$500,000 sexual harassment case proves workplaces can include the pub across the road

Employers are being warned they may be liable for sexual harassment that happens outside the office, after the Federal Court ruled a pub two work colleagues visited to deal with sexual advances counted as a “workplace”.

The sexual harassment case, which awarded damages of almost $500,000 to the plaintiff, follows a landmark case last month that paved the way for a huge rise in the penalties courts could impose in such cases.

In December last year, Justice Mordy Bromberg found Jemma Ewin, a chartered accountant at entertainment company Living and Leisure Australia, was sexually harassed four times in May 2009 by Claudio Vergara, a casual accountant employed by the company.

The case was back in court this week as Vergara attempted to appeal two of Justice Bromberg’s findings, including that the pub the two talked in could be defined as a “workplace”.

In the original case, it was found Ewin – who was Vergara’s supervisor – was first harassed one evening in the company’s offices at KPMG House in Melbourne’s CBD.

The court heard at the end of the working day, Vergara turned off the lights in the office he shared with Ewin, walked behind her, and tried in the dark to touch her hand, telling her she should finish work.

He told Ewin he would turn the light back on only if she agreed to come to talk to him, as he wished to tell her something. Ewin agreed to accompany Vergara to the Waterside Hotel.

The two then went to the pub, which was across the road from the office, where Vergara propositioned Ewin in “very explicit and crude terms and proposed that they have an affair”.

Ewin, who is married, refused the offer, but Vergara later tried to kiss her on the walk to the train station.

The next day at the office, Vergara asked Ewin: “What are you doing to keep Claudio happy?”

That night, after an afternoon drinks function at the Melbourne Aquarium, the court found Vergara and Ewin had likely engaged in sexual intercourse, which Ewin told the court she had no memory of.

She said she had woken up the next day with physical symptoms consistent with penetration.

Vergara appealed the finding they had had sex, as well as the definition of the Waterside Hotel as a “workplace” – but both appeals were dismissed by the judges.

Justice Richard White said while the evidence to support the act of sex was circumstantial, as the supervisor had no memory of it occurring, the circumstantial case was “strong”.

The judges agreed with Justice Bromberg’s original finding that the pub visit was triggered by the supervisor’s need to deal with the accountant’s unwanted sexual advances, and that the “function” of both at the hotel “was to deal with what had commenced at the workplace” – and could therefore be considered a workplace.

M+K Lawyers partner Andrew Douglas told SmartCompany since the landmark case of Oracle Vs. Richardson, the penalties courts are able to impose in sexual harassment cases have risen significantly.

“The courts are starting to show the new tariffs, which are significantly above where they were a year ago, even significantly above where they were a month ago,” says Douglas.

Douglas says while the complexity of the facts surrounding the sexual intercourse complicate the case, the matter of whether or not the pub could have been seen as a workplace was quite clear.

“If you go to a place outside of work, then it can still be viewed as a workplace as long as there is a sufficient connection to the workplace,” he says.

“Any workplace-related behaviour will always be seen as workplace-related behaviour [by a court].”

Douglas says an example employers should keep in mind is a work Christmas party and any ensuing social activities. An employer may even be liable if a manager agrees to go out with employees after the function has finished.

Douglas also says employers should look carefully at laws regarding improper emailing and bullying because in such cases even an employee’s home can be regarded as a workplace. 

His advice is for employers to have strict policies and procedures in place to protect them from liability, such as in this case where Living and Leisure Australia avoided implication.

Douglas says with the correct policies and procedures in place, employers can show they have provided a safe and non-discriminatory workplace, can protect themselves from adverse actions, and can still have the right to terminate an employee who has done the wrong thing. 

“If you get it right you can deal with bad guys and avoid being liable,” he says.  

SmartCompany attempted to contact Living and Leisure Australia, but the company could not be reached prior to publication.