Damages for discrimination set to increase substantially

Stephen Booth

We have previously commented on the sexual harassment case of Richardson v Oracle Corporation.

Our previous alert concerned the importance of employers having up-to-date and robust anti-discrimination and anti-harassment policies which take direct account of Australian legislation. 

Ms Richardson proved her case, and had been awarded damages for non-economic loss and damage, essentially “pain and suffering” and “loss of enjoyment of life” of $18,000.  This was within the “standard range” of $12,000-$20,000 for such damages, well established in previous discrimination cases.  There had been larger awards of damages, $90,000 - $100,000, in cases where the complainant could prove substantial and demonstrable psychological or medical problems arising from the harassment, but these cases were outside the more common run of cases where the “pain and suffering” and “loss of enjoyment of life” components fell short of that level.

Ms Richardson appealed against the level of damages awarded.

Ms Richardson’s damage consisted of distress and humiliation at the actions of the fellow employee, further distress and humiliation caused by the need to continue to deal with the offending employee (as a result of Oracle keeping the employee in a team within which she needed to have contact with him, albeit only by phone, while her claim was being investigated), damage to her relationship because of the distress caused by the harassing behaviour, and a need for counselling.  The distress occasioned noticeable change in Ms Richardson’s demeanour and physical symptoms and a “not insignificant” adjustment disorder with mixed features of anxiety and depression, which lasted as long as Ms Richardson continued to be employed by Oracle.  The Full Federal Court acknowledged that this damage was less severe than in the previous cases outside the general run of damages awards.

However, the Court reassessed the general range of damages appropriate in discrimination cases.  The Court then concluded that discrimination cases had become stuck in a time warp, because awards of general damages in other areas had increased substantially since these parameters were set, back in the 1980s, and community expectations of compensation in such a case had also increased substantially.  The Full Federal Court decided that Ms Richardson’s case merited general damages of $100,000.  It follows that in cases with severe demonstrable personal or psychological injury, general damages of substantially more will now be possible.

This means that the general area of discourse for damages, where sexual harassment is proved, will be substantially above the modest level which has applied to date.  This emphasises the importance for employers of having their houses in order if they are to avoid vicarious liability for the conduct of an employee by showing that they have done everything reasonably practicable to avoid such conduct in the workplace.  This means having robust and up-to-date policies, sufficient training on and communication of those policies to employees, and prompt and effective complaint-handling processes. 

Failure to do so will mean substantially greater exposure to damages, should a claim of sexual harassment arise.

For more information on workplace conditions and issues with inappropriate workplace behaviour please contact our experienced employment lawyer:

Stephen Booth, Principal
Phone: +61 2 9895 9222