Respect @ Work: Cost protection proposed for survivors of sexual harassment in the workplace

By Fay Calderone and Cassandra Goldman

The final legislative reform under the landmark Respect@Work report (Report), which addressed sexual harassment endemic in Australian workplaces, is in place, with the Australian Human Rights Commission Amendment (Costs Protection) Bill 2023 (Bill) introduced in Parliament on Wednesday 15 November 2023.

The Bill proposes to insert a modified ‘equal access’ or ‘asymmetrical’ costs protection provision into the Australian Human Rights Commission Act 1986 (Act) to achieve recommendation 25 of the Report.

As identified by the Attorney-General in his second reading speech and mirrored in the Report, the risk of an adverse costs order acts as a disincentive for applicants to pursue sexual harassment matters in the federal jurisdiction. Accordingly, the Bill aims to protect workers who bring sexual harassment claims from adverse costs orders in certain circumstances in the federal jurisdiction and in turn provides sufficient certainty as to how costs would be awarded in unlawful discrimination proceedings.

The proposed ‘equal access’ costs protection

The Bill amends section 46PSA(2) of the Act to provide that where an applicant is successful in proceedings on one or more grounds, the respondent must pay the applicant’s costs. However, it caveats that, where the applicant’s unreasonable act or omission caused the applicant to incur costs, the court would not be required to order the respondent to pay those costs.

The practical effect of the above means that where an applicant is unsuccessful on all grounds, parties would generally bear their own costs. This differs from the current practice where ‘costs generally follow the event’, which means that where applicants are unsuccessful, they may be liable for their own costs as well as those of other parties.

In addition, the Bill will also prevent a court from ordering an applicant to pay the respondent’s costs except in certain circumstances. The court may order that an applicant pay the respondent’s costs where it is satisfied that:

• the applicant instituted the proceedings vexatiously or without reasonable cause; or
• the applicant’s unreasonable act or omission caused the other party to incur the costs; or
• all of the following apply:
  • the other party is a respondent who was successful in the proceedings;
  • the respondent does not have a significant power advantage over the applicant; and
  • the respondent does not have significant financial or other resources relative to the applicant.

The Bill also applies to representative actions, which will allow representative organisations to have greater certainty about the costs they would be required to pay should they commence legal proceedings on behalf of others.

The Attorney-General stated that the modified equal access model intends to address the power imbalances and resource disparities present in most unlawful discrimination proceedings, while recognising that not all respondents are well-resourced or at a power advantage over the applicant.

A step towards equal access

If passed, the Bill will help to reduce the barriers victim-survivors face when pursuing, or deciding to pursue, claims relating to sexual harassment in the federal jurisdiction and is considered by many to be a significant development towards creating healthy, respectful and inclusive workplaces. The Bill is also likely to impact litigation strategy for both applicants and respondents in sexual harassment matters in the federal jurisdiction.