By Gaby Grammeno Contributor

The Federal Court has ordered a Sydney jeweller to pay a record amount of general damages for sexual harassment and victimisation, and criticised the ‘intimidatory and vindictive’ language used by his lawyers

The woman was employed by a small business manufacturing and selling fine jewellery. She began in a customer service role and then took on more responsibilities as a production manager. The company’s sole director – with whom she shared an office – was a jeweller and designer.

In the five years she was employed there, she claimed she was sexually harassed by the director over a period of about 22 months, and then victimised for complaining about it.

Did the conduct amount to sexual harassment?

The manager’s relationship with the director began well as they initially had a good rapport. Over time, however, it became apparent that the director wanted the relationship to take a more personal, intimate turn, which was wholly unwelcome to the manager. She made it clear she was not interested in a romantic relationship with him.

Nevertheless, he persisted with the unwanted attention, making comments about her appearance, praising her body, and giving her numerous gifts including rings, necklaces, and other items, as well as a $2000 ‘early Christmas bonus’.

This seemed acceptable at first, given the culture of generosity and gift-giving at the business, but when it began to appear that she was receiving special treatment and that some of the gifts were too extravagant, she started to feel increasingly uncomfortable and awkward. However, she was worried about seeming rude or ungrateful and didn’t want to jeopardise her working relationship with him. She offered to pay for the items on a number of occasions, but he always refused payment.

She started to feel anxious and trapped, that she was in a difficult position and had to placate her boss to keep her job.

In July 2019 as she was walking through a doorway, the director slapped her buttocks, causing her to feel embarrassed and ‘extremely uncomfortable’ but she tried to laugh it off because he was her boss.

Early in 2020, he said he had ‘feelings’ for her. She told him she didn’t feel the same way, and reminded him that she was in a relationship. She felt overwhelmed, uncomfortable, and anxious about an international business trip they were soon to take. She told him she wanted to put down some boundaries and keep things between them work-related. In June of that year, he again spoke of his feelings for her and she again rebuffed him, which caused her great emotional discomfort. She took some time off work and then returned briefly, but the working relationship with the director deteriorated, and she last attended work in August 2020.

She became depressed and anxious, with disturbed sleep, reduced energy, poor concentration, lack of motivation, loss of appetite, and a reduction in social contact, and broke up with her partner. She sought help from her GP, who put her on a mental health plan and referred her to a psychologist for therapy.

She finally resigned from her job on 6 April 2022, grieving for the loss of her career and the damage she perceived had been done to her reputation.

Because of this, she decided to lodge a formal complaint with the Australian Human Rights Commission. After she told her boss of this decision, letters from his lawyers denied the substance of her complaint, accused her of being manipulative, demanded the return of various items he’d given her, and threatened to report her to the police if she did not.

The manager sought legal advice, considering that the tone of the letters from her boss’s lawyers was disrespectful, belittling, and offensive, which made her feel overwhelmed and ‘incredibly anxious’ that she’d been accused of theft. She later returned several gifts.

She filed her complaint with the AHRC in November 2020, alleging that he’d engaged in unwelcome conduct of a sexual nature and that she’d been victimised by his response to her complaint, and seeking various forms of relief including damages from the company and its director.

The case was heard in the Federal Court of Australia, where the claims were vigorously contested.

The court’s findings

Justice Anna Katzmann noted that context is all-important when deciding whether particular incidents or actions amount to sexual harassment, and that the circumstances must be such that a reasonable person would have anticipated the possibility that the person would be offended, humiliated, or intimidated.

The manager was cross-examined at length, and by and large Justice Katzmann found her an impressive witness – appearing to answer the questions honestly and never defensive, evasive, or aggressive.

In contrast, the director became defensive when inconsistencies in his evidence were pointed out. He failed to make reasonable concessions and was at times aggressive in his responses, often evasive and unwilling to give direct answers to simple questions.

She reasoned that the director’s account of the bottom-slapping incident – that it had been merely an accidental brush of his hand against her dress – was not credible because it was inconsistent with his having twice apologised for it. The slap on the bottom clearly amounted to sexual harassment.

The judge was persuaded that most of the gifts the manager received after July 2019 were expressions of the director’s affection for her and his desire to enter into a romantic relationship with her and were therefore either a sexual advance or other conduct of a sexual nature. ‘In substance, they were part of an attempt to woo her.’

Similarly, the judge considered the director’s comments about her appearance and body amounted to ‘other unwelcome conduct of a sexual nature’.

The judge found that the director sexually harassed the manager when he declared his feelings for her in January 2020, implicitly inviting her to enter into an intimate personal relationship with him when she neither solicited nor welcomed it; and when he revived the subject in June 2020 despite knowing she was not interested in such a relationship.

The judge observed that sexual harassment can cause significant harm that may be felt immediately, emerge over time, and/or result in long-term trauma. She noted that the manager was a sensitive person with a predisposition to anxiety which made her vulnerable or susceptible to the ‘chronic adjustment disorder with mixed anxiety and depressed mood’ psychiatrists had diagnosed.

She found that the sexual harassment she experienced was the principal, if not the only, cause of her psychiatric disorder. She accepted that her symptoms became disabling over the next couple of years and that as a result she was incapacitated for work during that period.

Justice Katzmann also found that the director had contravened s 94(1) of the Sex Discrimination Act 1984 which prohibits victimisation, as his reaction and the ‘intimidatory and vindictive’ language of his lawyers’ letters caused the manager the ‘detriment’ of embarrassment, offence, humiliation, and distress.

Both the director and his company were liable for the loss and damage caused by the sexual harassment, and the director for the loss and damage caused by the victimisation.

The court awarded the manager a total of $268,233.64, including $140,000 in general damages, $40,000 for victimisation and $15,000 in aggravated damages, as well as $23,070.75 and $46,284 respectively for past and future economic loss, and $3000 for out-of-pocket expenses.

What it means for employers

Employees who complain of sexual harassment should never be subjected to intimidation or aggressive reactions to deter them from pursuing their legal right to lodge formal complaints.

Read the judgment

Taylor v August and Pemberton Pty Ltd [2023] FCA 1313 (31 October 2023)