mr Catalfamo, which included inappropriate touching, suggestive comments and requests for sexual acts. Despite complaints to management, the harassment persisted, ultimately leading to her resignation.

Ms Oliver alleged that her employer and manager did not do enough to prevent and address the behaviour.

The employer claimed that they did have measures in place to prevent sexual harassment including:

(a)    an employee handbook which contained policies around sexual harassment;

(b)    a procedure of providing all new employees with the handbook via email;

(c)    this handbook was discussed in staff meetings; and

(d)    this handbook was available electronically to all staff. 

The Victorian Civil and Administrative Tribunal found in favour of Ms Oliver, ruling that the employer failed to take reasonable precautions to prevent harassment. The tribunal rejected the employer’s defence, finding that the precautions taken by the employer, including making the Handbook available electronically and discussing it in staff meetings, were insufficient.

As a result of the employer’s negligence, the employer was ordered to pay Ms Oliver $150,000 in general damages.

Things that were notably missing from this workplace included:

(a)    a policy to manage unacceptable workplace behaviour; 

(b)    a procedure for managing complaints; and 

(c)    training for its employees around workplace behaviour. 

As we await SafeWork’s findings on the Swillhouse allegations, it will be interesting to see whether Swillhouse had these types of policies in place. Given Swillhouse's size and prominence, it would be surprising if the group did not have measures in place to safeguard against harassment. However, much will turn on the adequacy of these policies (including whether staff were in fact trained in the policies) and whether Swillhouse took reasonable precautions to eliminate sexual harassment and discrimination.