The Federal Court of Australia has handed down a decision which is the first to consider the meaning of 'sex-based harassment', one of the recent inclusions to the Sex Discrimination Act 1984 (Cth) (SD Act) after the Respect@Work Report. While the allegations of sex based harassment were not upheld, the decision sheds some light on how the provision will operate.
There were, however, findings of unlawful sexual harassment and victimisation, for which the Court awarded $305,000 in damages and compensation, among the highest awards in this jurisdiction.
Reform Refresher
Following a 2020 report by the Sex Discrimination Commissioner titled Respect@Work: National Inquiry into Sexual Harassment in Australian Workplaces a new section 28AA was inserted into the SD Act prohibiting harassment on the ground of sex. The purpose of this section is to prohibit humiliating harassment that is based on a person's sex, even if it does not involve conduct of a sexual nature.
Under section 28AA, harassment on the ground of sex occurs if, by reason of a person's sex, the other person (the harasser) engages in unwelcome conduct of a demeaning nature in relation to the person harassed, in circumstances where a reasonable person would have anticipated the possibility that the person harassed would be offended, humiliated or intimidated.
This decision underscores that there must be a discernible and rational link between the alleged conduct and the person harassed, to satisfy the test under section 28AA.
Ms Magar's employment and background
Ms Biplavi Jarga Magar was employed as a shift supervisor at Mexicali Enterprise Pty Ltd, a franchise of the well-known Mexican chain restaurant Mad Mex. She was employed at the store from 7 September 2021 to 17 February 2023.
The franchise was wholly owned and operated by Mr Sher (Sonny) Khan (Mr Khan). By the time the matter went to hearing the business was in liquidation, so the claims proceeded against Mr Khan as the sole, individual Respondent.
The decision referred to several other male employees at the store who were referred to, collectively, as the 'Group' and who were alleged to have joined Mr Khan by engaging in inappropriate and sexist behaviours in the workplace.
Also important to this matter, in 2022 Ms Magar was relatively vulnerable. She had experienced a brief episode of psychosis and was hospitalised for this. However, expert psychiatric evidence established that this episode had no bearing on Ms Magar's actions or recollection of events in 2023, save that it added to her vulnerability and the power imbalance between her and Mr Khan, who was aware of her past illness. Ms Magar had also only been in Australia since 2021 on either a student or bridging visa and was 22 years old when the conduct occurred.
Harassment on the grounds of sex
Ms Magar alleged that Mr Khan and another senior manager were the ring-leaders among a Group of male staff who would make derogatory and sexual comments about women (customers and former staff), including commenting on their breasts, bodies, or clothing and using offensive name-calling, like "skanks and "whore". Ms Magar's evidence was that she "felt the need to be easy to work with" so she reluctantly tolerated this behaviour.
Ms Magar also alleged that, on one occasion, a manager had commented on her skinny jeans, calling them 'immodest'. When Ms Magar raised this with Mr Khan, Mr Khan asked her not to make Mr Conde uncomfortable or angry and that she should comply with his direction to not wear skinny jeans in compliance with an unspecified dress code.
Overall, Justice Bromwich was persuaded there was a pattern of "sexist and boorish" conduct in the workplace by the Group, resulting in a workplace culture that was "disinterested in preventing sexist conduct from taking place and was instead tolerant, or even conducive to its continuation". These factual findings supported the likelihood of other, more serious, conduct occurring including the subsequent findings of unlawful sexual harassment.
Ultimately, however, Justice Bromwich was not satisfied that the conduct was in relation to Ms Magar. The phrase "in relation to" was held by Justice Bromwich to mean there must be a discernible and rational link that is not overly tenuous. That link was not articulated by Ms Magar's legal team.
However, Justice Bromwich outlined that similar conduct likely would have been harassment on the ground of sex if the demeaning comments and jokes had been about, or otherwise directed at, Ms Magar.
Sexual Harassment
Notwithstanding that Ms Magar was unsuccessful in proving harassment on the grounds of sex, the Court nonetheless found that Mr Khan had engaged in unlawful serious sexual harassment of Ms Magar, which she reluctantly tolerated for several months before leaving the workplace.
That sexual harassment was constituted by Mr Khan:
- pointing-out hickey on Ms Magar's neck and asking about her sexual activity in crude terms;
- asking other intrusive questions about Ms Magar's private and sex life, including which other staff members she would have sex with (including underage staff);
- showing Ms Magar pornographic videos on his iPad;
- showing her his sex toys, touching her with them and asking how she might use them; and
- asking Ms Magar to go to a massage parlour or hotel with him;
- asking her to go to a hotel to watch pornography together,
- among other behaviours.
Although Mr Khan denied engaging in the impugned conduct, the Court preferred the evidence of Ms Magar over that of Mr Khan in all the circumstances, and notwithstanding Ms Magar's history of mental illness. Importantly, the Court also said that:
…even a perfunctory understanding of the experience of sexual harassment in the workplace would indicate that there are a number of reasons why a person might continue coming into work after a traumatic experience had occurred there. To start with the most obvious: to earn a livelihood…She had experienced a positive relationship with Mr Khan, which was likely to be particularly important for a young woman, with no family support in Australia, who had experienced significant mental health problems in the near past. This man was now using his position of authority to engage in unwelcome sexual conduct, and employment by his company was her source of income…
Victimisation
The final aspect of this matter was Ms Magar's victimisation claim.
Prior to initiating court proceedings, Ms Magar made a complaint to Mad Mex, which was investigated.
When Mr Khan discovered that it was Ms Magar who had made the complaint, Mr Khan, through his lawyers, issued Ms Magar 'concerns notices' alleging that comments made by her in the complaint were defamatory. The concerns notices requested Ms Magar to withdraw the comments and pay damages.
The Court readily found that Mr Khan's reason for sending the concerns notices was to intimidate Ms Magar, and to dissuade her from pursuing her sexual harassment allegations. The court, therefore, found that Mr Khan did victimise Ms Magar in breach of the SDA, by threatening defamation.
The Court subsequently ordered Mr Khan to pay Ms Magar $175,000 by way of damages, and $130,000 by way of compensation.
Key Takeaways for Employers
This case sheds light on how the Courts interpret the new section 28AA, whilst still allowing for case law to still be developed on the breadth of this section.
It helpfully, provides high level guidance as to what may constitute harassment on the ground of sex and employers should be alive to this in conducting their day-to-day practices.
You can read the full decision here.
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