Sexual Harassment and Employer Liability

Did you know that effective September 2024, significant changes to Australia’s workplace sexual harassment laws have come into effect? These changes are part of broader reforms under the Fair Work Legislation Amendment and incorporate the Respect@Work recommendations aimed at creating safer work environments. 

Impact HR is passionate about creating more productive and happier work environments but also concerned about one aspect of this legislation. If an employee brings a sexual harassment claim and just one part of the claim is upheld, the employer could be ordered to pay the employee’s court costs. While big businesses with deep pockets may not be materially impacted by this change, for some of our clients, this could result in bankruptcy. The easiest aspect to prove could be that your business hadn’t provided adequate training or guidance.  

Protect your business now by learning more and following our downloadable Positive Duty of Care checklist.  

Positive Duty to Prevent Sexual Harassment 

All employers now have a legal obligation to actively prevent workplace sexual harassment, sex-based discrimination, and hostile work environments. This duty requires proactive measures, such as risk assessments, updated anti-harassment policies, and training for employees. Employers who fail to meet this duty may face penalties, including an increase in compensation of up to 25% in sexual harassment claims. 

Vicarious Liability 

Under the new sexual harassment laws, employers can also now be held liable for the actions of both employees and third parties (e.g., contractors or clients) if they do not take reasonable steps to prevent sexual harassment. This expands employer responsibilities, making it essential to assess risk areas and update internal policies​.  

Alternative Path for Claims for Employees 

The changes also include a provision for a less expensive and more accessible dispute resolution process through the Fair Work Commission for employees. This alternative path allows multiple victims to jointly file claims and seek both compensation and penalties for sexual harassment without the significant costs associated with court proceedings. However, employers may still face financial consequences, such as covering compensation or penalties if found liable​. 

Summary 

These changes reinforce the importance of a proactive and transparent approach to preventing sexual harassment and ensuring safer, more respectful workplaces. In short, if an employee commits an act of sexual harassment in the workplace or in connection with work, the employer may be seen as equally liable as though they had done the act themselves. However, if employers can show that they took all reasonable steps to prevent sexual harassment, then potentially they will not be found liable.