Sexual harassment is an all too common and lamentable act that can damage an employer’s credibility and, to a degree, destabilises an organisation’s commercial goals. A recent case involving a software company and a consulting manager employed there, highlights the absolute importance of giving due attention to detail in policies, as the company was ultimately held responsible for an employee’s conduct because it failed to clearly state that sexual harassment is unlawful.

The consulting manager, who was recruited by the employer from the United States,  claimed that she was subjected to humiliating sexual harassment from the moment she began work by one of her team’s Melbourne based sales representatives.

The employee alleged that the sales representative made comments at meetings with her colleagues and external contacts. The alleged comments included statements such as:

• “It’s a good thing you didn’t come out because I think if I were drinking with you I would wind up in the corner with my arms around you kissing you.”
• “I love your legs in that skirt. I’m going to be thinking about them wrapped around me all day long.”
• “I love it when you’re mean to me. It just makes me think how hot you would be in bed.”
• “You and I should go away for a dirty weekend sometime.”

What is distinctive about this case is not so much that the judge involved found that the male sales representative had, indeed, sexually harassed the employee at work. Nor is it particularly important that he found nothing unlawful in the allegations the employee put forward about the company’s actions.

Her allegations were that the company had forced her to deal with the complaint formally when she wanted to work through an informal procedure, that the company forwarded an apology from the sales representative that the consulting manager did not want to receive, that she was required to maintain phone and email contact with her alleged harasser while an investigation took place and that the new role the company created for her, which was based in Sydney, lowered her standing and level of responsibility within the organisation and, therefore, forced her to seek employment elsewhere.

What is distinctive, and of considerable importance to all employers, is the fact that the company’s sexual harassment policy and the detail contained within it was found to be deficient in one important respect.

The employer argued against vicarious liability for the actions of the sales representative because, it said, its ‘Code of Ethics and Business Conduct policy’ was referred to in all of its employee’s contracts and included a requirement that employees undertake online sexual harassment training every two years, which the sales representative involved in the allegations had, in fact, completed after he began work with the company.

The judge found that the policy was inadequate, however, because it left out the important detail of stating clearly that sexual harassment was against the law.

He stated that the expression of illegality, as it relates to sexual harassment, is ‘a significant additional element to bring to the attention of employees’, beyond a simple statement of its being contrary to company policy not matter how firmly the consequences of such a breach might be stated.

This omission, the judge said, was a sufficient indication that the employer had not taken all reasonable steps to prevent sexual harassment and was, therefore, vicariously liable for the sales representative’s conduct. Highlighting the critical importance of reviewing documentation associated with policies that deal in sexual harassment and reassuring everyone concerned that a clear statement of illegality, in reference to that issue, has been clearly and unambiguously made.