New accessorial liability for solicitors under the Sex Discrimination Act and fresh obligations under Conduct Rule 42

The wide-ranging amendments to the Sex Discrimination Act 1984 (Cth) (‘the SD Act’), which commenced pursuant to the Sex Discrimination and Fair Work (Respect at Work) Amendment Act 2021 (Cth), were dealt with comprehensively in ‘The road to reform: key changes in Australia’s sexual harassment laws’ 83 Law Society of NSW Journal, November 2021, 70. The broad and important changes for the legal profession and the Australian community are not therefore described in depth here.

The changes include the introduction of an additional prohibition of harassment on the ground of sex (or ‘sex-based harassment’), as well extending the term ‘worker’ so that the SD Act applies to self-employed individuals (such as self-employed solicitors).  For the first time, accessorial liability under section 105 of the SD Act attaches to both sexual harassment and the new sex-based harassment.

Implications for Rule 42 of the Conduct Rules

The focus of this article is on the implications of the above changes for Rule 42 of the Legal Profession Uniform Law Australian Solicitors’ Conduct Rules 2015 (the ‘Conduct Rules’). The implications are significant given the various conduct that falls within the definition of ‘unlawful discrimination’, under section 3 of the Australian Human Rights Commission Act 1986 (Cth) (the ‘AHRC Act’). Such conduct is also caught by Rule 42 by reason of the definitions of ‘discrimination’ and ‘harassment’ (but not sexual harassment, which is nonetheless caught for the reasons below). The definitions are found in the Glossary of the Conduct Rules:

‘discrimination means discrimination that is unlawful under the applicable state, territory or federal anti- discrimination or human rights legislation.’

‘harassment means harassment that is unlawful under the applicable state, territory or federal anti-discrimination or human rights legislation.’

At the federal level, the AHRC Act provides the legislative mechanisms by which complaints are made under the SD Act by way of the overarching definition of ‘unlawful discrimination’. ‘Unlawful discrimination’ is defined under section 3 of the AHRC Act, which is extremely broad and incorporates inter alia ‘any acts, omissions or practices’ proscribed by the operative provisions of the SD Act. It expressly includes all forms of direct and indirect sex discrimination, sexual and sex-based harassment as well as victimisation (generally defined as subjecting a person to a detriment because they have, or intend to, make a complaint under anti-discrimination legislation). Such conduct is therefore caught by Rule 42.

Accessorial liability linked to prohibition against sexual and sex-based harassment

Section 105 provides: ‘A person who causes, instructs, induces, aids or permits another person to do an act that is unlawful under Division 1, 2 or 3 of Part II shall, for the purposes of this Act, be taken also to have done the act’.

This has significant implications for solicitors who have the power to prevent or stop conduct in prima facie breach (where that conduct is later found to be in breach; there can be no accessorial liability where there is no principal offence (Cain v Doyle (1946) 72 CLR 409 at [419] and [426])) but who take no action to prevent it, or who even encourage it.

The word ‘permits’ in particular has been held to be ‘of very extensive connotation’ by virtue of the ‘the primary [dictionary] meaning of “permit” [being]: “to allow, suffer, give leave; not to prevent”’ (Rossi v Qantas Airways Limited (No 2) [2020] FCA 1080 (at [58]) citing Adelaide City Corporation v Australasian Performing Rights Association Ltd (1928) 40 CLR 481; [1928] HCA 10). Under this principle, a person has only ‘permitted’ conduct to occur if they have the ‘legal power to prevent it’ and do not.

Authorities considering section 105 and equivalent provisions indicate that the power to prevent is not merely one of direct intervention, but also of ‘not creating a situation where it will or may take place or altering a situation so it will not continue’ or if one ‘knowingly places the victim… in a situation where there is a real, and something more than a remote, possibility that the unlawful conduct will occur’, especially if the person can put or can require measures to be put in place to prevent such conduct that the power to prevent is not merely one of direct intervention (Elliott v Nanda & Commonwealth (2001) 111 FCR 240 at [163]).

These principles are also reflected in the Revised Explanatory Memorandum (at [168], [207], [209]). This is the first time section 105 has linked the possession of authority, by reason of being in a managerial or supervisory position, or even in a position of de facto power, to the prohibition against sexual and sex-based harassment.

The obligations (including in respect of the word ‘permits’) under section 105 are graduating, in that they are likely to be higher for those with greater supervisory or managerial power; inversely, they are likely to be lower or non-existent for those who do not have such obligations or hold such positions (see, e.g. Matthews v Hargreaves (No 4) (2013) 274 FLR 138 at [97]-[99], [111]-[112], in respect of section 123 of the Disability Discrimination Act 1992 (Cth)). Finally, conduct giving rise to accessorial liability has been held to constitute ‘unlawful discrimination’ within the ambit of the AHRC Act (Picos v Servcorp Limited [2015] FCA 344 at [58] per Perry J), meaning that such conduct is also likely to be caught by Rule 42.

Changes to the objects of the SD Act and implications for damages

Amendments to the objects of the SD Act are said to be aimed at making ‘it clear that in addition to the elimination of discrimination and harassment, the SD Act aims to achieve, so far as practicable, equality of opportunity between men and women’ (Revised Explanatory Memorandum at [6]). These amendments have implications for the quantum of damages in respect of breaches of the SD Act, given the statutory objects inform assessment of damages under section 46PO(4)(d) of the AHRC Act (Friend v Comcare (2021) 308 IR 445 at [81]).

Simultaneous proceedings under the SD Act and complaints under Rule 42

A person may make a complaint under Rule 42 and simultaneously commence proceedings against the same solicitor(s) in the Federal Court or FCAFCOA alleging breaches of the SD Act, including alleging primary, vicarious or accessorial liability in respect of sexual or sex-based harassment, direct or indirect sex discrimination and/or victimisation.

While any underpinning complaint to the Australian Human Rights Commission can be terminated by the AHRC President for the reasons outlined in section 46PH(1)(d)-(g) of the AHRC Act (on the basis, generally, that there is a more appropriate remedy), that merely lays the foundational jurisdiction for the complainant to proceed to the FCA or FCAFCOA (although leave of the Court is required in certain circumstances) (section 46PO(1) of the AHRC Act).

Therefore, the same or similar alleged conduct could give rise to disciplinary proceedings against the solicitor(s) simultaneously with what could transpire to be substantial damages, given the amendments to the objects of the SD Act, historic judicial treatment of those objects and judicial recognition of shifts in community standards, which translates to increased awards (see, e.g. Beesley and Hughes Lawyers v Hill [2020] FCAFC 126, per Perram J (with Collier and Reeves JJ agreeing) (at [8]) and generally; Vitality Works Australia Pty Ltd v Yelda (No 2) [2021] NSWCA 147 (at [125]) per McCallum J (as her Honour then was) agreeing with the findings of Bell P (as his Honour then was) and Payne JA).

Conclusion

The full implications of these amendments are yet to be seen but the amendments have the potential to be profoundly impactful. Not only are solicitors subject to the new prohibition against sex-based harassment under the SD Act, but solicitors holding some position of authority may be accessorily liable for the first time where they witness contravening conduct but take no steps to stop it. Such conduct is capable of giving rise to increased awards of damages due to the changes to the objects of the SD Act. Solicitors remain potentially primarily or vicariously liable in respect of any findings of indirect or direct sex discrimination, sexual harassment and/or victimisation. Simultaneously, solicitors could face disciplinary action for breaches of Rule 42 in respect of such conduct.

Penny Thew is a Barrister in Greenway Chambers.