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Management Liability – Are you covered?

May 7, 2013

Management Liability is an essential cover for business – even for those that do everything right.

In a recent decision in the NSW Administrative Decision Tribunal an employer escaped vicarious liability for taking ‘reasonable steps’ in a sexual harassment claim.

The Tribunal decided that employer; Western Area Local Health Service (WALHS) was not vicariously liable for the actions and conduct of one of its male workers who sexually harassed a female colleague.

 

Cooper v Western Area Local Health Network [2012] NSWADT 39

The claim involved female co-worker (Ms Cooper) being handed a note after a training day and before dinner by a male co-worker (Mr Locke). The note contained ‘extremely sexual explicit material – with no images.’ It was unclear who the author of the note was and there was no clear indication as to whether it was originally intended for Ms Cooper.

Prior to the incident Mr Locke and Ms Cooper had worked together for a period of about five years and were to some extent ‘friends’ – they had attend social gatherings together.

Throughout the hearing, Ms Cooper said that she believed the note was intended for her and written by Mr Locke. However, the tribunal accepted the evidence of Mr Locke and found that the note was written by another person and taken from his laptop without his knowledge.

Mr Locke gave conflicting evidence at the hearing and this was one of a number of difficulties the tribunal found with evidence. The other difficulties included:

Lack of reasonable explanation as to why Mr Locke gave Ms Cooper such a ‘inflammatory document’ to her in a public setting

No credible explanation why Mr Locke gave Ms Cooper the note.

As a result, the tribunal accepted that Mr Locke was not the author of the note, however, they were ‘unable to come to any reasonable explanation as to why, in fact, the note was given to Ms Cooper’

The tribunal noted that it ‘wasn’t to his credit’ to say that ‘Ms Cooper was the author of her own misfortune in picking up the note of her own volition to take home to read.’ Accordingly, the tribunal was satisfied the conduct fell within the scope of s22B of the Anti-Discrimination Act 1977 (the section governing harassment of employees).

Once a complaint is substantiated, the tribunal has the power to award damages. The limit to the award is $100,000.

The tribunal awarded $10,000 damages payable by Mr Locke.

But the employer still had to pay their own legal expenses.


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