News & Events

Full Federal Court adopts a broad approach to the concept of a “workplace” under anti-discrimination legislation

Submitted By Firm: Corrs Chambers Westgarth

Contact(s): John Tuck

Author(s):

Janine Young (Partner), Anthony Forsyth (Consultant) & Amanda Loftus (Lawyer)

Date Published: 9/16/2014

Article Type:

Share This:

In this In Brief, we consider the Full Federal Court’s decision in Vergara v Ewin [2014] 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.

Background

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[1] 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.

Find a Member

View or print a complete ELA member list »

Client Successes

Altra Industrial Motion Inc.

Altra Industrial Motion Inc. has multiple locations in the U.S., as well as Central America, Europe, and Asia. The Employment Law Alliance has proved to be a great asset in assisting us in dealing with employment issues and matters in such diverse venues as Mexico, Australia, and Spain. We have obtained excellent results using the ELA network for matters ranging from a multi-state review of employment policies to assisting with individual employment issues in a variety of foreign jurisdictions.

In one instance, we were faced with an employment dispute with a former associate in Mexico that had the potential for substantial economic exposure. The matter had been pending for over a year, and we were not confident in the employment advice we had been receiving. I obtained a referral to the ELA counsel in Mexico, who was able to obtain a favorable resolution of the dispute in only a few days. Based on our experiences with the ELA, we would not hesitate to use its many resources for future employment law needs.

American University in Bulgaria

In my career I have been a practicing attorney, counsel to the Governor of Maine, and CEO of a major public utility. I have worked with many lawyers in many settings. When the American University in Bulgaria needed help with employment litigation in federal court in Syracuse, New York, we turned to Pierce Atwood, the ELA member we knew and trusted in Maine, for a referral. We were extremely pleased with the responsiveness and high quality of service we received from Bond Schoeneck & King, the ELA's firm in upstate New York. I would not hesitate to recommend the ELA to any employer.

David T. Flanagan
Member of Board of Trustees 

Arcata Associates

I really enjoyed the Conducting an Effective Internal Investigation in the United States webinar.  We are in the midst of a rather delicate employee relations issue in California right now and the discussion helped me tremendously.  It also reinforced things that you tend to forget if you don't do these investigations frequently.  So, many, many thanks to the Employment Law Alliance for putting that webinar together.  It was extremely beneficial.

Lynn Clayton
Vice President, Human Resources

Barrett Business Services, Inc.

I recently participated in the ELA-sponsored webinar on the Employee Free Choice Act.  I was most impressed with that presentation.  It was extremely helpful and very worthwhile.  I have also been utilizing the ELA's online Global Employer Handbook.  This compliance tool is absolutely terrific. 

I am familiar with several other products that purport to provide up-to- date employment law information and I believe that this resource is superior to other similar compliance manuals.  I am delighted that the ELA provides this free to its members' clients.

Boyd Coffee Company

Employment Law Alliance (ELA) has provided Boyd Coffee Company with a highly valued connection to resources, important information and learning. With complex operations and employees working in approximately 20 states, we are continually striving to keep abreast of specific state laws, many of which vary from state to state. We have participated in the ELA web seminars and have found the content very useful. We appreciate the ease, cost effectiveness and quality of the content and presenters offered by these web seminars.  The Global Employer Handbook has provided our company with a very helpful overview of legal issues in the various states in which we operate, and the network of attorneys has helped us manage issues that have arisen in states other than where our Roastery and corporate headquarters are located in Portland, Oregon.

Capgemini Outsourcing Services GmbH

As an international operating outsourcing and consulting supplier Capgemini has used firms of the Employment Law Alliance in Central Europe. We were always highly satisfied with the quality of employment law advice and the responsiveness. I can really recommend the ELA lawyers.

Hirschfeld Kraemer

Stephen HirschfeldAs an employment lawyer based in San Francisco, I work closely with high tech clients with operations around the globe. Last year, one of my clients needed to implement a workforce reduction in a dozen countries simultaneously. And they gave me 48 hours to accomplish this. I don't know how I could have pulled this off without the resources of the ELA. I don't know of any single law firm that could have made this happen. My client received all of the help they needed in a timely fashion and on a cost effective basis.

Stephen J. Hirschfeld
Partner 

Hollywood Entertainment Corporation

As the Vice President for Litigation & Associate General Counsel for my company, I need to ensure that we have a team of top-notch employment lawyers in place in every jurisdiction where we do business. And I want to be confident that those lawyers know our business so they don't have to reinvent the wheel when a new legal matter arises. With more than 3400 stores and 35,000 employees operating in all 50 U.S. states and across Canada, we rely on the ELA to partner with us to help accomplish our objectives. I have been delighted with the consistent high quality of the work performed by ELA lawyers. I encourage other in-house counsel to use their services, as well.

Ingram Micro

Ingram Micro is the world's largest technology distributor, providing sales, marketing, and logistics services for the IT industry around the globe. With over 13,000 employees working throughout the U.S. and in 35 international countries, we need employment lawyers who we can count on to ensure global legal compliance. Our experience with many multi-state and multi-national law firms is that their employment law services are not always a high priority for them, and many do not have experts in many of their offices. The ELA has assembled an excellent team of highly skilled employment lawyers, wherever and whenever I need them, and they have proven to be an invaluable resource to our company.

Konami Gaming

Our company, Konami Gaming, Inc., is growing rapidly in a very diverse and highly regulated industry. We are aggressively entering new markets outside the domestic U.S., including Canada and South America. I have had the recent opportunity to utilize the services provided by the ELA. The legal advice was both responsive and professional. Most of all, the entire process was seamless since our Nevada attorney coordinated the services and legal advice requested. I look forward to working with the ELA in the future, as it serves as a great resource to the legal community.

Jennifer Martinez
Vice President, Human Resources

Nikkiso Cryo, Inc.

Until recently, I was unaware of the ELA's existence. We have subsidiaries and affiliates throughout the United States, as well as in Asia, the Middle East and Europe. When a recent legal issue arose in Texas, our long-time Nevada counsel, who is a member of the ELA, suggested that this matter be handled by his ELA colleague in Dallas. We are very pleased with the quality and timeliness of services provided by that firm, and we are excited to now have the ELA as an important asset to help us address employment law issues worldwide.

Palm, Inc.

The ELA network has been immensely important to our company in helping us address an array of human resources challenges around the world. I strongly encourage H.R. executives who have employees located in many different jurisdictions to utilize the ELA's unparalleled expertise and geographic coverage.

Stacy Murphy
Former Senior Director of Human Resources

Rich Products

As the General Counsel for a company with 6,500 employees operating across the U.S. and in eight countries, it is critical that I have top quality lawyers on the ground where we do business. The ELA is an indispensable resource. It has taken the guesswork out of finding the best employment counsel wherever we have a problem.

Jill K. Bond
Senior Vice President/General Counsel, Shared Services and Benefits

Ricoh Americas Corporation

We have direct sales and service offices all over the U.S., but have not necessarily had the need in the past for assistance with legal work in every state where we have a business presence. From time to time, we suddenly find ourselves facing a legal issue in a state where we have no outside counsel relationship. It has been a real benefit to know that the ELA has assembled such an impressive team of experts throughout the U.S. and overseas.

A few years ago, we faced a very tough discrimination lawsuit in Mississippi. We had never had to retain a lawyer there before. I was absolutely delighted with the Mississippi ELA firm. We received an excellent result. They will no doubt handle all of our employment law matters in Mississippi in the future. I have also obtained the assistance of several other ELA firms around the U.S. and have received the same outstanding service. The ELA is a tremendous resource for our company.

Roberts-Gordon LLC

Our affiliated companies have used the Employment Law Alliance in connection with numerous acquisitions, and have always been extremely pleased with our ability to obtain the highest quality legal advice on due diligence issues from jurisdiction to jurisdiction. We have found the Employment Law Alliance firms to be not only first rate with respect to their legal advice but also responsive and timely in assisting us with federal and state law issues critical to our due diligence efforts. We consider the Employment Law Alliance to be an important part of our team.

Rockwell Collins, Inc.

We have partnered with many ELA firms on the development and execution of case management strategies with very positive results. We have been very pleased with the legal advice and counsel provided by the law firms we have utilized who are affiliated with the Employment Law Alliance. The ELA firms we have worked with are customer focused, responsive, and thorough in their approach to handling labor and employment law matters.

Elizabeth Daly
Assistant General Counsel

Sanmina-SCI

Sanmina-SCI has facilities strategically located in key regions throughout the world. Our customers expect that we will provide them with the highest quality and most sophisticated services in the marketplace. We have that same expectation for the lawyers with whom we do business. With operations in 17 countries, we need to be certain that we have a team of lawyers working together to address our employment law needs worldwide. The ELA has delivered exactly what it promised-- seamless and consistent high quality services delivered in each locale around the globe. It has quickly become a key asset for our human resources department.

Starwood

We own, manage, and franchise hotels throughout the U.S. and in more than 90 countries. With more than 145,000 employees worldwide, ensuring that we comply with the complex web of local labor and employment laws in every one of these jurisdictions is a daunting task. The Employment Law Alliance has served as an important resource for us and we have benefited greatly from its expertise and long reach. When a legal dispute or issue has arisen in some far-flung place, Employment Law Alliance lawyers have always provided responsive, practical, and cost-effective assistance.

Wilmington Trust Corporation

Wilmington Trust has used the ELA to locate firms in California, Washington State, Georgia, and Europe. Our experience with the ELA lawyers with whom we have worked has always been one of complete satisfaction and prompt, practical advice.

Michael A. DiGregorio
General Counsel