The High Cost of Failing to Prevent Bullying and Harassment in the Workplace

In a case which emphasises the importance of employers preventing and properly responding to allegations of bullying and sexual harassment, the Supreme Court of Victoria[1] has awarded an employee in excess of $1.3 million as result of her employer’s negligence.

The decision considered a claim by Ms Kate Mathews against her employer.  Ms Mathews alleged she had sustained serious chronic psychiatric injury caused by the negligence of her employer in failing to provide her with a safe working environment; and that her employer was vicariously liable for the tortuous acts of its employees and subcontractors.

The alleged offensive behaviour

Ms Matthews worked as a labourer for just under two years. During this period, Ms Matthews alleged that she was subjected to numerous offensive remarks and conduct, including examples such as the following:

  •  “You are a spastic, a bimbo”;
  • “Get out. You are fucking useless”;
  • “Kate, let’s put a pole in the yard and you can get it off”;
  • “‘I had a great wank over you last night”;
  • ‘CH’ said to Ms Mathews that he would like to throw her to the ground, ‘come all over her and then watch her lick it off;
  • Ms Mathews announced that she was going to lunch. C H said to her ‘I am going to follow you home, rip your clothes off and rape you’;
  • A subcontractor slapped Ms Mathews on her bottom.
Employer’s response to complaints

Ms Mathews argued that she was reluctant to complain to her foreman, as he was responsible for some of the offensive remarks. On occasions when Ms Mathews complained to the Area Manager, he said words to the effect of ‘leave it with me.’ however nothing appeared to have been done. Ms Mathews was moved to a different crew from September 2009 to June 2010 and then moved back to the original crew. Ms Mathews alleged that when she complained that she had been moved back to this crew, the foreman said ‘You will work with whoever I fucking tell you to work with.”

On 1 July 2010, Ms Mathews contacted who she believed to be Human Resources in relation to a threat of rape from ‘CH’. In response, the person who she reported this to invited her to “…come to my place in Warrandyte, and we will have a drink and talk about it”.  After this, she received a disturbing anonymous phone call. Ms Matthews has not worked since that date.

Employer’s admission of liability

The employer initially denied liability and alleged contributory negligence. However during the hearing, the company admitted negligence, and dropped its allegation of contributory negligence. The question of quantum was therefore the only issue to be determined.

Consideration of video evidence

The employer tendered three DVDs showing film of Ms Mathews taken covertly at different locations at different times. The employer argued that whilst Ms Mathews consistently presented to doctors in a distressed state, the films showed her to occasionally smile, engage with a shopkeeper, walk with her mother and talk on the telephone. The videos were also said to demonstrate that Ms Mathews was capable of sustained physical activities, specifically gardening and moving wheelbarrow-loads of wood around her house.

However Justice Forrest considered that caution must be exercised in evaluating such covertly recorded films in personal injury matters, particularly in cases related to psychiatric injury and stated that nothing could be inferred from the evidence.

Significant damages awarded

Justice Forrest found that Ms Mathews suffered chronic and significant psychiatric injuries that have and will continue to diminish the quality of her life. He also found that she suffered injury to her jaw (as a consequence of teeth grinding related to her psychiatric illness). It was determined that Ms Matthews had no capacity to work, and will not work again.

Justice Forrest assessed Ms Mathews’ general damages at $380,000. This amount included compensation for both her psychiatric injuries and her jaw injury. Ms Mathews was also awarded past economic loss of $283,942 and $696,085 for loss of future earning capacity until retirement age. This equated to a total payout of over $1.3 million.

Implications for employers

The significant damages awarded to Ms Mathews in compensation for her employer’s negligence, reflects the substantial impact that abuse, bullying and sexual harassment can have on an employee’s life. The case also highlights the risk faced by employers in failing to provide a safe work environment in terms of facing a time consuming and costly legal claim as well as embarrassing media coverage.

The decision has the potential to increase the likelihood of significant damages awarded in successful bullying and harassment cases. It is therefore critical for employers to have in place proper policies, procedures and systems to prevent and respond to workplace bullying and harassment – and for employers to properly implement such procedures.

The case highlights the importance of treating all complaints seriously and responding in an appropriate manner. Once an employer becomes aware of offending conduct, it must act to protect the employee from being subject to further offensive conduct. In matters involving serious allegations, it may be most appropriate to investigate the complaints internally or by engaging an expert external investigator.


[1] Mathews v Winslow Constructors (Vic) Pty Ltd [2015] VSC 728


This article was written by Sarah-Jayne Myers, Senior Associate of Workdynamic Australia. The information in this article is for information purposes only and does not constitute legal advice. You should obtain specific advice relevant to your circumstances.