4 April: Workplace Relations Update for Executives On-the-Go

In this edition:

  • Worker awarded $1.36 million in damages following abuse, bullying and sexual harassment;
  • Company breaches privacy laws by unlawfully obtaining and distributing tax file number;
  • Employers allowed to spy on workers’ personal emails in Europe; and
  • Don’t treat employees’ safety breaches differently: Fair Work Commission.

Worker awarded $1.36 million in damages following abuse, bullying and sexual harassment

The Supreme Court of Victoria has awarded the former worker of a large construction company $1,360,027 in damages after repeated sexual harassment. The worker, Ms M, worked at the company, WC Pty Ltd (WC), for two years and was subject to sexual comments and occasionally violent threats as part of her work as a labourer. Justice Forrest found that Ms M sustained “very considerable psychiatric injuries as a direct consequence of the bullying, abuse and sexual harassment levelled at her by employees and subcontractors” of WC. WC admitted negligence and only contested the quantum of damages.

Workplace harassment

Ms M worked at WC from August 2008 to early July 2010. During this period, her colleague CH made several offensive and threatening statements to her, including “I will take you into the container and f*** you”, “you have a great f****** a***” and, after Ms M said she was going to lunch in July 2010, “I am going to follow you home, rip your clothes off and rape you”.

When Ms M complained to her foreman about an offensive comment, he laughed in response. When she complained to the Area Site Manager, she was told to leave the matter with him. No other response was given, until she was moved to another site for nine months. After this period, she was transferred back to the team where she had complained of harassment.

Psychiatric injuries

Ms M did not return to work after this incident and saw several psychologists. She has alternatively been diagnosed with:

  • Bipolar disorder II together with chronic post traumatic stress disorder (PTSD); or
  • a major depressive illness together with chronic PTSD.

Justice Forrest found that, on either diagnosis, Ms M had “suffered chronic and significant psychiatric injuries that have and will continue to diminish the quality of her life”. Her mother and partner both gave evidence that she underwent a significant transformation during her time at WC from a “bright, bubbly, confident young woman” to a woman who lacks motivation, spends a lot of time in bed and breaks down around four times a week.

Legal liability

WC admitted liability in this case, and so the only issue in contention was the extent of Ms M’s psychiatric injuries. It is clear that the harassment was unacceptable and, if the culture of the company permitted the conversations or comments to occur, Ms M was denied her right to a safe workplace.

Alongside the comments themselves, the failure of WC to effectively address Ms M’s complaints represents a serious breach in their duties as employers. Ms M stated that one of the reasons why she was wary of complaining about the conduct was that her supervisor participated in the abuse and bullying. When she complained about the behaviour to the Area Site Manager, she was not informed of any outcome and was moved to a different team. She was then moved back to the team, and was subjected to abuse when she complained.

WC failed to create a safe working environment for Ms M and, when they became aware of the harassment, failed to adequately address the issues.

Lessons for companies

Such egregious examples of sexual harassment should be clearly forbidden by all organisations, with clear systems in place to deal with any breaches. The victim should not be forced back into an environment in which they are uncomfortable, and there should be multiple avenues for lodging complaints to cope with the possibility that the first point of contact is implicit in the inappropriate behaviour. The high level of damages reflects the seriousness with which the Court approaches breaches as sustained and harmful as these.


Company breaches privacy laws by unlawfully obtaining and distributing tax file number

The Acting Australian Information Commissioner, Timothy Pilgrim, has found a life insurance provider (LIP) liable after it obtained the tax file number (TFN) of the husband of one of their insureds, Mrs X. The process by which the TFN was collected and LIP’s subsequent distribution of the information constituted a breach of National Privacy Principles (NPP) 1.5 and 4.1. LIP was ordered to apologise in writing to Mr X and to pay $10,000 in compensation. As the Office of the Australian Information Commissioner’s (OAIC) investigation commenced in December 2013, the matter was decided under the Privacy Act 1988 as it existed prior to the 2014 amendments which introduced the 13 Australian Privacy Principles (APPs).  The APPs that are similar to the NPPs in question are APP 5 Notification of the Collection of Personal Information and APP 11 Security of Personal Information.

The breaches

The actions of LIP relate to a claim that was lodged by Mrs X in 2005 in which she emphasised that her husband valued his privacy and did not wish to have his information collected. LIP stated that they had waived any requirements for Mr X to provide his personal information. Despite this, LIP’s forensic investigator obtained Mr X’s prior tax returns from the couple’s former accountant and failed to disclose this to Mr X. Following Mrs X’s 2010 complaint to the Financial Ombudsman Service (FOS) regarding LIP’s handling of her claim, LIP provided documentation to the FOS that included unredacted copies of Mr X’s tax returns.

Acting Commissioner Pilgrim found that LIP had breached its obligations under the NPPs by obtaining the information without notice and by providing that information to a third party without permission. It was noted that, although the company had policies in place relating to the handling of personal information, these were not followed in this instance.

A failure of internal policy?

In this case, LIP reported that it had a policy in place to ensure that information that was passed to third parties had all sensitive information redacted. Not only did this not occur, LIP was criticised by Acting Commissioner Pilgrim for failing to retain records relating to the transfer of information. It was argued that LIP should have retained either a copy of the information passed onto the FOS, or at least kept records of the completion of procedures such as the redaction of sensitive information. The implementation of effective privacy policies and procedures is contingent on the organisation having the capacity to demonstrate their compliance.

Consequences for other organisations

This case demonstrates the importance placed by the OAIC on organisations not only on creating an appropriate privacy policy, but on ensuring that it is implemented within the organisation’s procedures. LIP was required to issue an apology and pay $10,000 in compensation, based purely on the non-economic losses suffered by Mr X. If the complainant had proved financial loss, this could have been a much greater sum.

Breaches such as this do not only carry financial risks for companies. An insurance provider such as LIP trades on its reputation and requires clients to disclose personal and sensitive information in order to properly function. If the organisation is found to mishandle the personal information of clients, it can cause serious reputational damage with severe consequences for the business as a whole.


Employers allowed to spy on workers’ personal emails in Europe

The European Court of Human Rights has handed down a decision that employers can view workers’ emails including personal messages with loved ones during work hours. The case was brought by a Romanian man who was dismissed after his employer viewed his private chats.

Joint head of employment law at Lewis Silkin in London has said that this case is significant for a number of European countries. It also raises some interesting issues when compared with Australian law.

The case concerned the dismissal of a Romanian national by his employer, a private company, for having used the company’s internet for personal purposes during working hours in breach of the company’s policy. The man was employed at the company between August 2004 and August 2007.

When the worker commenced work at the company, his employer requested that he create a Yahoo Messenger account for the purpose of responding to clients’ enquiries. In July 2007, the worker was informed by his employer that his Yahoo Messenger communication had been monitored for the past week and that the records showed he had used the internet for personal purposes. The worker initially denied the allegation, but was then shown the transcript of conversations he had had with his brother and his fiancée relating to personal matters. He was dismissed for using company resources for personal purposes.

The worker challenged the decision before the courts on the ground that his employer had violated his right to correspondence in accessing his communications in breach of the European Convention on Human Rights. Article 8 provides a right to respect for one’s “private and family life, his home and his correspondence”.

His complaint was dismissed at first instance because his employer had complied with the dismissal proceedings provided by the European Labour Code and the worker had been sufficiently informed of the company’s policies. The worker then appealed the decision, asserting that emails were protected by Article 8.

The Romanian Court of Appeal dismissed the appeal, relying on European Union law and held that the employer’s conduct was reasonable. The Court found that the monitoring of the worker’s communications has been the only method of establishing whether there was a disciplinary breach of company policy.

The worker then applied to the European Court of Human Rights (ECHU), relying on Article 8 and complaining that his employer’s decision to terminate his contract had been based on a breach of his privacy.

The ECHU found that Article 8 was applicable to the case however it did not find it unreasonable that employer would want to verify that employees were completing their professional tasks during working hours. The ECHU also noted that the employer had only accessed the worker’s account in the belief that it contained client-related communications.

Therefore, it was held that the employer’s monitoring of the worker’s communications had been reasonable in the context of disciplinary proceedings.

Mr Burd of Lewis Silkin said the most significant part of this finding by the ECHU was that the employer was not only permitted to access the Yahoo account, but also to use the contents of what was found against the employee.

This case acts as a prompt for Australian organisations to review the wording of their social media and email privacy policies. Some organisations will have policies that explicitly prohibit personal use of computer systems such as the internet and email, while others will allow for ‘reasonable personal use’ of these systems. These policies need to be clearly written and communicated to all employees.

It is up to employers to decide the stance to take on this issue as there is no legal obligation to influence best practice. You may face legal repercussions however if your policy is not explicit or is not communicated sufficiently to staff and an attempt to enforce a ban, or partial ban, of employees using company systems is made.


Don’t treat employees’ safety breaches differently: Fair Work Commission

The Fair Work Commission has ruled that Jetstar must reinstate a 60-year-old engineer who committed safety breaches because it had applied its safety policies inconsistently in the past.

Jetstar dismissed a licensed aircraft mechanical engineer at Avalon Airport for driving an airport “tow-tug” on a public road to pick up some lunch from a nearby service station.

The Jetstar van usually available had broken down and the employee believed that he could not obtain lunch without leaving the Airport. It was well known to employees that the tow-tug was not permitted to be used on a public road as it was not registered and was not equipped with adequate safety protections to drive on a public road. Mr Gill was found to have breached Jetstar and Qantas policies.

The employee admitted the conduct, and the Commission was satisfied that the misconduct was a valid reason for his dismissal.

Valid reason but harsh

The Commission found that while there was a valid reason to dismiss, and Jetstar had followed appropriate procedures in investigating and dismissing Mr Gill, the Commission took into account that Jetstar had not dismissed other employees who had breached safety protocols.

Examples of safety breaches which appeared to be far more serious, for which Jetstar did not dismiss employees, included:

  • an engineer signed off on a safety check without undertaking a mandatory check resulting in a plane having to make an unscheduled stop when an engine oil cap was not fitted; and
  • during safety testing, main landing gear was not safe-tied, resulting in the main landing gears swinging up and missing an apprentice by inches – the employee had a formal warning placed on their file.

On this basis the Commission found that Mr Gill’s dismissal was harsh and he was unfairly dismissed.


Compensation is only available as a remedy for unfair dismissal where the Commission is satisfied that reinstatement is inappropriate.

Jetstar argued that reinstatement was not appropriate as the serious nature of the misconduct and the safety critical job role meant that there was a loss of trust and confidence. However, the Commission found that:

  • Jetstar continued to maintain trust and confidence in the employees involved in other more serious safety breaches who were not dismissed;
  • Mr Gill had an unblemished record, accepted his wrongdoing and had shown contrition;
  • there was no evidence that suggested similar conduct would be repeated; and
  • Mr Gill would have great difficulty obtaining other employment.

The Commission ordered that Mr Gill be reinstated to Tullamarine Airport as Jetstar was said to have a greater capacity to absorb Mr Gill back into the workforce at Tullamarine Airport rather than at Avalon Airport and also because reinstatement to Tullamarine Airport was said to allow for closer supervision and monitoring of Mr Gill. Mr Gill was not compensated for lost pay during the period between the dismissal and the Commission’s decision.

Note for Employers

Even where the safety policy is clearly known to employees, and an employer follows procedural fairness in investigating and dismissing an employee, where it is not clear that safety breaches will always result in dismissal, it can be held to be harsh and unfair to dismiss an employee. In this case the employee’s age and anticipated difficulty in finding alternative employment were further factors which led to a decision to reinstate.

See the full Fair Work Commission decision here.


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