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Organisation held vicariously liable for the conduct of employees

February 2016

A recent decision of the Northern Territory Anti-Discrimination Commission reinforces that organisations may be found to be vicariously liable for their employee’s conduct where it is not demonstrated the organisation took “reasonable steps” to prevent discrimination.

In the recent decision noted Commissioner Rice awarded compensation to the applicant totaling $12,000.  Commissioner Rice also determined that the employer was vicariously liable for the conduct of its employees as it had not taken “all reasonable steps” to prevent the respondents from engaging in discriminatory conduct. In this case the employer was ordered to pay the applicant $4,000.

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What do ‘reasonable steps’ look like for an organisation?

In the event of a claim of harassment, bullying or discrimination – your organisation may be required to show that is took reasonable steps to help prevent the incident.

The term ‘reasonable steps’ is not defined in legislation. What could be construed as reasonable for a large corporation may not be reasonable for a small organisation. For example, a large multinational would be expected to have taken many steps to minimise discrimination and harassment occurring – whilst for a small business, only having taking a few steps could be viewed as reasonable. What is reasonable is determined on a case-by-case basis. The following matters are considered:

  • The size and structure of the organisation
  • Available resources
  • The nature of the work undertaken
  • Gender imbalances in the workplace
  • The employment of women in non traditional areas
  • The number of junior staff
  • The workplace culture
  • Cultural diversity in the workplace
  • Any history of harassment
  • Any relevant provisions in industrial awards or agreements
  • Working hours
  • Level of supervision
  • Any other relevant factor, such as geographic isolation of the work location, duties which require working in close physical proximity, live-in arrangements, etc.

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What is vicarious liability?

The Human Rights Commission states:

that an employer may be legally responsible, and thus liable, for discrimination and harassment which occurs in the workplace or in connection with a person’s employment, unless it can be shown that the organisation has taken all reasonable steps to prevent the unlawful behavior occurring.  This legal responsibility is called Vicarious Liability.

Vicarious liability does not exclude individuals from being held liable.  That means you, as an individual may be liable for damages in the event of a claim being successfully made.  In the example above the two individuals have been ordered to pay $6,000 and $3,000 each.

Where is Vicarious Liability applicable?

The Human Rights Commission states:

The vicarious liability provisions of the legislation only apply where the alleged discrimination and harassment occurs in connection with the person’s employment. This means the employer may be held vicariously liable for the actions of employees if they have not taken all reasonable steps to prevent the discrimination and harassment from occurring both within the usual work environment and at employer events, such as sponsored seminars, conferences, work functions, Christmas parties, business or field trips.

Top 3 tips for Organisations

Regardless of size, all organisations must actively implement precautionary measures to ensure it can demonstrate it has taken ‘reasonable steps’. These should include:

  1. Having a well-developed and communicated policy
  2. Ensuring that all employees receive good quality training
  3. Having managers, at all levels,  role model appropriate behavior

Top 3 tips for for Managers

  1. Role model correct workplace behaviors
  2. Take action if you see inappropriate behaviors
  3. Respond appropriately to reported behaviors

e Compliance Training I Designed for all devices I Sexual Harassment EEO Bullying Training

eCompliance Training offers a range of online compliance training presented in an engaging manner to help employees understand the importance of avoiding inappropriate behaviours that put an organisation and its employees at risk including:

  • Equal Employment Opportunity (EEO)
  • Workplace Bullying
  • Harassment

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