Are you familiar with the old legal mindset that viewed sexual harassment payouts through the lens of the "severity of the physical act"? For decades, the logic was simple (and flawed): a "minor" touch resulted in a minor payout, while "major" incidents led to larger settlements.
But the legal landscape in Australia has shifted fundamentally.
The recent case of Leung v Chung in the Supreme Court of Victoria has sent a shockwave through HR departments and boardroom meetings across the country. It’s no longer just about what happened; it’s about who it happened to and the lasting, subjective damage they carried away from the workplace.
What does this mean for you? It means that if your business is still treating harassment prevention as a "tick-a-box" exercise, you are sitting on a $140,000-plus ticking time bomb.
What actually happened in Leung v Chung?
To understand why the court ended up where it did, we need to look at the exact details found by the Tribunal. This wasn't a case of a single, isolated mistake. It was a calculated pattern of behavior that escalated over several months.
Essentially, the Respondent’s actions created a persistent environment of discomfort and fear. The Tribunal confirmed the following exact instances:
- September and October 2019: On three separate occasions, the Respondent touched or slapped the Applicant on the buttocks while he was sitting at his desk and she was standing next to him.
- November 2019: The Respondent made vulgar comments about the Applicant’s body shape, specifically stating: ‘Why is your upper body so big but your bottom so skinny – your bottom has no meat!’
- 6 January 2020: The Respondent put his arm around the Applicant’s shoulders, drew her to him, and tickled her waist.
- 7 January 2020: The Respondent gave the Applicant a shoulder massage.
On paper, some old-school managers might look at a "shoulder massage" or a "waist tickle" and think it’s just poor boundaries. The Court disagreed. This was a sequence of inappropriate touching that stripped the employee of her dignity.
Why did the court call the initial $10,000 award 'derisory'?
In the first instance, the Tribunal awarded the victim $10,000 in general damages. To put it bluntly, the Supreme Court of Victoria found this amount to be "derisory."
In plain language: the court thought the $10,000 payout was an insult.
The Judge pointed out that the lower Tribunal had focused too much on the "objective" nature of the acts, treating them as relatively minor physical contacts, rather than looking at the actual damage done to the human being on the receiving end.
This is a critical turning point for positive duty obligations. If you are only training your staff to avoid "major" incidents (like sexual assault), you are missing the forest for the trees. Courts are now making it clear that a series of inappropriate comments in the workplace and "minor" touches can lead to massive financial and legal consequences.
What is 'Subjective Impact' and why does it matter?
This is where the $140,000 figure comes from. The court shifted its focus from the "slap" to the subjective impact on the victim.
The Applicant in this case didn't just walk away with a bruised ego; she walked away with diagnosed PTSD, severe anxiety, and a total loss of her professional career. Because the harassment triggered such a profound psychological response, the court decided the compensation had to match the reality of her suffering.
This means that the same act performed on two different people could result in two vastly different payouts.
If an employee has a history of trauma, or if the harassment causes a specific psychological break that prevents them from working ever again, the employer is on the hook for that total loss. The final award in this case exceeded $140,000, consisting of $110,000 in general damages plus significant lost wages.
How do Positive Duty obligations change the game?
In the past, many employers relied on a "reactive" model. If someone complained, they investigated. If no one complained, they assumed everything was fine.
Those days are over.
Under current legislation, you have a positive duty to take "reasonable steps" to prevent sexual harassment from happening in the first place. You cannot wait for a complaint. You must be proactive in identifying risks and implementing measures to stop the escalation of behavior: like moving from hugging in the workplace to more invasive touching.
If the employer in the Leung case had recognized the "body shape" comments in November as a red flag, they might have intervened before the January incidents occurred. This is what positive duty looks like in practice. It’s about stopping the "body meat" comments before they turn into a $140,000 lawsuit.
Can you prove you took 'Reasonable Steps'?
If an incident like this happens in your business, your primary shield is the vicarious liability defense.
To successfully use this defense, you must prove that you took all reasonable steps to prevent the harassment. A 20-minute video that employees play on mute while they scroll on their phones will not hold up in court. The Australian Human Rights Commission (AHRC) is increasingly looking for "active" measures.
This is where Positive Duty's training differs.
Our training isn't just a slide deck. It includes:
- Active screen engagement: Ensuring employees are actually participating, not just clicking "Next."
- 3rd-party verification: Providing a robust audit trail that proves your team understood the material.
- Evidence-based content: Directly addressing the types of sexual harassment that lead to these high-value court cases.
If you can’t prove your training was effective, you are likely to be held vicariously liable for the actions of your employees. You can check your current standing with our vicarious liability defense checklist.
The Escalation Ladder: Why 'Respect at Work' Compliance is non-negotiable
The Leung case is a perfect example of the "Escalation Ladder." Harassment rarely starts with a major incident. It starts with a joke, an inappropriate comment, or a disrespectful workplace culture.
When these "minor" things are ignored, the perpetrator feels emboldened to climb the ladder. In this case, the ladder looked like this:
- Buttock slapping (September)
- Body shaming comments (November)
- Tickling and forced proximity (January)
- Unwanted massages (January)
By the time it reached the Supreme Court, the "small" things had accumulated into a life-changing trauma for the victim. Your job as an employer is to kick the ladder out from under the perpetrator at step one.
Are you audit-ready?
The AHRC now has the power to investigate businesses for compliance with positive duty. They aren't just looking for a policy in a handbook; they are looking for a culture of prevention.
What will they check?
- Have you conducted a workplace risk assessment?
- Is your training tailored to your specific industry risks?
- Do your leaders model the right behavior?
If you're unsure where you stand, read our guide on the 7 things the AHRC will check for.
Putting it simply: The cost of inaction
A $140,000 payout is just the tip of the iceberg. When you factor in legal fees (which often exceed the settlement amount), the loss of productivity, the damage to your brand, and the impact on staff morale, the true cost of a harassment claim can easily reach half a million dollars.
Contrast that with the cost of being proactive.
Investing in respect at work compliance and understanding what is positive duty is not just a legal requirement: it is a savvy business decision. It protects your people, and in doing so, it protects your bottom line.
Don't wait for a "derisory" award to turn into a Supreme Court nightmare. Start implementing positive duty reasonable measures today.
Positive Duty provides the most robust, active training solutions in Australia to help businesses meet their legislative requirements and build safer, more respectful workplaces. If you need to ensure your vicarious liability defense is watertight, reach out to us for a quote or explore our manager-specific training.