23 July 2014
Practice Group(s):
Labour, Employment
& Workplace Safety
Discrimination – Vicarious Liability Gets More
Expensive
By Duncan Fletcher and Nerissa Rowe
Introduction
The full bench of the Federal Court in Richardson v Oracle Corporation1 Australia
(Richardson) has cited changing community standards as a basis for significantly
increasing awards for general damages (ie damages for non-economic loss, such as loss
of enjoyment of life) in discrimination matters. In Richardson, the Court increased an
award of general damages from AUD18,000 to AUD100,000 indicating that vicarious
liability for workplace discrimination will be significantly more expensive for employers
going forward.
The Facts and the Decision at First Instance
Ms. Richardson, a technical manager at Oracle Corporation, was sexually harassed on
11 separate occasions by her colleague, Mr Tucker. These instances generally involved
Mr. Tucker making comments of a smutty or offensive nature, "I'll be thinking about [your
legs] wrapped around me all day", and inviting Ms. Richardson to join him for private
liaisons, such as dinner or a weekend in the cabin of Mr. Tucker's boat.
The trial judge, Justice Buchanan, did not criticise Oracle Corporation for the way in
which it responded once it became aware of the harassment. However, Justice
Buchanan found Oracle Corporation vicariously liable for Mr. Tucker's actions because its
policies did not refer to the applicable laws or state clearly that sexual harassment was
unlawful behaviour for which Oracle could be vicariously liable. Following this finding,
Justice Buchanan awarded Ms. Richardson AUD18,000 in general damages.
Ms. Richardson appealed the decision.
The Decision on Appeal
The Full Federal Court acknowledged that the award of AUD18,000 was consistent with
general damages awards in numerous other discrimination cases where there had been
no significant psychological trauma or limitations on work. The Court also acknowledged
that general damages in the region of AUD100,000 had previously been confined to
limited cases in which there was expert evidence of significant psychological trauma and
suffering.
However, the Court went on to observe that:

community standards now accord a higher value to compensation for pain and
suffering and loss of enjoyment of life than before

academic commentary suggests that a 'conservative approach' to assessing
discrimination damages impedes the 'deep social reform' intended by antidiscrimination legislation
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Richardson v Oracle Corporation Australia [2014] FCAFC 82
Discrimination –Vicarious Liability Gets More Expensive

there is a need for awards for general damages in discrimination matters to be
consistent with the higher general damages awards made in comparable personal
injury and workplace bullying matters.
After concluding that the damages awarded in the prevailing discrimination cases did "not
reflect the shift in the community's estimation of the value to be placed on these matters",
the Court found that the original award of AUD18,000 was "manifestly inadequate" and
substituted it with an award of AUD100,000.
An Expensive Change in the Law
A general damages award of AUD100,000 to a victim whose harassment was not
extreme and whose ability to work was not impacted has the potential to cause a
significant shift in discrimination litigation. It also leaves open the question of what
damages might be awarded to a victim who suffers significant psychological trauma
following discrimination in the workplace.
Oracle Corporation has until 5 August 2014 to appeal the decision.
Authors:
Duncan Fletcher
duncan.fletcher@klgates.com
+61.8.9216.0923
Nerissa Rowe
nerissa.rowe@klgates.com
+61.8.9216.0968
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