Turning lessons into action: how employers can learn from Swillhouse case

No workplace is free from sexual harassment. It seems that there are reports of sexual harassment occurring almost every week, from high-profile workplaces like Formula 1 to industries much closer to home.

In 2022, the Respect@Work legislation was implemented to bring in a raft of changes such as introducing a positive duty to eliminate sexual harassment and a new enforcement regime. Despite these changes, the reality is we’re still seeing businesses falling foul of eliminating the occurrence of sexual harassment in the workplace.

In August, Sydney hospitality group Swillhouse found itself at the centre of investigations into misconduct, poor workplace culture, and a failure to provide a safe working environment. The revelations have triggered a ripple effect, causing the entire hospitality industry to face increased scrutiny. Other prominent groups, like Merivale, are also coming under fire for similar allegations.

In this article, we’ll dive into what happened at Swillhouse, explain your employer obligations, and the proactive steps businesses must be taking to prevent sexual harassment from occurring in the workplace.

What happened at Swillhouse?

In August, the Sydney Morning Herald published an investigation into misconduct at Swillhouse venues. The investigation contained horrific stories about staff members being assaulted, bets on being the first employee to have sex with a customer, and drug and alcohol use during working hours. Employees detail poor responses from management, such as one employee who was offered counselling and then placed on a performance improvement plan, had hours cut, and a pay rate reduction after disclosing allegations to managers.

Another employee raised a complaint about being assaulted in the workplace, and in response, she was required to rewatch the CCTV footage of her attack before being promoted and advised it was her role to recruit more women and teach appropriate workplace behaviours. Swillhouse reportedly didn’t hire any female bartenders until 2014 at its Baxter Inn venue, and when they did commence, it was on the ‘have a beer’ policy to be hired, the employee had to be someone that other employees could have a beer with. This behaviour then became a standard when other staff members were discussing sexual conquests or rating the attractiveness of patrons.

What are your employer obligations?

There’s always a nexus between sexual harassment complaints and unsafe workplaces: not only do businesses have to ensure they’re taking steps to positively prevent sexual harassment under the Respect@Work legislation, but there are similar requirements to control physical and psychosocial hazards under Workplace Health and Safety (WHS) laws.

• Positive duty: positive duty requires proactive action to address sexual harassment in the workplace as a whole rather than treating sexual harassment as an individual grievance that is responded to reactively after a complaint is made. This means employers and PCBUs are required to take reasonable and proportionate measures to eliminate, as far as possible, unlawful sex discrimination, sexual harassment (including harassment on the grounds of sex), hostile working environments and acts of victimisation.

The Fair Work Act 2009 (FW Act) also protects employees from sexual harassment in the workplace. It’s important to remember this also considers harassment that’s perpetrated by a customer, client of the employer, or a visitor to the workplace. Employers can be held vicariously liable for the conduct of their employees when they aren’t taking measures to reduce sexual harassment. In considering the Swillhouse stories above, other areas of the FW Act, such as the general protections provisions are relevant too: employees shouldn’t be victimised or treated adversely when they raise allegations. That is, it is unlawful for an employer to reduce an employee’s pay (or engage in some other form of detriment) because the employee has raised a complaint in the course of their employment.

• Prohibition – hostile work environment: the FW Act was amended in 2023 to include a new prohibition on sexual harassment in connection with work. An organisation will be vicariously liable for the actions of their employees or agents who engage in sexual harassment in connection with work unless they can demonstrate that they took all reasonable steps to prevent sexual harassment.

So, what does this mean for you, and what steps should you be taking to tackle sexual harassment in the workplace?

Starting with preventative steps, a healthy workplace culture comes from having a no-tolerance approach to sexual harassment. Businesses should have policies in place preventing sexual harassment and provide training so that employees are aware of what’s considered inappropriate, and their obligations.

Having a clear reporting mechanism, and an investigation process that is confidential, impartial, and conducted with respect and discretion is essential too. Employees from Swillhouse talk about repeated failures of management to investigate claims at all, and when they did, being insensitive in the processes. The impacts of sexual harassment can be far-reaching and should attract appropriate sensitivity.

Doing nothing isn’t an option. In fact, doing nothing exposes organisations and workers to significant risk. When considering what actions are necessary and appropriate we would recommend the following considerations:

• Understand the nature and effect of the recent changes to the laws and ensure that all relevant stakeholders are equally aware of the nature and importance of those obligations, it may seem obvious, but it is impossible to comply with your positive duty if you’re not aware of the duty;
• Critically assess your compliance with the positive duty obligations. Businesses shouldn’t see any areas identified as failure, but rather an opportunity to close the compliance gap and achieve a significant improvement in the organisation’s culture as a result. It’s also strongly encouraged that organisations engage widely on this topic as a manager’s understanding of workplace behaviour may be different to reality; and
• While not a strict requirement, offering Employee Assistance Programs (EAP) can also be a useful device in supporting employees.

The backlash against Swillhouse has been significant; festivals cancelled, sponsors lost, and SafeWork investigations, not to mention the media attention, and public outrage. But women in the industry are hopeful that this will bring real change so that others don’t experience what they did. Preventing sexual harassment is no doubt a moral obligation as well as a legal one, and given the consequences, it’s in every business’s interest to ensure they’re meeting their obligations.

If you’re a client of Citation HR and this information has raised questions relating to Respect@Work laws, or you have another workplace matter you’d like to discuss, please reach out to our experienced workplace relations consultants via our 24/7 HR Advice Line.

Not a Citation HR client? To learn more about how Citation HR can support your business and streamline its people management, reach out to our friendly team for a confidential, no-obligation chat today.

About our author

Zaynab Aly is a Senior Workplace Relations Consultant at Citation HR. She has a particular interest in the retail industry and regularly provides advice on workplace matters to find solutions for clients.