As CEO of Learning Seat, a priority for me is to build and maintain a healthy, safe and productive workplace culture. To me the benefits are obvious: it creates a more enjoyable place to work, which leads to higher retention rates and productivity.
And it’s important that employees understand that they have a role and responsibilities in achieving this too.
Unfortunately, far too often I read in the media about companies coming under investigation for unhealthy workplace cultures, or being subjected to financial penalties that amount to thousands – and in some cases millions – of dollars in damages.
Legal cases that have made headlines over the past few years make clear to me the sad reality that unacceptable and unlawful behaviour continues to take place in our organisations.
The case of Richardson v Oracle Corporation Australia Pty Ltd was a particularly striking example of this. It was a case pursued by the claimant against her employer, Oracle Corporation Australia, for sexual harassment she was subjected to by a colleague during her employment. Without repeating all the details of the case, which have been widely publicised, I’ve picked five key learning points from this case that stand out for me as a CEO.
Your organisation can be sued and held vicariously liable for the unlawful acts of its staff
In this case, although she was sexually harassed by a colleague, Ms Richardson pursued her claim against Oracle. This meant it was Oracle rather than the colleague that faced the risk of liability, along with everything else that results from a legal claim against an organisation: significant legal costs, management and executive time, reputational damage, low morale, and so on.
To successfully defend a vicarious liability claim you must provide sufficient training
Oracle could only successfully defend the claim if it could establish in court that it had taken ‘all reasonable steps’ to prevent the sexual harassment against Ms Richardson. Oracle had relevant policies in place and had trained the offending employee about inappropriate workplace behaviour, including sexual harassment. This was insufficient. The reason being that the training provided to the offending employee was based on American law, not Australian law (not as uncommon as you may think in global organisations like Oracle). If your organisation does not provide comprehensive training, based on Australian law, to effectively implement relevant policies, it cannot defend claims of vicarious liability. In the court’s view, if the training you have provided is insufficient all reasonable steps have not been taken. Your defence then fails.
Online training has the court’s approval
An additional criticism of Oracle’s training was made in this case: that the training given was online, not face-to-face. Justice Buchanan of the Federal Court said that this argument was ‘entirely misplaced’ – online training is just as effective as face-to-face training. Provided that the training is clear, comprehensive and based on Australian law, it is a perfectly acceptable way to train your staff. Coupled with effective policies and properly implemented, online training puts your organisation in a position to successfully defend itself against vicarious liability.
Your staff have a responsibility too
Justice Buchanan also emphasised the fact that Oracle’s staff are adults and therefore can be trusted to complete the training with maturity. I strongly agree with Justice Buchanan on this point. But I also recognise that some onus must be placed on employees to acknowledge, as part of the training, that they understand the expectations set by the organisation regarding appropriate workplace behaviour.
The penalties awarded against employers are increasing
I am seeing evidence for this on an almost weekly basis. Despite winning her claim against Oracle, Ms Richardson appealed her case to the Full Bench of the Federal Court, arguing that she should receive more in damages. The Full Bench increased her award from $18,000 to $130,000. This was further compounded by the additional cost of executive time to defend the proceedings, legal costs and reputational damage.
Now please don’t get me wrong. I’m not suggesting that building a healthy workplace culture wasn’t also a priority for the CEO of Oracle. I find it more likely that this gap in the training was simply an oversight – an oversight that unfortunately ended in significant penalties for the company.
What has become clear is that, as the person responsible for running my business, I cannot treat appropriate workplace behaviour as something I would ‘like’ to nurture, nor can I assign the entire responsibility for delivering this to anyone else.
What are the next steps to ensure a happy and safe workplace?
As a leader in your organisation, you’re probably already aware of the endless benefits a healthy culture can bring. But the reality is that one claim could ruin your business if you do not take the appropriate steps to educate, train and engage your staff about unlawful behaviour at work.
Get in contact with us today to see how our compliance training can help reduce risk in your organisation.