Employee Successfully Sues Employer for Sexual Assault by On-call Caretaker

In the recent decision of Oaks Hotels & Resorts Ltd v Knauer & Ors¹, the Queensland Court of Appeal found an employer vicariously liable for its employee sexually assaulting another worker.

Background

Ms Knauer was employed as a guest services agent by a wholly owned subsidiary of Oaks Hotels & Resorts Ltd (“Oaks”). To help with Ms Knauer’s transfer to Brisbane, Oaks provided her with free accommodation – a unit shared with a caretaker. The caretaker worked for Oaks and was on-call from 10pm to 6am for after hour services and emergencies.

One morning at 5am Ms Knauer found the caretaker naked in her bedroom and he sexually assaulted her.

The Claim

Ms Knauer lodged a claim in the Queensland Civil and Administrative Tribunal (“QCAT”) against Oaks, her employer and the caretaker for sexual harassment. The claim against Oaks was that Oaks was vicariously liable for the caretaker’s actions under section 133(1) of the Anti-Discrimination Act 1991 (“the Act”), which provides:

“If any of a person’s workers or agents contravenes the Act in the course of work or while acting as agent, both the person and the worker or agent, as the case may be, are jointly and severally civilly liable for the contravention, and a proceeding under the Act may be taken against either or both.”

Section 133(2) of the Act provides a defence to a breach of Section 133(1) if it can be shown that the employer took reasonable steps to prevent the worker or agent contravening the Act. Oaks did not rely on Section 133(2) but instead argued that the caretaker’s conduct did not occur “in the course of work”.

At first instance, QCAT held Oaks liable as the caretaker indecently assaulted Ms Knauer “in the course of work”. The claim against the employer was settled and the caretaker did not appear.

QCAT awarded Ms Knauer $328,316 in compensation. After deducting $15,000 paid in settlement of her personal injuries claim against her employer, Oaks was required to pay her $313,316.10².

The Appeal

Oaks appealed to the Court of Appeal on the grounds that the assault did not occur “in the course of work” and the QCAT erred in its findings.

‘Work’

The Court of Appeal held “work” comprehends the more general meaning “employment” or “job”. The purpose of section 133 is for persons described in section 133(1), such as employers, to take positive steps to eliminate sexual harassment by those who work for them. By interpreting “work” broadly, it achieves the Act’s purpose to “promote equality of opportunity for everyone…”.

“in the course of work”

The Court then construed “in the course of work” as broadly as “in the course of employment” pursuant to The Commonwealth v Lyon³.

In Lyon, an employee sustained injuries while playing rugby league with other employees during work hours, which was encouraged by his employer. The Court found the injuries were sustained in the course of employment and he was entitled to worker’s compensation. The Court in Lyon held “in the course of employment” means “while the worker is engaged in the work which he is employed to do or in something which is a concomitant of, or reasonably incident to, his employment to do that work”.

Findings

The Court in this case held:

1. The scope of the duty under Section 133(1) should not be determined in the same context as common law vicarious liability of an employer for the negligent or intentional criminal acts of an employee;
2. The duty under Section 133(1) can extend to criminal acts by employees conducted in the course of work (whereas an employer’s duty under common law generally does not extend to these acts: see Pavkovic v Gittani Stone);
3. The caretaker’s conduct within his work hours was enough to constitute conduct “in the course of work” despite that he was not undertaking any active duties at the time such as attending to an emergency or repair i.e. no causal connection is required between the caretaker’s occupation and his conduct.

Implications

Oaks did not raise a defence under Section 133(2) and we assume this is because it could not discharge its evidentiary onus that it implemented any preventive measures prior to the accident.

However, the question is what reasonable measures would be considered adequate in this case if:

• There was no evidence the caretaker had a prior history of sexual assault;
• Oaks did not have prior knowledge that the caretaker had a propensity for sexual assault;
• Ms Knauer did not request separate living quarters because residing with the caretaker made her feel uncomfortable.

Arguably, Oaks would be entitled to a defence under Section 133(2) if it had ensured the caretaker had received adequate training in respect of workplace harassment. We doubt Oaks’ obligations would extend beyond this unless it had prior knowledge of the caretaker’s propensity for sexual assault.

Employers need to be mindful that even if they successfully defend these types of claims at common law, a worker may still have recourse under the Anti-Discrimination Act, which entitles the employee to a wide range of remedies, including but not limited to, damages for personal injury.

The message is that an employer will be found liable for damages suffered by a worker if it does nothing to prevent sexual assault by its workers or agents in the workplace.

If you require further information on what your organisation can do to minimise its exposure in these types of cases, please feel free to contact us.

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