ANU Respect@Work report recommends employers pay employee's sexual harassment legal costs

The Attorney-General's Department commissioned the report as part of Labor's promise to implement all 55 recommendations of Sex Discrimination Commissioner Kate Jenkins' 2020 Respect at Work report into sexual harassment in Australian workplaces.

Under recommendations 24 and 25 of the Respect at Work report, research was conducted into damages awarded in sexual harassment matters and amending the Australian Human Rights Commission Act to insert a cost protection provision consistent with the Fair Work Act.

Lead researcher, Professor Margaret Thornton said the main barrier to seeking damages for sexual harassment has been paying legal costs.

"At the federal level, with this change that occurred in 2000, it meant that the losing party would have to pay the other side's costs. So if a complainant wasn't able to make out her case successfully, she could be bankrupted by having to pay the costs, because she can actually be sued for failure to pay costs."

She said costs are "a huge disincentive to go into a formal hearing", leading to only about 1 per cent of all complaints lodged going to a formal hearing, with the rest being settled in conciliation.

The Labor government legislated the final seven Respect at Work recommended legislative changes in November, after the Morrison government legislated six of the 13 recommended changes.

The Albanese government made last minute changes, scrapping the cost neutrality model in the legislation, where each party pays their own legal costs and potentially the other party's if directed by a court.

"The Attorney-General is still looking at the issue of how one should deal with costs, because even if you have a system as applies under the Fair Work Act, whereby each party pay their own costs, that can still be a disincentive, because it's very hard for an individual without legal qualifications to argue a case before a court," Professor Thornton said.

The ANU report recommends an "asymmetric" cost model, similar to whistleblower laws, would be a fairer model and in the public interest.

"The cost model that we recommended in the report was to have a system that was not going to be cost neutral," Professor Thornton said.

"So it's a rather more unusual system whereby an applicant whose instituted proceedings then would not have to pay costs, even if they lost, unless the matter was vexatious or they'd acted unreasonable and so it would mean that the respondent would have to pay the costs."