Sexual harassment: guidance from the ERA

A question we often get from employee clients wishing to raise a claim for sexual harassment is whether it is better to pursue this claim in the Employment Relations Authority (ERA), or in the Human Rights Review Tribunal (HRRT). This is a significant decision. Once a sexual harassment claim is progressed in one jurisdiction, the employee is barred from raising that same claim in the other jurisdiction.

Part of the difficulty in deciding which pathway is most appropriate is that there is not a lot of case law guidance in either jurisdiction. However, the ERA recently released AKD v Clarence Street Warehouse Ltd [2022] NZERA 255, a decision shedding some much needed light on the ERA’s approach when it comes to cases of sexual harassment. The decision is also useful for employers in determining how to deal with a complaint of sexual harassment.

AKD was employed by Clarence Street Warehouse Limited (CSW) and complained that she had been subject to sexual harassment from her assistant manager. CSW investigated AKD’s complaint and had an independent person review this investigation. AKD was unhappy with the outcome of the investigation and after various discussions with CSW, including about returning to work, she felt she had no choice but to resign. AKD raised personal grievances for sexual harassment and unjustified dismissal.

The ERA explained that, based on the relevant sections in the Employment Relations Act 2000,[1] the following questions are relevant to assessing AKD’s claim for sexual harassment:

(a) Did AKD raise a complaint of sexual harassment?

(b) If so, did CSW investigate the complaint?

(c) Had AKD been sexually harassed — i.e., was CSW satisfied that AKD’s complaint had substance?

(d) Was AKD then subjected to further sexual harassment?

(e) If so, had CSW failed to take steps to prevent the further sexual harassment from occurring?

We note that this test applies specifically to harassment suffered from a co-employee, client or customer of the employer. The test differs when it comes to sexual harassment from an employee’s employer or a representative of that employer.

The ERA ultimately found that the personal grievance in relation to sexual harassment failed. There could be no suggested failure to take steps to prevent further harassment from occurring, as AKD never returned to work after her complaint and no further incident of sexual harassment occurred.

However, ADK’s claim for unjustified dismissal based on constructive dismissal succeeded. CSW had breached its obligation to provide a safe work environment by failing to:

  • intervene during inappropriate conversations; and
  • remind employees of the company’s expectations.

Although generic policies and training were provided in relation to sexual harassment, no action was taken in the face of actual unwanted and offensive sexual behaviour.

CSW further breached its duties of trust and confidence, and good faith towards AKD, by vilifying AKD through its investigation process and negotiations over resolving her personal grievance. CSW had wrongly formed the view that AKD had condoned and even been involved in conversations and behaviours of a sexual nature that were offensive or unwelcome in the workplace, and this wrongly coloured CSW’s finding on whether AKD had been sexually harassed. As such, CSW had failed to sufficiently investigate and address AKD’s concerns.

Interestingly, on the point of remedies, the ERA considered $30,000.00 to be an appropriate sum to award as compensation for hurt and humiliation. This is a slight cut above DML v Montgomery [2014] NZHRRT 6, where the HRRT awarded the employee $25,000.00 as compensation for sexual harassment. However, it is still well below the precedent-setting case of Hammond v New Zealand Credit Union Baywide [2015] NZHRRT 6, where the individual was awarded $98,000.00 as compensation for breaches to her privacy.

Employees deciding between the two forums should consider:

  • In line with this case of AKD v CSW, an employee with unjustified disadvantage and/or dismissal grievances, may wish to elect to pursue the sexual harassment claim alongside these grievances in the Employment Relations Authority and may succeed on unjustified dismissal in instances where they would not necessarily succeed in establishing sexual harassment.
  • The employee should consider if their grievance against the employer focuses on an incident of sexual harassment that was subsequently investigated and dealt with, or failure by the employer to investigate and/or deal with the complaint and take sufficient steps to prevent it happening again.
  • At the HRRT, employees can file sexual harassment claim against individuals, not just the employer.
  • We have typically seen higher average compensatory awards under the HRRT and that remains the case, but the compensation in AKD v CSW points to the Authority at least moving to the $30,000 mark where it considers it appropriate, making it a more viable option than it used to be for employees.

This is a sensitive and complicated area of law. Please get in touch with us if you would like any advice and/or assistance.

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[1] Sections 103, 108, 116, 117 and 118 of the Employment Relations Act 2000.

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