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Award of $70,000 for non-financial loss in Queensland sexual harassment case - 16 February 2017

In a recent sexual harassment case, the Queensland Civil and Administrative Tribunal awarded $70,000 compensation for non-financial loss, from a total award of more than $156,000, to a cleaner who suffered a psychological injury following a workplace prank.

The decision in Green v State of Queensland, Brooker and Keating [2017] QCAT 008 is significant for its consideration of the principles applicable to compensation awards in sexual harassment cases in Queensland, following the landmark decision of the Full Federal Court in Richardson v Oracle Corporation Australia Pty Ltd [2014] FCAFC 82. In that case (see our previous alert here), on appeal, an initial award of $18,000 for non-financial loss was increased to $100,000, on the basis that previous awards for non-financial loss in sexual harassment cases - in the range between $12,000 to $20,000 – were no longer in line with current community standards.


Facts

The applicant worked as a cleaner in a Queensland State School.  In September 2014, as a prank on the applicant, the school groundsman and the applicant’s cleaning supervisor set up a school staff room to appear as though a ‘sex romp’ had occurred. The applicant, one of three cleaners responsible to clean the room, was led to believe that two other staff members at the school rumoured to be having an affair were responsible for the mess.  The applicant was then required to clean up the scene, a task which he believed involved cleaning up bodily fluids.  The groundsman and the supervisor only told the applicant it was a prank when he said he was going to confront one of the teachers rumoured to have been responsible for the mess.

The applicant suffered acute anxiety or PTSD in the month after the prank which prevented his return to work.  A psychiatrist ultimately diagnosed him with an adjustment disorder featuring anxiety as a direct result of the prank and its aftermath.  Subsequent victimisation of the applicant by the groundsman led to a further diagnosis of alcohol use disorder secondary to PTSD.

The applicant sued his employer, the Queensland Department of Education and Training (the Department), the groundsman and his cleaning supervisor for compensation for sexual harassment as a result of the prank.

Relying on the decision in Richardson, the applicant sought a compensation award, additional to financial loss, of $250,000, on the basis that his injury was substantially worse than that suffered by the applicant in the Richardson case.

Decision

The Department’s main approach to the claim was to argue that the applicant feigned or grossly exaggerated his response to the prank, with their expert psychiatrist suggesting he was malingering.

QCAT sided with the applicant’s treating psychologist and psychiatrist in finding his symptoms were genuine, despite some inconsistencies and his acting experience as a movie extra.

After making a complaint about the incident to the Queensland Anti-Discrimination Commission, the applicant further alleged that the groundsman victimised him because of the complaint.  The victimisation, which was found by QCAT to have occurred, included the groundsman appearing to video the applicant when he was dropping his two children off at the school – at which they were students – and the groundsman intimidating the children in one incident outside the school, which left the plaintiff feeling considerable anxiety.

Compensation

In awarding $70,000 for non-financial loss, considerably less than the $250,000 claimed by the applicant, Member Gordon observed that:

  • The principles in Richardson were of wide application and not limited to particular types of cases or to cases with similar facts.
  • Awards of compensation for non-financial loss in unlawful discrimination cases across Australia – not just those involving sexual harassment – were being influenced by the decision in Richardson.  Six decisions were referred to with awards ranging from $15,000 to $180,000.
  • While Richardson appeared to have resulted in some increases in the level of compensation awards for non-financial loss, overall the increases have not been as nearly as dramatic as in Richardson itself.
  • One of QCAT’s objects is to ensure that like cases are treated alike.  Consistency in decisions is important so that parties and their advisers can more reliably predict the value of a claim to encourage settlement and for fairness in “the system”.
  • Historically, compensation awards in QCAT have not kept pace with prevailing community standards.  However, more recently, efforts have been made to raise the level of awards for non-financial loss in unlawful discrimination cases, particularly those involving recognised personal injury, to the level of awards made in personal injury cases in Queensland.  There was now a line of authority in QCAT decisions which have sought consistency with other court awards for personal injury.
  • However, this trend did not involve following Richardson.  An award to the applicant of substantially more than $100,000 for non-financial loss – which would be inevitable if Richardson was followed in this case – would take it well outside the range for a comparable personal injury case in Queensland.
  • QCAT should stay on its existing course and not, because of Richardson, suddenly increase awards where there is a recognisable personal injury.

After a consideration of recent comparable cases involving recognisable personal injury, in both the anti-discrimination and common law jurisdictions, member Gordon decided that the award of $70,000 to the applicant was appropriate.  He also awarded interest on that sum at 2% per annum from the date the applicant first complained of being sexually harassed up to the date of the decision – a sum of $3,160.

In member Gordon’s view, the approach taken by him in Green will not apply where there is no recognisable personal injury. This will be where, for example, there are acts of discrimination or sexual harassment which result only in offence, embarrassment, humiliation or intimidation.  In such a case there will be no comparable Queensland awards to provide an example which can be followed to achieve consistency. In these types of cases, Member Gordon suggested that the Tribunal can be influenced by the decision in Richardson to increase its level of awards if it is appropriate to do so, to ensure that the level of awards in QCAT keep pace with inflation and prevailing standards in the community, whilst of course remaining consistent with its own previous decisions.

Who was liable for what?

QCAT found both the groundsman personally and the Department of Education and Training liable for the total compensation award, of $156,051, which included allowances for past and future loss of earnings, superannuation and future medical costs.

The applicant’s supervisor was ordered to pay 50% of the total compensation award personally, on the basis that she was only partly responsible for the sexual harassment and its impacts on the applicant.

While legally the applicant will be able to recover the total award from all three respondents (up to 50% in the case of the supervisor), 100% of the award is recoverable from the Department as the employer of both the groundsman and the applicant’s supervisor.

The Department was held to be vicariously liable for the conduct of the groundsman and the applicant’s supervisor as its employees.  For employers this will always be the result if a worker or agent, in the course of their work for the employer, contravenes the Queensland Anti-Discrimination Act or the corresponding federal legislation [1].  Employers can avoid such liability if they can demonstrate they took reasonable steps to prevent the worker’s breach [2].  The Department did not try to establish this defence in Green.   “Reasonable steps” will usually involve proof that workers and agents have been trained in relation to discrimination law, specifically to know what behaviour is unlawful and where the employer could be found vicariously liable, with the training reinforced by up to date policies dealing with relevant issues, including sexual harassment.

In deciding whether particular conduct took place “in the course of work”, QCAT will generally take a liberal view in seeking to find a sufficient connection between the conduct and the work.  A relevant connection was found in Green.

As a further example, in STU v JKL (Qld) Pty Ltd and Ors [2017] QCAT 505 – also a sexual harassment case in QCAT - decided three weeks before the decision in Green – the complainant was sexually assaulted, outside of work hours, by a colleague while living in onsite accommodation provided by her employer.  The employer was found to be vicariously liable for the assault, despite the fact that at the time it occurred, the perpetrator was not directly engaged in work activities.  In that case, from a total compensation award of more than $300,000, as in Green, a sum of $70,000 was awarded for non-financial loss.  The decision in the STU case was one of the cases to which Member Gordon referred in Green, as indicative of the recent trend of awards for non-financial loss in unlawful discrimination cases determined by QCAT and involving recognisable personal injury.

According to the case report in Green the applicant had made a worker’s compensation claim in respect of his injuries and, in that claim, had been compensated for most of his past lost earnings. He had also recovered some loss of earnings from income protection insurance.  So only a small part of the total award in the sexual harassment case related to past lost earnings (as opposed to future loss of earnings). Had the applicant not exercised these other rights of recovery, he might also have claimed and recovered further substantial compensation in this respect from all of the respondents.

Awards of compensation in unlawful discrimination cases are not underwritten (at least in Queensland) by the statutory workers’ compensation insurance scheme.  Unless, as in Green, a worker’s compensation claim is made separately, or, the employer has privately held insurance cover for employment practices liability, an employer found liable for unlawful discrimination will have to meet any compensation award, plus the costs of the litigation, from their own resources. The buck really will stop with you.

So far as costs are concerned, no costs were awarded in Green, leaving the parties to bear their own costs.  This is the general rule in litigation conducted in QCAT [3].    However it is not the general rule in the federal human rights jurisdiction, where costs will generally be awarded to the successful litigant [4].

We suspect that - given the failure of the non-financial loss claim to reach Richardson proportions ($250,000 according to the applicant), coupled with the ordinary costs of litigation - the applicant in Green will be fairly disappointed by his net recovery after legal costs are taken into account.

Key takeaway points

  • Awards of compensation by QCAT for non-financial loss for breach of the Queensland Anti-Discrimination Act, involving recognisable personal injury, will in future be comparable to common law awards for similar injuries.
  • Depending on the nature and extent of the injury, the level of these is likely to be higher – in some cases substantially so – than has been awarded in unlawful discrimination cases previously.
  • It is difficult to predict, from there, what further influence the decision in Richardson will have on the Queensland anti-discrimination jurisdiction.
  • Member Gordon in Green appears to have left the door open for Richardson to be more relevant in cases where a claim for non-financial compensation relates only to “offence, embarrassment, humiliation or intimidation”.  How this will work in practice remains to be seen.  It is unlikely to mean that, in those cases, a victim of unlawful discrimination could, in Queensland, expect a higher compensation award for non-financial loss than someone who suffered a recognisable personal injury.  It probably means that cases not involving physical injury will be worth more in non-financial compensation than has historically been recognised in the discrimination jurisdictions.  This would be consistent with the theme, upon which Richardson is based, that previous awards for non-financial loss in sexual harassment cases were no longer in line with current community standards. 
  • In Green, member Gordon pointed out that he was not (and QCAT is not) bound by the decision in Richardson.  The same will not be true of the Federal or Federal Circuit courts, who are the ultimate arbiter of unlawful discrimination claims made in the federal human rights jurisdiction.  This might mean that a case brought in the federal jurisdiction will, so far as non-financial loss is concerned, be worth a great deal more in compensation than the same claim made under Queensland law.
  • These considerations will force potential applicants and their advisers to think carefully about the appropriate jurisdiction in which to bring a claim.
  • For instance, even in cases involving unlawful discrimination, a claimant who has suffered a recognisable personal injury might be better off, in Queensland, bringing a common law claim for damages for personal injury, provided that there are reasonable prospects for establishing liability at common law, whether in negligence or for breach of contract.  One advantage of such a claim where available is that, ordinarily, a successful claimant can also recover something for legal costs in bringing the claim.
  • The prospect to recover something for costs might also drive potential unlawful discrimination claimants into the federal human rights jurisdiction, particularly if there is some chance to recover more in compensation than might be recovered in the equivalent State jurisdiction.
  • Putting all of that to one side – prevention is better than cure and, having regard to the potential insurance gaps, the disease could kill you.  It is reasonable to assume that the Department in Green had nothing upon which it could have relied to try to show that it had taken “reasonable steps” to prevent sexually charged pranks in the relevant workplace.  A few simple and practical steps could have been taken by the Department to avoid liability on the claim.  If you want to know what they are, call us.

For more information or discussion, please contact HopgoodGanim Lawyers' Industrial & Employment Law  team.

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[1] Section 133(1) of the Act; section 106(1) of the Sex Discrimination Act 1984 (Cth).

[2] Section 133(2) of the Act; section 106(2) of the Sex Discrimination Act 1984 (Cth).

[3] Section 100 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld); Medical Board of Australia v Alroe [2016] QCA 120.

[4] Minns v New South Wales (No 2) [2002] FMCA 197.


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