16 Sep 2008

Significant damages payout plus costs for sexual harassment claim

by Joe Catanzariti

Anti-discrimination tribunals and courts are beginning to order more generous payouts

Anti-discrimination tribunals are increasingly prepared to order generous awards for damages.

In the recent decision of Tan v Xenos (No 3) (Anti-Discrimination) [2008] VCAT 584 the Victorian Civil and Administrative Tribunal (VCAT) found that Dr Chris Xenos had sexually harassed Dr Caroline Tan in breach of anti-discrimination legislation. Dr Tan was awarded $100,000 in damages, considered significant in this jurisdiction.

In the associated ruling of Tan v Xenos (Anti-Discrimination) [2008] VCAT 1273, VCAT also ordered the Dr Xenos to pay some of the costs Dr Tan incurred in the lengthy proceedings.

Background

As part of her training to be a neurosurgeon, Dr Tan was employed as a neurosurgical registrar at the Monash Medical Centre. From early August 2004, she moved into a surgical team led by Dr Xenos.

In December 2004, Dr Xenos started inviting Dr Tan to his private rooms. On 15 February 2005, Dr Tan accepted such an invitation. At this meeting, Dr Tan alleged that Dr Xenos sexually harassed her by embracing her, kissing her on the lips, putting his hand down her breast, pinning her against the table, exposing himself and asking her to perform a particular sexual act.

Dr Tan lodged a complaint with the Human Resources Department of the Medical Centre in early 2006. She also made a number of less formal complaints to some of her colleagues after the incident. Eventually, she lodged a complaint in VCAT. Dr Xenos denied the incident took place.

Decision

Under section 87 of the Equal Opportunity Act 1985 (Vic) a person must not sexually harass another person at a location that is a workplace for both of them. Sexual harassment includes making an unwelcome sexual advance or engaging in unwelcome conduct that is of a sexual nature.

Judge Harbison concluded that it was more probable than not that the alleged incident took place. The evidence, including that of Dr Tan making a number of complaints following the incident, was consistent with the complaint. It was not consistent with Dr Xenos' submission that the story had been fabricated because of Dr Tan's unsatisfactory performance as a neurosurgeon and her knowledge of likely failure in her training.

In the result, VCAT awarded substantial general damages in the amount of $100,000. The damages award reflected on a financial basis the hurt that Dr Xenos' act caused Dr Tan. VCAT also disavowed the notion that damages awards in the anti-discrimination jurisdiction should be lower than those awarded in comparable cases in other courts.

While there was no medical evidence as to how the incident had affected Dr Tan, Judge Harbison found that Dr Tan had "suffered acutely", was "terribly affected" by the harassment and had reacted, "unusually severe(ly)" to it "as a gross violation of her body and… trust". What is more, while Judge Harbison considered the incident was not the "worst one (could) imagine", Dr Xenos was in a powerful position in which he had "great influence" over Dr Tan's future career and qualification. she also found Dr Xenos had "deliberately and falsely denied the harassment" and sought to impugn Dr Tan's character. She noted that Dr Tan's capacity to enjoy her profession would be "significantly tarnished".

In addition to the significant damages award, Dr Xenos was ordered to pay one-third of Dr Tan's taxed costs.

VCAT can make costs orders when it is fair to do so, based on the consideration of a number of factors. In this case, costs were awarded because the hearing had been "unnecessarily lengthened". Many days had been spent on hearing evidence of Dr Tan's professional capabilities, introduced to support Dr Xenos' claim that the complaint was fabricated - a claim found to be unsubstantiated.

Implications

Damages awards in sexual harassment matters have by and large been fairly modest and contained. However, in recent times there has been an emerging trend of anti-discrimination tribunals and courts ordering more generous payouts.

In light of this decision in Tan and other like cases that are expanding the range of damages available in this jurisdiction, it is important that employers remain vigilant in preventing and addressing sexual harassment claims.

The policies and procedures of an employer need to, in a practical and real sense, be understood and adopted by staff from the top down. This means that those who are accountable within the organisation need to know how to identify when there is an issue (whatever the level of severity of the conduct) and understand what action should be taken in the circumstances. To that end, due diligence should be exercised regardless of the rank, seniority and standing of the person complained of. A failure to do so puts an organisation at significant potential risk.

Thanks to Millen Lo and David Collits for their help in writing this article.

This article was written when Joe was a partner at Clayton Utz and does not necessarily reflect his views as Vice-President of the Fair Work Commission.

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