Why an anti-discrimination policy alone is not enough to protect an employer

Many employers find out too late that anti-discrimination law at both state and federal level deems the employer responsible, and equally liable, for the conduct of its employees.

In general terms the only defence available to the employer is that it took “reasonable steps” to prevent a breach of the law occurring. The onus on employers has been reinforced in changes to Victoria’s equal opportunity law which came into effect in August 2011, which impose a duty upon employers to actively prevent discrimination and sexual harassment in the workplace.

The next question that employers will have for their advisers is what, exactly, constitutes “reasonable steps”? A recent case in the New South Wales Administrative Decisions Tribunal provides useful guidance about what an employer should do to avoid vicarious liability for the unlawful acts of employees.

A male employee of Western Area Local Health Network was found to have breached the NSW Anti-discrimination Act when he passed a sexually explicit note to a female fellow employee. While the note was not specifically directed to the employee she became distressed upon reading the content and reported the matter to police and to her manager. The Tribunal had little difficulty concluding that the acts of the male employee constituted sexual harassment. The employer claimed that it had taken reasonable steps to prevent the conduct.

Evidence was given that the WALHN had, over the course of approximately seven years, required the male employee to acknowledge receipt and understanding of, and his agreement to be bound by, the employer’s Code of Conduct. The Code of Conduct contained policies specifically outlining that sexual harassment was not acceptable. The employee had also undergone compulsory training in relation to the content of the relevant policies on four occasions in a period of less than 12 months prior to the incident.

The employee argued that it was not enough that the employer had implemented the policies. The Tribunal noted that, in line with previous case law, the employer must take active steps to ensure that employees comply with the policies. In this case, it was satisfied that the WALHN had taken reasonable steps to do so. The employer was absolved of liability.

The case not only illustrates that employers need to be comprehensive in their efforts to educate employees about unlawful discrimination and harassment. It also demonstrates that a “one size fits all” approach will not necessarily be accepted as sufficient to show that the employer had taken reasonable steps to prevent the unlawful conduct.

The male employee in this case had a “clean” record and the incident was viewed as a one off instance. Comparison was made by the Tribunal to other cases where the employee complained of having engaged in a pattern of unlawful conduct, which the employer had failed to act to prevent. In a case such as that, the implementation of policies and training was not sufficient. In the WALHN case, it had investigated the complaint of the female employee promptly and taken disciplinary action against the male employee. Comparisons can be made to other cases where the employer has failed to engage in an appropriate investigation or resolution process to avoid the unlawful conduct.

The lesson for employers is that having anti-discrimination policies is not enough. Training employees regularly about those policies might also not be enough. Employers have to be tough with suspected breaches of policies and show employees that they are serious about enforcing them.

Peter Vitale is a lawyer who has his own practice focussed on employment and industrial relations law. Find him at www.petervitale.com.au