Sexual Harassment, Internal Investigations and Employer’s Obligations
August 13, 2014
By Dominic Lallo, Senior Legal Counsel - Workplace Behaviour Consulting Services
The recent decision of the Full Court of the Federal Court of Australia in the matter of Richardson v Oracle Corporation Australia Pty Ltd has taken workplace behaviour to another level.
It is a wakeup call to all employers. Above all, the amounts that Courts and Tribunals are likely to award will increase substantially.
The case highlights a number of features the Court was critical of in in the manner the complaint was addressed and investigation was conducted.
Those of you who participated in our recent webinars and in particular our webinar “How to Investigate like a Pro” will recall our coverage of these issue and our recommendations to avoid the pitfalls.
By way of background, Ms Richardson was subjected to eight months of sexual harassment by a colleague at Oracle, Mr Randol Tucker. Mr Tucker’s behaviour included unwelcome sexual advances, invitations and demeaning comments made in the presence of clients and other colleagues. This behaviour continued from approximately April to November 2008, when Ms Richardson reported it to her line manager. Upon notification by the manager, HR instigated an internal investigation. Within a month Mr Tucker was issued with a first and final written warning and Ms Richardson was redeployed to other projects which did not require her to have any further contact with him.
What the Court Found
The case was first heard by Justice Buchanan in the Federal Court of Australia. Justice Buchanan found that Oracle was vicariously liable for Mr Tucker's unlawful conduct under the Sex Discrimination Act 1984 (Cth). Oracle had not taken all reasonable steps to prevent Ms Richardson’s sexual harassment by Mr Tucker. The Court awarded Ms Richardson $18,000. That figure was consistent with other similar cases.
Richards appealed the decision to the Full Bench of the Federal Court of Australia. The appeal is noteworthy because Ms Richardson was awarded $100,000 in general damages and $30,000 for economic loss. The Full Court determined the figure of $100,000 was more consistent with other awards outside the field of anti-discrimination and also better reflected the changing views of the Australian public, who now place a higher value on the loss of enjoyment of life and compensation for pain and suffering than in years past.
Here is the Crunch
Workplace behaviour proceedings and the amounts awarded are being quickly brought into line with other jurisdictions.
Given the highly significant financial ramifications, this case highlights the importance of employers ensuring their policies and procedures regarding harassment, complaints and internal investigations are adequate.
We have identified the following “pressure points” in Richardson’s case for the careful consideration of all employers
Policies and Training:
Employees of Oracle were provided with a copy of Oracle’s “Code of Ethics and Business Conduct” on commencement. They also underwent online sexual harassment training every two years, which was part of a global training package, rather than Australia-specific material. Specifically, Oracle did not include in its relevant policies:
“…advice in clear terms that sexual harassment is against the law, and identification of the source of the relevant legal standard… advice that an employer might also be liable for sexual harassment by an employee. That is an additional element emphasising the lively and real interest that an employer will have in scrupulous adherence to its warnings.”
Ensure your policies:
- Identify the workplace behaviour that is against the law
- Identify the relevant legal standard ( eg Sex Discrimination Act 1984)
- Make it clear what the employer’s attitude is towards unacceptable workplace behaviour, therefore such behaviour will not be tolerated
- State that the employer may also be liable for sexual harassment by an employee,
- State the circumstances in which the employees may be liable and the nature and extent of the liability.
Conduct regular training (at least every two years) to ensure all employees are aware of their responsibilities in the workplace and avenues for making complaints.
Perhaps surprisingly, Ms Richardson complained that she was required to maintain confidentiality during the internal investigation. (Incidentally, Ms Richardson did discuss the matter with two other employees, however no action was taken against her because of this. Any breach or confidentiality should be followed up and acted upon.) It appears Ms Richardson felt disadvantaged by the requirement of confidentiality, believing it protected the rights of Mr Tucker at the expense of her own. This was the result of poor communication at the time of her complaint and further issues detailed under Separation of Parties, below.
Confidentiality is an absolute necessity during the resolution of any workplace behaviour complaint to preserve the integrity of accounts offered by witnesses, protect the reputation and wellbeing of parties and limit the negative effect of the complaint and investigation on the wider workplace. Breach of confidentiality without follow up is one sure way of issues going off the rails.
- The person/s conducting an investigation regarding any workplace complaint should clearly explain to all parties the importance of confidentiality and repercussions of breaching this, including disciplinary action.
- We recommend all parties sign a confidentiality agreement at the commencement of the investigation. This agreement should also confirm the employee understands that breach of the agreement may lead to disciplinary action.
“Formal” vs “Informal” Action:
Ms Richardson complained at trial that she had not wished to lodge a “formal complaint” or have the matter investigated.
Justice Buchanan held that Oracle’s response to her “informal” complaint – being the immediate recording of her full complaint, investigation of her allegations and the action that followed – was a prudent and fair course of action.
Again, Ms Richardson’s concerns regarding the process (and its intention to benefit her) may have been alleviated by clear communication as to the legal responsibilities of an employer to resolve such issues.
Justice Buchanan put it thus:
“…the only sensible step was to obtain from Ms Richardson a reliable written account of her complaints, verified by her as accurate, with which to confront Mr Tucker. It is beside the point to label this as “formal”. Of course it was. But it was a formality in keeping with the seriousness of the situation. A less “formal” or more casual approach may have exposed Oracle to even more criticisms than were levelled at it in the proceedings…”
Whilst a party to a dispute has every right to request their preferred process to resolve their complaint ultimately the employer has the responsibility of deciding the process warranted by the issues. Clearly advise the process chosen, including investigation, but explain why that particular process has been decided upon. Ensure complainants understand that as their employer, your company has a duty of care to address complaints regarding workplace behaviour and where the matter is serious enough, the only appropriate method of resolving the matter, at minimum, involves obtaining a clear, verified complaint from the complainant and providing a respondent the right of reply to any allegations made against them.
Ask the complainant what they hope the outcome of their complaint will be and in what manner they hope the issue will be resolved. Address any unrealistic or unreasonable expectations at the outset (with reference to policies and any relevant legislation) to prevent disappointment at the resolution of the matter.
Health and Safety of Parties:
Although Ms Richardson was not required to continue face to face contact with Mr Tucker during the month-long investigation process, she did participate in around six telephone conference calls and a number of email exchanges with Mr Tucker.
This appears to have been, at least partly, the result of miscommunication – the HR representative responsible for the investigation thought Ms Richardson’s manager would prevent their ongoing contact, while the manager thought Ms Richardson was not opposed to telephone and email contact, provided she did not see Mr Tucker in person.
Also relevant was that the HR representative believed senior managers could not be informed of the investigation, lest Mr Tucker’s reputation be affected. It was thus assumed that neither Mr Tucker nor Ms Richardson could be removed from the project team they were both part of.
We recommend assessing whether any of the parties health and wellbeing is at risk and if necessary eliminating any contact between the complainant and respondent as soon as possible following receipt of a complaint. This includes limiting the possibility of the parties physically coming into one another’s vicinity in the workplace. Neglecting to do so may cause further distress to both parties and place the employer at risk of breaching their duty to provide a safe workplace, given a potential hazard has been identified.
Ms Richardson, who was ordinarily based in Sydney, was initially interviewed by HR at Oracle’s Melbourne office (where Mr Tucker was based) and continued to work from that office for the first week of the internal investigation. As a side note, we also recommend interviewing a complainant at a location agreeable to them and preferably removed from the respondent’s ordinary workplace.
Ms Richardson first complained of Mr Tucker’s behaviour to her line manager on Thursday 13 November or Friday 14 November 2008. An HR representative met with Ms Richardson to prepare the formal complaint and discuss the internal investigation on Monday 17 November 2008. On 11 December 2008, Mr Tucker was issued with the first and final written warning. A meeting with Ms Richardson was arranged for the following week.
This investigation was instigated quickly, which is certainly appropriate in these circumstances, and we note that the court did not express concerns regarding the timeframe.
We recommend setting a fair and realistic timeframe for every step required to resolve the complaint. Your policies may include timeframes and if so they must be followed. Above all advise the parties of the timeframe for the relevant steps and keep them informed. Unrealistic timeframes and delays often lead to issues escalating; in some case stress resulting from delay has resulted in a workers compensation claim for stress. Employers should seek to ensure that witness interviews are conducted as quickly as possible, to prevent ongoing uncertainty for all parties involved and to limit the opportunity and likelihood of information being shared between parties during the investigation.
- The complainant will be interviewed to “sign off” on the particulars of the complaint and make a statement and a statement obtained also from witnesses nominated by the complainant within one-two weeks of their complaint
- The respondent provided with the particulars of the complaint and a statement obtained from him or her and all witnesses nominated by them within one-two weeks
- The complainant and respondent should be kept informed of the timeframe and any delays encountered. The complainant and respondent informed of the findings and outcome and matter resolved with four weeks
LS Partners Investigations
It is important that both the complainant and respondent are aware that the investigation is impartial and conducted solely to establish the facts of the matter. A number of the issues of communication raised in Richardson v Oracle may have been averted by appointing an independent investigator (Ms Richardson raised concerns regarding the HR representative’s impressions of Mr Tucker and his sincerity, for example).
Should you wish to discuss a particular workplace behaviour matter at your company, or seek advice regarding the adequacy of your company’s current policies, procedures and training in light of the above pressure points, please do not hesitate to contact our office via the contact form.