Supreme Court awards $1.3 million in employer negligence case

by Victoria Bruce19 Jan 2016
Employers that fail to take action to protect their employees from workplace bullying and harassment could be sued for negligence, as has been proven in a recent decision by The Supreme Court of Victoria to award $1.3 million in compensation to a former road construction worker.

The court heard that co-workers and sub-contractors at Winslow Constructors sexually harassed, abused and bullied Kate Matthews during her two years engagement with the Victorian civil engineering company.
 
This included being shown pornographic material, making sexually explicit comments, calling her names, threatening to rape her and commenting on her appearance and anatomy.
 
Amber Sharp, Partner at Marque Lawyers says the implications of the Supreme Court decision should make employers stand up and take notice.
 
“There are three critical issues at play here for HR managers and employers,” Sharp told HC Online.
 
“Make sure you have a workplace policy that clearly articulates what is and what is not acceptable workplace conduct, make sure all complaints are investigated and make sure management lead by example,” Sharp says.

“In this particular claim, when the employee raised the matter, her supervisor allegedly laughed at her, which is not a very constructive response.”

Mathews, who has been diagnosed with several psychiatric conditions, including depression and post-traumatic stress disorder, told The Age that her cries for help were ignored or laughed off by her employer

Initially the company had denied liability but admitted negligence five days into a Supreme Court trial, leading to the Court awarding damages based on past economic loss, future economic loss and also general damages for pain and suffering, Sharp says.

“The Court accepted that Matthews had suffered, and continued to suffer, serious chronic psychiatric illness as a consequence of the treatment she received,” she says.

“It also found that she was unlikely to be fit to work again, using a retirement age of 65 in its calculations. On top, the Court awarded $380,000 in general damages.”

She says all workplaces need to have a workplace policy which clearly articulates what amounts to bullying conduct and sexual harassment conduct and also makes clear that employer does not tolerate that conduct. Companies also need grievance policies under which complaints can be investigated and dealt with and ensure staff are aware of these policies and their obligations.

She says managers play a key role in setting positive workplace culture by leading by example and not turning a blind eye to the behaviour of their workforce.

“Even if someone doesn’t make a formal complaint, employers still need to do something about it,” Ms Sharp told HC Online.

“HR managers who are working in environments that perhaps are more male-dominated need to pay particular attention to these issues because in the past there may have been more of a cultural acceptance of this conduct,” Ms Sharp says.

She said the Kate Mathews v Winslow Constructors (Vic) Pty Ltd [2015] was definitely a standout in terms of economic loss and the focus on the aspect of negligence.

Indeed, the $1.36 million payout for economic loss, pain and suffering is believed to be one of the largest of its kind in Victoria. 

In Nationwide News Pty Ltd v Naidu & Anor; ISS Security Pty Ltd v Naidu & Anor (2007) 71 NSWLR 471, which was also a negligence case based on failure to provide a safe place of work, the New South Wales Court of Appeal upheld a damages payout of $1.9m including $200,000 in general damages.

More recently, in Swan v Monash Law Book Co-operative (2013) 235 IR 63, the Victorian Supreme Court awarded $600,000 damages, including $300,000 in general damages, in a negligence action arising from workplace bullying and a finding that the employer failed to provide a safe place of work.  
 

COMMENTS

  • by Bernie Althofer 19/01/2016 2:17:41 PM

    It never ceases to amaze me to learn of situations where alleged bullies are apparently tolerated to the point of acceptance. It is even more alarming that whilst organisations may sound policies and procedures in place, employees are actively discouraged from lodging a formal complaint about the behaviour or the person. It seems that in some situations, those being targeted take a view that the alleged bully is 'protected' by 'someone' and that to take action against that person would be a career limiting move.

    It seems that whilst there is a reluctance on the part of some managers, supervisors and even co-workers to address bullying behaviours, there is also a perception that 'bullying is just part of what happens'. Unfortunately, as this case and no doubt others have found, the longer initial counterproductive behaviours are left unaddressed, the more damaging the fallout.

    As Courts, Commissions and Tribunals make decisions and findings that result in the 'million dollar payouts', managers and workers may also find themselves being drawn into line and be on the end of adverse comments. When 'million dollar payouts' or even any other Court ordered award is made, the money has to come from somewhere as organisations implement strategies to recover those losses.

    Perhaps organisations may need to consider placing a time frame in which incidents or allegations need to be investiged e.g. two weeks for preliminary investigations, or more depending on the nature and circumstances involved. There may also come a time when performance management and appraisal systems are actually used to hold people accountable for the way in which counterproductive behaviours are prevented, detected, reported and resolved in a workplace.

    How many organisations have pockets deep enough to afford not only the amount awarded by a Court, but also the damage to individual and organisational reputations?

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