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How to Avoid Employer's Liability When a Hotel or Taxi Becomes an Employee’s Workplace

Alison Rees | April 27th, 2017

Let’s be clear: we are not talking about hoteliers or taxi drivers. Rather, a recent case held that for the purposes of a sexual harassment claim a taxi and a hotel near an employer’s offices were also part of their employee’s workplace. How can you avoid employer's liability?

The complainant employee alleged that a contractor, who was contracted to work at her office workplace, sexually harassed her. The incidents occurred in a number of places, including a hotel and a taxi – both areas, geographically speaking, were totally separate from the offices of her workplace.  She sued the contractor, as well as her employer.

The Sex Discrimination Act (“the Act”) prohibits sexual harassment by employees, partners and contractors. For contractors, complainants must show sexual harassment occurred at a workplace.

How to Avoid Employer's Liability When a Hotel or Taxi Becomes an Employee’s Workplace

So when does a hotel or taxi become a workplace?

A workplace is defined under the Act as “a place at which a workplace participant works or otherwise carries out functions in connection with being a workplace participant”. Beyond that, however, and until this case, there was no case law dealing with this definition and the specific meaning of a “workplace”.

The contractor accused of sexual harassment argued that the acts in question didn’t occur at the workplace as a “workplace” is confined to the area exclusively occupied by the employer and did not include even common areas on the floor of the office building. As a taxi and the hotel were not the “workplace”, the Act should not apply.

However, the Court decided that a “workplace” is not confined to the place of work of the participants but extends to a place at which the participants work or otherwise carry out functions in connection with being a workplace participant.

Due to that, the taxi was a workplace because it was used in connection with the parties’ work. The hotel was also a workplace, because the parties moved there from the office, directly due to things which occurred at the office. There was a ‘link’ between the office and the hotel, which was work related.

As an employer, you need to be aware that if co-workers meet outside of the traditional workplace to carry out work related functions, your obligations regarding sexual harassment may extend to what happens in the other place.

How can you guard against these incidents occurring and avoid employer's liability?

This decision puts employers in a difficult position: when an employee leaves the traditional workplace, employers do not necessarily have control regarding where they go next.

The best thing you can do as an employer to protect yourself from this sort of claim and avoid employer's liability is to:

1. Make it clear, both through training and policies, that the requirement for staff to refrain from engaging in sexual harassment extends to anywhere that staff are undertaking work-based activities, work-related events and areas in the immediate vicinity of the formal workplace.

2. Be vigilant in investigating any complaints of sexual harassment, act quickly and foster a culture where employees feel safe to speak up against this type of behaviour.

One of the issues in the case mentioned here which led to the hotel being classified as part of the workplace was that the contractor had engaged in sexual harassment before the incident in the hotel. The catalyst for going to the hotel was so that the complainant could continue working in a safe place with other people around (she and the contractor had to work late into the evening and he had been harassing her in the unpopulated office).

Had the previous harassment been appropriately dealt with, including an investigation and appropriate action taken, there may not have been any reason to make this type of ruling.

As always, particular circumstances will require specific advice. If you have any concerns or feel that your policies and procedures in this area could be improved, don’t hesitate to get in touch with us.

Alison Rees

Alison is experienced in sales and purchases of businesses, including transactions for medical practices and pharmacies, and sales of businesses which span a number of states. Her business transactions matters have involved both large and small businesses, and Alison has received recognition for handling these matters in a way that is most efficient and cost effective for the particular client.