In this In Brief, we consider the Full Federal Court’s decision in Vergara v Ewin  FCAFC 100 (12 August 2014). The decision of the judges in the majority confirms that for the purposes of anti-discrimination legislation, the courts will take a broad view of the definition of a “workplace” where alleged discrimination or harassment may occur. This approach increases the potential liability of persons for their harassing or discriminatory conduct; and, therefore, the potential vicarious liability of employers for such conduct.
In December 2013, Justice Bromberg of the Federal Court found that an accountant (Mr Vergara) had unlawfully sexually harassed his supervisor (Ms Ewin) in contravention of section 28B(6) of the Sex Discrimination Act 1984 (Cth) (SDA). The offending behaviour spanned four separate incidents and was both verbal and physical in nature.
Ms Ewin was employed by Living and Leisure Australia Ltd (LLA) as its Group Financial Controller. Mr Vergara was also working at LLA as an accountant, but was a contractor employed by a labour hire firm, rather than an employee of LLA.
On 13 May 2009, Mr Vergara approached Ms Ewin in her office, turned the lights off, tried to touch her hand and said he would only turn the lights back on if she agreed to talk with him, because he wanted to tell her something. Ms Ewin agreed, and they went to the Waterside Hotel located across the road from the LLA office. At the hotel Mr Vergara sexually propositioned Ms Ewin and proposed that they have an affair. Ms Ewin refused. Outside the Waterside Hotel and on the way to a nearby train station, Ms Vergara tried to kiss Ms Ewin.
The next day, Mr Vergara sexually propositioned Ms Ewin again and made further statements of a sexual nature. The day after that, Mr Vergara requested sexual favours from Ms Ewin, and later that night, engaged in unwanted sexual intercourse with her after a work function.
LLA and Mr Vergara’s employer were originally respondents to the proceedings brought by Ms Ewin under the SDA, but their involvement was discontinued following mediation.
Decision at First Instance
Section 28B(6) of the SDA provides that: “It is unlawful for a workplace participant to sexually harass another workplace participant at a place that is a workplace of both of those persons.”
A significant issue in the proceedings at first instance was whether the events at the Waterside Hotel fell within the definition of a “workplace” for the purposes of the SDA; that is, whether the hotel was “a place at which a workplace participant works or otherwise carries out functions in connection with being a workplace participant” (section 28B(7)). “Workplace participant” is defined in the same provision as an employer, an employee, a commission agent, a contract worker or a partner in a partnership.
Justice Bromberg held that the events at the Waterside Hotel were “part of the same course of sexual harassment which began in the [LLA] office.” The conduct at the Waterside Hotel immediately followed the sexual harassment at the office, and the movement from the office to the Waterside Hotel was initiated by Mr Vergara “as part of his sexual harassment of Ms Ewin in the office and was acceded to by Ms Ewin in reaction to that harassment at the office, in an endeavour to move to a safer place.”
Having not regarded Mr Vergara as a credible witness, Justice Bromberg found that the sexual harassment at the LLA office was unlawful workplace-based harassment under the SDA. His Honour also concluded that Mr Vergara and Ms Ewin had moved to the Waterside Hotel to deal with that incident. That was a sufficient connection to the workplace to render the Waterside Hotel and the course of events that followed a “workplace” for purposes of the SDA.
Justice Bromberg assessed the compensation to be awarded to Ms Ewin at $476,163. However, after making allowance for other recoveries by Ms Ewin, his Honour ordered Mr Vergara to pay her $210,563 including interest.
Mr Vergara appealed against various aspects of the findings of sexual harassment made at first instance (including the finding that sexual intercourse had occurred), and against Justice Bromberg’s assessment of damages.
Decision on Appeal
Justice White of the Full Federal Court wrote a separate judgment from that of Justices North and Pagone.
Conduct contravening the SDA
On the appeal grounds relating to whether Mr Vergara had contravened the SDA through his conduct – other than that at the Waterside Hotel – Justice White found that:
the evidence supported the trial judge’s conclusion that sexual intercourse had occurred; and
as Mr Vergara did not dispute on appeal that his conduct was unwelcome, it breached the SDA.
Justices North and Pagone agreed with these aspects of Justice White’s judgment.
Was the Waterside Hotel a “workplace”?
On the question whether the conduct at the Waterside Hotel occurred at a “workplace” within the meaning of the SDA, Justice White held that Mr Vergara was not carrying out any “function” at the Waterside Hotel “in connection with” his contract work (within the meaning of section 28B(7) of the SDA).
His Honour considered that a place where a participant happens to be will not necessarily be a workplace; it must also be a place at which the participant carries out functions in connection with being a workplace participant.
Justice White found that Mr Vergara was only at the hotel to further his sexual pursuit of Ms Ewin; and that it could not be said that Mr Vergara was complying with an implicit direction from Ms Ewin in her capacity as his supervisor to attend the hotel.
In contrast, Justices North and Pagone upheld Justice Bromberg’s findings that the Waterside Hotel was a workplace. Their Honours confirmed that it was open to the primary judge to conclude that going to the Waterside Hotel was “triggered by a need to deal with the resumption of Mr Vergara’s unwanted sexual advances”; and that the function of both Ms Ewin and Mr Vergara at the hotel was to deal with what had commenced at the workplace.
In their Honours’ view, it was not relevant that Mr Vergara’s motive was to persist in the harassment of Ms Ewin. Ms Ewin was attempting to deal at the hotel with the sexual harassment that had begun at the LLA office. She had made it clear to Mr Vergara that she was not interested in his advances, and her actions at the hotel were an attempt to deal with the working relationship which had been affected by Mr Vergara’s repeated sexual advances.
Assessment of compensation
Justice White (with whom Justices North and Pagone agreed) upheld the trial judge’s assessment of the compensation to be awarded to Ms Ewin.
Implications for employers
This decision confirms that for the purposes of anti-discrimination legislation, a “workplace” will be defined broadly. It is a timely reminder that the workplace can extend beyond the immediate setting, such as an office, in this case because the parties had gone to another location to deal with the harassment that had started in the office.
By the same reasoning, a workplace could, in theory, include public transport, a public park or a private residence, as long as the parties were carrying out some function in connection with the workplace.
The decision also serves as a reminder to employers of the need to:
investigate any complaints of sexual harassment swiftly and thoroughly; and
clearly explain – in training and policies – that the responsibility of staff to avoid engaging in sexual harassment continues outside the immediate workplace and workplace-based or work-related events.