Oracle ‘vicariously liable’ in landmark harassment case

by Iain Hopkins05 Mar 2013

In a case which has dragged on for more than three years, software company Oracle has been found vicariously liable over the actions of one of its senior employees.

The long-running sexual harassment suit ended last week with an order for Oracle to pay $18,000 in compensation to a former worker who was systematically harassed by a senior colleague in 2008.

Alleged comments made on separate occasions included, “[You] and I fight so much, I think we were husband and wife in our last life,” and, “How do you think our marriage was? I bet the sex was hot.”

The Federal Court of Australia found Oracle "vicariously liable" for the senior employee’s conduct – yet Justice Buchanan did not agree the plaintiff had suffered economic loss as a result of that inappropriate conduct. Buchanan did however find the conduct was persistent and callous, with the intention to demean and humiliate.

According to the Victorian Chamber of Commerce and Industry (VECCI), this case has significant ramifications for all businesses regarding their workplace harassment policy statements.

Though the software company had a Code of Ethics and Business Conduct policy that all employees received, and which was referred to in their employment contracts, the policy was found to be inadequate as it did not explicitly state that sexual harassment was against the law; nor did it spell out under which relevant legislation it was unlawful – a breach of the 2004 guidelines published by the then Human Rights and Equal Opportunity Commission. “In my view, advice in clear terms that sexual harassment is against the law, and identification of the source of the relevant legal standard, is a significant additional element to bring to the attention of employees in addition to a statement that sexual harassment is against company policy, no matter how firmly the consequences for breach of company policy might be stated," Justice Buchanan said.

Buchanan concluded that the omission of these important aspects from the employer’s own policy statements was a sufficient indication that the company had not taken “all reasonable steps” to prevent sexual harassment.

“The decision not only serves as a warning to businesses to ensure workplace harassment and bullying policies are compliant and up to date; it also contains some important lessons about what may be considered in sexual harassment claims and the employer’s defence that ‘all reasonable steps’ to prevent sexual harassment were taken,” VECCI stated.

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