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Month long sexual harassment results in $476k damages

Allegations of sexual harassment in the workplace can be difficult to manage. Reactions can range from “I can handle it” and laughing it off, to feelings of embarrassment, humiliation and shame.

As one employee recently discovered[1], a month long sustained verbal and physical sexual harassment by a workplace contractor, culminating in an alleged rape after a workplace function, resulted in serious psychological injury.

Claiming compensation before the Federal Court of Australia, the employee’s claim of sexual harassment was vindicated.

However a number of pertinent points relating to the employer’s delayed, and ultimately, flawed, response to the allegations were made throughout the decision.


The employee, Ms Ewin, was employed to oversee a small team of staff in a large Melbourne business.

Her alleged harasser, Mr Vergara, was contracted to Ms Ewin’s firm to complete an audit over a number of months.

During this tenure, Mr Vergara verbally and physically harassed Ms Ewin on a number of occasions.

The conduct included sexually suggestive comments, inappropriate touching, attempts to kiss, explicit propositions for sex and most seriously, following a work outing, a physical sexual assault in the workplace.

The employer’s initial reaction was relaxed.

When approached by Ms Ewin, her immediate supervisor laughed it off and joked that he had never had “the pleasure of being a target of sexual harassment.”

The supervisor also suggested that Ms Ewin talk to the alleged wrongdoer herself.

She admitted to considering at the time that she could “handle it” herself.

A short time later, while the majority of the co-workers were on an overseas work trip, Ms Ewin and Mr Vergara were left in the office.

During this time Ms Ewin again communicated her discomfort with Mr Vergara’s actions and HR was finally contacted.

This was at least 2 weeks after the physical assault.

After finishing up her employment in the months after the assault, Ms Ewin commenced proceedings against both her employer and Mr Vergara’s contractor agency.

These were mediated and resolved prior to the present proceedings against Mr Vergara in the Federal Court.

The Federal Court’s Decision

Opposing accounts of the same event were put before the Court by Ms Ewin and Mr Vergara.

The crux of Mr Vergara’s argument was that as a contractor, he was not a “fellow employee” and did not fall under the coverage of the Sex Discrimination Act.

Further, he also contended that as the alleged harassment occurred in common workplace areas such as the lift and corridor, that did not count as the “workplace” under the Act.

The Court rejected Mr Vergara’s argument about the application of the Act.

The Court found that while Mr Vergara and Ms Ewin were not “fellow employees”, he was a “workplace participant” and was capable of contravening the Act.

Further, the court rejected the argument that common areas were excluded.

The Court considered that if such an argument were accepted it would “significantly undermine [the goal of] eliminating sexual harassment from the workplace”.

Based on Mr Vergara’s demeanour whilst giving evidence, the ┬áCourt considered Mr Vergara was an arrogant individual with little or no regard for the truth,

The Court entered judgment against Mr Vergara for the amount of $476,000 together with interest.

Lessons for Employers

The Federal Court’s decision highlights the risks and perils of undertaking (or failing to undertake) workplace sexual harassment investigations.

While the employer in this case resolved its matter through mediation, it may very well have come at a hefty financial price. Further, had the employer acted sooner, there may have been a significant chance of mitigating the damage caused.

One of the major difficulties for those investigating the facts of workplace sexual harassment are the often competing and conflicting versions of the same event.

Non-responsive and evasive alleged wrongdoers, or complainants who insist they can “handle it” also cause headaches for HR investigators.

Ultimately however employers have a significant responsibility to take allegations of sexual harassment seriously, to protect not only itself from possible vicarious liability, but also protect employees for what can end up as years of psychological health issues.

Employers who ignore a report of sexual harassment do so at their peril.


[1] Ewin v Vergara (No 3) [2013] FCA 1311

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