NSW Court of Appeal finds innuendo is sexual harassment, observing the sexualisation of women in the workplace is often not explicit

By Fay Calderone and Matthew Peterson

In a landmark decision, the NSW Court of Appeal has upheld a NSW Civil and Administrative Tribunal Appeal Panel finding of sexual harassment as a result of a ‘mortifying’ workplace health and safety poster; sending a clear message that less ‘explicit’ means of harassment such as innuendo, insinuation, implication, overtone, undertone and horseplay are not immune from liability.

In a separate ruling, the Tribunal awarded the worker $200,000 in damages, including $5,000 aggravated damages against Vitality Works as a result of its apology which the Tribunal agreed was ‘far from a full apology’ and full of ‘weasel words’.

The NSW Court of Appeal decision confirms that a broad range of conduct may amount to ‘other unwelcome conduct of a sexual nature’ including jokes and comments which are sexually suggestive and/or contain a double meaning, whether or not the perpetrator actually intended to sexually harass their victim.

Sexual harassment has been a recent focus of the legislature, with the Discrimination and Fair Work (Respect at Work) Amendment Bill (currently before the Senate) set to make major changes to workplace and discrimination legislation. Employers must ensure they have the tools and resources to be able to effectively identify and address sexual harassment in the workplace.

The background: spinal safety

Sydney Water had engaged workplace health and occupational wellbeing consultancy Vitality Works to provide training and other similar services to Sydney Water.

Ms Yelda was employed by Sydney Water as a customer liaison officer. In around October 2015, Ms Yelda agreed to have her photograph taken for the ‘SafeSpine’ work health and safety campaign conducted by Vitality Works.

Vitality Works subsequently used Ms Yelda’s photograph to produce a safety poster depicting Ms Yelda smiling with her right arm outstretched above her head and the slogan ‘Feel great – lubricate!’, which was displayed at Sydney Water facilities where Ms Yelda worked.

While Ms Yelda had agreed to have her photo taken, she did not agree to the form of the poster and in particular the use of the slogan. Ms Yelda alleged that she felt immediate humiliation and embarrassment, and that she felt like a ‘sex object’ after a male colleague emailed her saying, ‘Great advice mate but a bit too much info for me!!!!’.

When she became aware of the poster, Ms Yelda complained to Sydney Water and copies of the poster were promptly removed. Both Sydney Water and Vitality Works also apologised to Ms Yelda.

Ms Yelda subsequently commenced proceedings under the Anti-Discrimination Act 1977 (NSW) (ADA), alleging sexual harassment against both Sydney Water and Vitality Works as well as sex discrimination against Sydney Water.

The Tribunal’s decision

The Tribunal at first instance was satisfied that the poster constituted ‘other unwelcome conduct of a sexual nature’ because:

• the conduct was plainly ‘unwelcome’. Ms Yelda did not consent to the use of her image in such a way, and subsequently complained about the poster.
• the slogan ‘Feel great – lubricate!’ was held to be sexual in nature. While it was common ground that the poster depicting Ms Yelda was designed for the purpose of conveying a work safety message, the Tribunal accepted that the slogan operated as a double entendre which was reasonably capable of conveying a sexualised connotation (in finding so, the Tribunal rejected the submission that ‘lubricate’ here instead referred to the ‘lubrication of joints and the generation of synovial fluid’).
• a reasonable person would have anticipated that Ms Yelda would be, at least, offended or humiliated by the poster.

The Tribunal found that the design, publication, display and distribution of the poster was done by Vitality Works with Sydney Water approving the layout and the design and then authorising Vitality Works to display the poster at Sydney Water facilities. This conclusion was based on evidence that Vitality Works was essentially managing the production and display of posters at Sydney Water facilities, and even though the posters were actually put up by Sydney Water employees, it was found that this was done at the direction of Vitality Works as part of the contractual arrangement.

The Tribunal also found that Sydney Water had engaged in sex discrimination because a male colleague who was also photographed had not been depicted in the same way as Ms Yelda, and that other posters featuring the slogan were not used.

Both Vitality Works and Sydney Water appealed the Tribunal’s decision but both appeals were dismissed with the Appeal Panel upholding the finding that Vitality Works was responsible for the conduct, and Sydney Water was jointly accountable.

The Tribunal subsequently awarded Ms Yelda $200,000 in damages, finding that Ms Yelda’s loss totalled $318,280.08, with the statutory cap limiting such damages to $100,000 for each of Sydney Water and Vitality Works.

The damages awarded to Ms Yelda included $5,000 by way of aggravated damages in respect of an apology issued by Vitality Works which the Tribunal accepted as being ‘minimal’ and full of ‘weasel words’ intended to minimise Vitality Works’ role in the display of the poster.

The NSW Court of Appeal decision

Vitality Works subsequently appealed to the NSW Court of Appeal but its appeal was dismissed and Vitality Works was ordered to pay Ms Yelda’s costs.

In arguing its appeal, Vitality Works submitted that the Tribunal’s (and the Appeal Panel’s) finding that it and Sydney Water were ‘jointly engaged’ in the sexual harassment of Ms Yelda was ‘ultra vires’. This was rejected with the Court of Appeal recognising that the Appeal Panel adopted the critical finding of fact made by the Tribunal that the design, publication, display and distribution of the Poster was ‘done by Vitality Works with the approval of Sydney Water’.

The Court of Appeal further remarked that it would have been open to the Tribunal to find liability solely on ‘joint responsibility’, observing that the conduct of more than one actor may, depending on the circumstances, properly be the subject of a finding of sexual harassment. The Court of Appeal used the example of two corporate defendants where, depending on the circumstances, the activities of various employees and agents may be attributed to more than one such corporate defendant to illustrate its point.

Vitality Works further submitted that its subjective intention was a relevant consideration in determining whether the conduct was of a sexual nature. However, this was firmly rejected by the Court of Appeal finding that whether the conduct is ‘conduct of a sexual nature’ is a question of fact, ascertained objectively.

The Court of Appeal was particularly critical of the suggestion that conduct cannot amount to sexual harassment unless it is 'sexually explicit'.

Vitality Works had quoted a leading text concerning sexual harassment to suggest that jokes and comments containing a double meaning (ie horseplay) might not amount to sexual harassment if that was not the intention of the perpetrator. However, the Court of Appeal held:

[36]      It is a serious error to contrast “horseplay”, whatever that non-statutory term is supposed to mean, with “other unwelcome conduct of a sexual nature”. A finding of fact that conduct amounts to “horseplay” is irrelevant to the question of whether that conduct should be characterised as “other unwelcome conduct of a sexual nature”. Conduct which may be characterised as “horseplay” – an imprecise concept – is not immune from being found to be sexual harassment.

In a separate judgment, Justice McCallum agreed with the judgment of President Bell and Justice Payne, and further stated:

[125]     … It was common ground that the poster depicting Ms Yelda was designed for the purpose of conveying a work safety message in what was established to be a male-dominated workplace. One of the arguments in support of ground 5(a) was that the depiction in that context of a woman feeling great because she lubricates could not amount to sexual harassment because its sexualised message was not “explicit”. The sexualisation of women in the workplace often isn’t. Innuendo, insinuation, implication, overtone, undertone, horseplay, a hint, a wink or a nod; these are all devices capable of being deployed to sexualise conduct in ways that may be unwelcome. … The suggestion that conduct cannot amount to sexual harassment unless it is sexually explicit overlooks the infinite subtlety of human interaction and the historical forces that have shaped the subordinate place of women in the workplace for centuries. …

Key lessons for employers

The NSW Court of Appeal decision emphasised that a broad range of conduct could constitute sexual harassment including jokes, horseplay, and other seemingly innocuous conduct depending on the circumstances. As Justice McCallum put it, human behaviour is infinitely subtle and the sexualisation of women in the workplace is often not explicit.

The NSW Court of Appeal decision also recognised that as the modern workplace evolves, a wide range of actors including employees, contractors, self-employed persons, volunteers and trainees (whether paid or unpaid) may fall within the scope of a ‘workplace participant’ for the purposes of sex discrimination legislation.

It has long been recognised that sexual harassment presents a significant risk for employers both in terms of being ordered to pay substantial damages and significant reputational risk. However, sexual harassment is quickly evolving into an important workplace safety issue.

Employers must ensure they have the tools and resources to be able to effectively identify and address sexual harassment in the workplace. This is particularly important in the current COVID-19 remote working environment (take the instance of sexual harassment via an online platform). Employers should also review their third party arrangements (including arrangements with labour-hire providers and other contractors) so as to minimise their risk of liability.

This article was written with the assistance of Alexander Connolly, Law Graduate.