General damages are now a significant component for damages awarded by a Court.
In July 2014 the Full Court of the Federal Court of Australia held that an award of $18,000.00 which had been made by a lower Court in a sexual harassment claim was manifestly inadequate and out-of-step with community standards: it increased the amount by $100,000.00 for general damages!
The employee claimed that she had been sexually harassed by a fellow employee based around comments that he had made to her which were also made in the presence of clients and other colleagues. The employee claimed the behaviour had caused her to suffer and develop an adjustment disorder.
The Federal Court initially awarded her $18,000.00 in general damages for her emotional suffering.
The Court found that the employer had not taken “all reasonable steps” to deal with the episodes of sexual harassment or to provide training and take steps to prevent harassment in the workplace.
Although the employer had policies in place, those policies did not state that sexual harassment was against the law and they did not identify the relevant legal standard.
Ultimately, the Full Court awarded $100,000.00 in general damages against the employer.
In awarding the higher amount, the Full Court said that it needed to take into account how other forms of damages were calculated in matters where there was no economic loss.
The Court looked at awards for damages in State anti-discrimination cases, breach of contract, misleading and deceptive conduct claims and observed that there was a gap in the level of awards in those types of matters and that typical compensation damages for victims of sexual discrimination were only between $12,000.00 and $20,000.00. The Court found that there was no real reason for such disparity and awarded the higher amount.
If the Court has gone as far as awarding general damages in a sexual harassment claim in the sum of $100,000.00, then think what it will do if it uses the same approach when making general damages awards for other forms of discrimination or harassment.
Whether or not you will be liable for damages claims approaching that amount will depend on the facts of each case.
If the Court wishes to extend the reasoning used in the case above, it may well increase general damages for “distress, hurt and humiliation” in other unlawful adverse actions brought by employees including other forms of discrimination, harassment or victimisation.
What can you do?
- If a complaint comes in, be proactive and deal with them as they come.
- Provide training for managers to identify the risks and monitor your own personal obligations to manage and prevent inappropriate conduct in the workplace.
- Train employees on policies.
- Monitor employee behaviour and take action.
- Put in place a regular review of workplace policies but particularly with regard to discrimination and harassment.
Although the case outlined above is at the extreme end of the scale, it is important to remember that merely thinking that it won’t happen or that an employee won’t take action under the anti-discrimination act is fanciful.
If you don’t want to be subject to a claim which could include damages approaching the amount outlined above, risking both your business and your family home, then think again and seek advice early.