Two words of vital concern to all employers: Vicarious Liability

Discrimination and harassment have become widespread, serious issues in the workplace. Many employers are unaware they may be legally responsible for their employee's misconduct if they fail to take "reasonable steps" to address those issues.

This is called Vicarious Liability and all employers - regardless of size - should be aware of it. Federal and State anti-discrimination laws clearly state that an employer is legally responsible for the conduct of their employees.

Employers who fail to take "reasonable steps" to prevent employee misconduct face severe penalties. Earlier this year, a young woman was awarded $15,000 after a court found she had been sexually harassed while working as a teenager at a KFC outlet in western Sydney. The young woman made 10 complaints alleging sexual harassment by an assistant manager. The assistant manager was found to have shown her pornographic images and made "suggestive" comments.

The young woman complained to her boss in May 2007 and did not return to work. The next day she lodged a complaint of sex discrimination and sexual harassment against her former employer, QSR Pty Ltd, trading as KFC Punchbowl.

The Administrative Decisions Tribunal awarded her the money after finding the company "vicariously liable" for its employee's conduct. The company lost its appeal against the decision.

Under current legislation an employer may be vicariously liable for the conduct of:

• Individual employees or groups of employees
• A job applicant
• Directors, supervisors or managers
• Workplace participant (where two people work on the same premises, but have different employers)
• Agents (eg insurance salespersons operating on a company's behalf)
• Contract worker or person who is being paid commission
• A partner of a company harassing another partner
• Members of organisations that grant occupational qualifications
• A person employed by a trade union harassing a member
• A person operating an employment agency who harasses someone who uses the agency.

The Vicarious Liability provisions of the legislation only apply where the alleged discrimination and harassment occurs in connection with the person's employment. This means the employer may be held "vicariously liable" for the actions of employees if they have not taken reasonable steps to prevent the discrimination and harassment from occurring.

Employers are not only responsible for workers in the general work environment, but also at events such as seminars, conferences, work functions, Christmas parties, business or field trips.

The Vicarious Liability provisions of the legislation also apply to individuals who may be liable for their own discriminatory or harassing behaviour in the workplace or in connection with their employment.

In some cases both the employer, who has not taken reasonable steps to prevent the discrimination and harassment from occurring, and the individual, who is the alleged discriminator or harasser will be held jointly liable for the behaviour.

Managers and supervisors should be aware it is not an excuse for an employer to say: "I didn't know it was happening". Even if the event occurs without the knowledge of an employer, if "reasonable steps" have not been taken to prevent the event happening, the employer may still be liable.

Employers should be aware of steps that can be taken to reduce their liability.

This may include:

• Preparing and promoting a written policy on workplace discrimination and harassment
• Training staff to identify and prevent workplace discrimination and harassment
• Establishing an effective internal complaints procedure
• Appointing trained harassment contact officers
• Treating all complaints seriously and investigating them promptly
• Ensuring that appropriate action is taken to address and resolve complaints
• Monitoring the workplace environment and culture, such as holding staff surveys or reviewing recruitment practices
• Providing employees who have harassed other staff members with information and training to ensure the discrimination or harassment does not occur again.
• Providing employees who have been discriminated against or harassed with access to counselling services or employee assistance programs (costs should be fully borne by the employer)

Employers must be aware of their responsibilities to ensure the working environment or workplace culture is not "sexually or racially permeated or hostile".

Examples of a potentially hostile working environment are where pornographic material is displayed, crude conversations or innuendo and offensive jokes are part of the culture. A person has the right to complain about a "hostile" working environment even if the material or employee conduct in question is not specifically targeted at them.

The Human Rights and Equal Opportunity Commission (HREOC) can advise employers of their responsibilities to prevent harassment and discrimination in the workplace.

About the author

Harriet Stacey is co-founder and principal of Wise Workplace Investigations. She is one of Australia's leading authorities in investigative interviewing. Harriet specialises in corporate investigations and disciplinary processes.  She has been involved in more than 100 investigations since the company's inception - predominantly in the NSW public sector. For further information Ph: 02 8243 1133 or visit
www.wiseinvestigations.com.au

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