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Sexual harassment unwelcome Christmas present

THE DOMINION POST - MONDAY, 6 DECEMBER 2010


The round of Christmas parties in the district is now in full swing. Have you ever greeted your employees or co-workers with a peck on the cheek or did you get carried away at that work function and make a sexual innuendo in jest? Beware the cost may be high.

Two recent sexual harassment cases in Australia have captured the international press and attention of employers around the world. The first case embroiled one of Australia's most prestigious and largest department stores, David Jones. The other involved PricewaterhouseCoopers Australia (PwC), one of the world's largest providers of audit, accounting, tax, and business consulting services.

Many readers will have visited the flagship David Jones store. The store is the Australian equivalent of Wellington's Kirkcaldie and Stains. It showcases the best wares that Australia has on offer. David Jones is a household name in Australia and to a lesser extent, New Zealand.

Kristy Fraser-Kirk, a publicist at David Jones, alleged that during her employment she was sexually harassed by Mark McInnes, the former chief executive officer and director of David Jones. Ms Fraser-Kirk complained that Mr McInnes made unwelcome sexual advances and placed his hand under her clothing. Following the allegations by Ms Fraser-Kirk, Mr McInnes stepped down as CEO and admitted behaving in a manner unbecoming of a CEO. Ms Fraser-Kirk sued David Jones Limited, Mr McInnes, the new director and CEO of David Jones (who was the former group manager) and all of the directors of the David Jones board. She set her sights high and sued them for more than A$35 million. I understand the case eventually settled out of court for around $850,000, a tidy sum.

I believe that the Australian law firm that took the case, Harmers, brought proceedings in court seeking exemplary damages. Ms Fraser-Kirk's solicitors saw it as a case of poor corporate governance or management. As the case was settled the allegations were never tested.

In another high-profile Australian case, Christina Rich, a former PricewaterhouseCoopers partner, sued PwC for their "boy's club" culture of harassment, victimisation and bullying. PWC vigorously denied the veracity of the claims. In particular, Ms Rich alleged that her boss, Mr Edwards, against her objections, would greet her with a kiss on the cheek and placed suggestive and offensive handwritten notes under her door while they attended a Santa Monica conference. In addition, Ms Rich alleged that another partner groped her breasts at a work function and another spoke of her breasts while discussing her work. Ms Rich sued PwC some years ago and sought A$11m in compensation. After four years and lengthy negotiations, the settlement sum could have been around A$6m, although the actual figure will remain confidential in accordance with the agreement. Again, as the case was settled the allegations were never tested.

Readers will be well aware that most things on the other side of the Tasman tend to yield a much higher return than in New Zealand. The same applies to litigation. If you have been sexually harassed, don't look for $6m for a settlement in New Zealand.

Under New Zealand law employers have an obligation to provide a safe work environment for their employees, and this includes keeping them safe from sexual harassment. Workers must be treated fairly and reasonably and in a way that promotes trust and confidence. An employer is liable for sexual harassment committed by one employee to another in the course of employment. An employer can defend a claim by proving that it had taken all "reasonably practicable steps" to provide a safe workplace.

"Reasonably practicable steps" would include things such as education, training, policies and published methods by which an employee might seek assistance or pursue a complaint. An employee can either proceed under the Human Rights Act or under the Employment Relations Act. While both acts provide definitions of "sexual harassment", it can be difficult to define and prove.

In a recent New Zealand case, an employee and employer were found liable for the sexual harassment of an aggrieved employee. Given the nature of the proceedings, the parties' names were suppressed, so we shall call them Mary, John and Sue. The perpetrator of the harassment, John, was an employee and one of the partners of a cafe, the other partner was his wife Sue. Mary was an assistant at the cafe. Mary resigned saying that that John had made the work environment unbearable because of his physical touching and sexual comments. The problem began when John made innuendoes towards Mary and things got progressively worse. There was a series of incidents in which John touched Mary in a sexual way, paid special attention to her, and made comments that caused her to feel uncomfortable.

The case was heard before the Human Rights Review Tribunal under the Human Rights Act. The definition of sexual harassment in the act is behaviour that is of a sexual nature and unwelcome and offensive to the complainant. This threshold was clearly satisfied on the evidence and accordingly the tribunal made a declaration that John had breached the Human Rights Act. It awarded Mary $9000 for financial loss and $10,000 for loss of dignity, humiliation and injury to her feelings. John and Sue, as partners of the cafe, were liable to pay. Interestingly, the tribunal also ordered John and Sue to attend a Human Rights Commission-led training programme designed to assist individuals in identifying and addressing sexual harassment in the workplace. The tribunal commented that it did not think the case was one of sexual predation in that John did not have sexual intentions towards Mary. The tribunal said the case highlighted the dangers of running a business without any understanding of the provisions of the Human Rights Act relating to sexual harassment and without any understanding that such behaviour can be unwelcome to others.

Workers who have been sexually harassed in the workplace are often reluctant to take action. They feel embarrassed about what has occurred and are reluctant to take a case against their employer or former employer. However, the embarrassment felt by the employer is likely to be much greater and there is the prospect of a relatively high settlement through mediation. Both Australian cases had a negotiated settlement. Although settlements of this nature are not as high in New Zealand, there have been some fairly significant settlements for sexual harassment. At the end of the day it is often better for a worker to challenge what has happened and seek reasonable redress, rather than suffer in silence and regret it.

Christmas parties are a welcome celebration of the year's work and of the festive season. Don't let people ruin the evening by crossing the line, it may be expensive.

Cullen - The Employment Law Firm is one of only eleven law firms in New Zealand approved to provide employment law services to Government and the public sector.

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