HREOC Website: Information for Employers

Information for Small Business

Anti-discrimination policies and complaint handling for small business

(Small business is defined as an enterprise employing fewer than 20 people)

Vicarious liability

Under federal anti-discrimination law an employer, regardless of their size, may be legally responsible for discrimination and harassment which occurs in the workplace or in connection with a person's employment unless it can be shown that 'all reasonable steps' have been taken to reduce this liability. This legal responsibility is called 'vicarious liability'.

'All reasonable steps' is not defined in the legislation because what is reasonable for a large corporation may not be reasonable for a small business. Rather they are worked out on a case-by-case basis. However, it does mean that employers must actively implement precautionary measures to minimise the risk of discrimination and harassment occurring.

This section also includes guidelines on what 'reasonable steps' employers should take to deal with discrimination and harassment and reduce their 'vicarious liability'.

Good management

The role of management in small business is particularly important. The working relationship between management and their employees tends to be close and management is usually aware of what is going on in the business. This puts them in a good position to take direct action if they observe or are otherwise alerted to harassment. It also means they need to demonstrate effective leadership by setting an example with their own behaviour and promoting a climate of mutual respect in the workplace. Training for general and supervisory staff should incorporate information on discrimination and harassment.

Small business enterprises are encouraged, where necessary, to adapt particular recommendations for larger business, which are shown under Policies in Practice, according to their needs, circumstances and resources.

Policies

It is recommended that small businesses, particularly those nearing 20 employees, have a written policy on discrimination and harassment, particularly sexual harassment. Generic model harassment policies for large organisations can be adapted by small business to suit their particular needs. You can also contact employer organisations, small business associations and industry associations for assistance.

Small businesses in a particular industry sector may wish to consider developing a joint policy for implementation throughout the industry. Interested businesses should approach the relevant industry association for assistance in co-ordinating the process.

Complaints

Employers in small business should nominate themselves or a responsible senior employee as a discrimination or harassment complaints officer. This person should be provided with any training or resources offered by employer organisations, small business associations, industry associations, HREOC or state/territory anti-discrimination agencies. The general principles that apply to informal and formal complaint procedures should be observed.

Assistance with harassment issues

If assistance is required to deal with a complaint, advice should be obtained from employer organisations, small business associations, industry associations, HREOC or state/territory anti-discrimination agencies.

The employer should distribute brochures and display posters on discrimination and harassment. These can be obtained from HREOC, state/territory anti-discrimination agencies and employer organisations.

A woman made a sexual harassment complaint against a male co-worker in a small cleaning business. She told her employer about the harassment but it continued.
Since her employer had actual knowledge of the harassment, it was not necessary for the court to determine whether all reasonable steps had been taken. However, Justice Wilcox made important comments indicating what a small business must do to establish that it took all reasonable steps to prevent harassment. He said:

[i]t may be more difficult for a small employer, with few employees, to put into place a satisfactory sexual harassment regime than for a large employer with skilled human resources personnel and formal training procedures. But the Act does not distinguish between large and small employers, and the decided cases show that many sexual harassment claims concern small businesses, often with only a handful of employees. A damages award against such an employer may have devastating financial consequences; so there is every reason for such an employer to be careful to prevent claims arising.

Justice Wilcox said that there was a “simple procedure” that would go “a long way” towards allowing a small business employer to argue that all reasonable steps had been taken to prevent sexual harassment. This was:

…to prepare a brief document pointing out the nature of sexual harassment, the sanctions that attach to it and the course that ought to be followed by any employee who feels sexually harassed. …[S]uch a document could be provided to each employee on recruitment, as a matter of routine and before there was, or could be, any suggestion that the employee had done anything wrong or was the victim of inappropriate conduct.

Gilroy v Angelov (2001) 181 ALR 57