When Sex Takes Over

Sexual Harassment ACCA Blog Post
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When sex takes over

Sex and alcohol in the workplace can lead to major trouble.

Today I would like to review a matter involving sex, alcohol and lies.

First, let me set the scene:

It is a combined Christmas party and a farewell party. The company paid $25 a head towards the costs of the function. Several employees attended it.

Before the function, several employees went to a hotel (“A”) for pre-dinner drinks.

Other employees arranged accommodation at another hotel–we will call this hotel “B” for clarity.

The function was well lubricated with copious amounts of alcohol flowing.

To describe the function and subsequent activities as bawdy would not do it justice.

After the function, several employees returned to Hotel B. One of these (we will call Madam X for her sake) came to the room with other employees. Some employees were trying to sleep despite the interruptions.

Madam X decided it would be great to have a little fun–she had a bath with two other employees. She then stood at the bathroom door with a bath towel around her body while another employee went to the toilet.

That must have triggered something in her, so she jumped in the bath with two employees. She then had sexual intercourse with another employee then another.

All of her actions were within the view and/or earshot of other employees in the room.

The complaint

The behaviour of Madam X and the other employees who engaged in the sexual behaviour and exhibition shocked one of the other employees. She rang the Acting Manager of the store–she was hysterical as she outlined the conduct. The manager confirmed the conduct by speaking with two other employees who were present.

One person could not come to work because she was crying and hyperventilating. Another employee stated she was distressed and disgusted by the activities.

The company suspended the employees involved in the sexual activities.

The investigation

The company spoke to employees who were present. These employees confirmed the activities and expressed disgust by what had occurred. Some expressed remorse about not stopping the conduct before it escalated.

The investigator questioned Madam X. She initially denied having sex. She said she could not remember. She inferred she was so affected by alcohol she could not remember what happened.

The investigator questioned her again some two weeks later. He asked specific questions about the sexual activity on the night. She replied “no comment” or she did not recall.

The interviewer then told her:

• “[W]e feel you have been dishonest with us throughout this interview process. In particular, you have lied to us about:
• Whether you had sex with [the fourth employee].
• Whether you had sex with [another employee].
• Your recollections of what happened that night at the hotel; and
• What you did in the bathroom with [another employee] and [the fourth employee].
• Do you have anything to say about this?”

Madam X replied with “No comment.”

You should note when Madam X gave evidence at the Australian Industrial Relations Commission (Commission) she admitted she engaged in the alleged sexual activities. She was too embarrassed to tell the truth.

The company advised her, during the second interview, they were considering ending her employment because of her activities and dishonesty when questioned about her activities. The investigator asked her if she wanted to respond to this or to provide any further information. She did not.

The company ended her employment.

Initial hearing in the Australian Industrial Relations Commission

Madam X referred to the Commission as she argued against termination. The Commission addressed two issues–sexual harassment and her dishonesty.

The Commissioner commented on sexual harassment occurring when unwelcome sexual conduct occurred in the presence of a person. Was the person sexually harassed? The conduct occurring in circumstances in which a reasonable person engaging in the conduct, having regard to the circumstances, would have expected the person harassed would be offended, humiliated or intimidated.
He then determined he would not characterise her conduct as sexual harassment or, even if considered sexual harassment, the conduct was only of the “indirect kind.”

The Commissioner then reflected on her failure to answer questions truthfully during the investigation. He considered a previous decision where dishonesty resulted in dismissal. He then referred to the conduct of Madam X:

The conduct about which Madam X lied was of an inherently personal nature. Lying is never to be condoned. However, given the nature of the conduct about which she has been untruthful, I do not consider that any dishonesty on her part has been such that it should be regarded as likely to destroy the necessary relationship of trust between an employer and employee. In drawing this conclusion, I have also had regard to the evidence of [the Assistant Manager of the xxx store] who said that he had no reason to believe that Madam X was dishonest when it came to stock or cash.

He then made these comments about the matter:

• Allegations of sexual harassment must be taken seriously by employers. Indeed, they may be held liable for sexual harassment by their employees even where this occurs out of hours and away from the workplace.
• I have rejected the argument that there was no connection between Madam X’s conduct and her employment.
• The respondent’s submissions greatly exaggerated the seriousness of Madam X’s misconduct, particularly the suggestion that she committed a criminal act of obscenity. Moreover, I have found most of the behaviour complained of either did not constitute sexual harassment as defined by the SDA or only did so in a relatively marginal way.
• As the respondent conceded, the less direct the relationship with the workplace the more serious the misconduct would need to be to justify termination of employment. Most of the impugned behaviour occurred well away from the workplace, after rather then [sic] during a work function, in a hotel room that was booked and paid for privately.
• In all the circumstances, Madam X’s conduct was not so serious as to constitute a valid reason for the termination of her employment.
The Appeal
The matter went to appeal. The grounds were the Commissioner:
• Misconstrued and/or misapplied s.652(3)(a) by failing to consider and determine the effect of the conduct on the welfare of other employees.
• Failed to make necessary findings of fact and law, in deciding whether there was a valid reason for the termination.
• Erred in the construction and application of s.28A(1)(b) of the Sex Discrimination Act 1984 (Cth).
• Erred by making an order of re-instatement without making findings of fact regarding whether an appropriate level of trust and confidence could be re-established, given the respondent’s dishonesty.
• Misconstrued and/or misapplied the test of what constitutes a valid reason for termination by failing to consider relevant matters and requiring the appellant to establish serious misconduct.

The matter wound its way through the various avenues in the Australian Industrial Relations Commission. It was eventually determined the termination of Madam X’s employment was not harsh, unjust, or unreasonable. They quashed the previous judgements.

It is interesting to note this is a 2007 matter–I believe the initial determination (the one appealed) would be different if they addressed the conduct today.

See Australian Industrial Relations Commission Appeal by Telstra Corporation Limited C2007/3458)

Take aways

• Employers should make comprehensive notes relating to the investigation process.
• Explore all evidence both for and against the respondent
• Lock in witnesses with a formal statement
• Provide procedural fairness in all aspects of the investigation.
• Take positive action if the circumstances warrant it.

Contact ACCA if you want any assistance with policies and/or investigations concerning sexual harassment in the work place.

Mick Symons – ACCA (www.acca-aust.com.au)

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