Harassment a risk for small businesses

Dec 6th, 2017

The latest sexual harassment allegations should be a wake-up call for small enterprises that are at risk from moronic employees who cannot keep their hands or inappropriate comments to themselves in the workplace.

Truth is, we don't know enough about the incidence of sexual harassment in small businesses that have fewer than 15 employees or $2 million in annual revenue. Or whether small enterprises are taking enough steps to safeguard against harassment risk and protect employees.

The Australian Human Rights Commission says a "significant number of sexual harassment complaints received … involve small businesses". But much data on this issue seems dated or anecdotal, such as reports earlier this year of harassment in start-up tech firms.

Moreover, sexual harassment stories mostly appear through a big-business lens. For example, a CEO uses his position to harass an employee or has an undisclosed work relationship. Or a banker thinks nothing of harassing a worker with  lewd jokes on the dealing-room floor.

Harassment responses also have a big-business perspective. A board of an ASX 200 company may withhold a bonus to a CEO who did not disclose a romantic relationship with his assistant. Or a large superannuation fund asks a board about their company's culture, employee turnover and safety. It's good stuff, but not representative of millions of small enterprises in Australia.

We do know that sexual harassment against women and men is rising. The latest Personal Safety Survey by the Australian Bureau of Statistics found the number of women and men who said they had been sexually harassed in the past year was up slightly on 2012.

We also know that small businesses are less equipped to deal with this issue than big business, and relatively more exposed. Most small enterprises do not have a human resources team or staff with specialist skills to handle harassment reports. Often, micro-size firms lack resources to develop and enforce policies and procedures, to combat harassment.

Unlike big business, small enterprises cannot write a quick cheque to settle a harassment issue or use an in-house or external legal team to fight a claim. Any damages from harassment claims come from the small firm's bottom line and ultimately its owner's pockets.

Imagine a small business that receives a claim from an employee who was repeatedly harassed at work and consequently suffers depression. The business did not take reasonable steps to prevent harassment and ignored the worker's pleas for help. Her manager thought lewd jokes and questions about the worker's love life were harmless fun.

Now the business faces a six-figure claim that will crunch its profits, breach the firm's loan covenants and possibly lead to the owner losing his house (used as loan collateral). All because the small business did not understand sexual harassment or its implications.

We also know that more reports of alleged sexual harassment in the United States and Australia are emerging. A broader cleansing of toxic workplace cultures is long overdue and hopefully it encourages people who were harassed to come forward. If so, more small enterprises could face sexual harassment claims from current or past employees in the next few years.

Still, it's hard to know how big a problem this is without having robust, empirical data on the incidence of sexual harassment in Australian small business over many years. But suffice to say, this issue should be on the radar of every small enterprise.

I'm not suggesting that owners of small businesses go overboard or become alarmed by the risk of harassment. Most small businesses do the right thing. Some treat  staff like family members and deeply understand work and personal boundaries.

Hiding inappropriate behaviour is harder because of the organisation's small size. And many small firms do not have hyper-competitive organisation cultures, such as those in investment banks, where some staff think they have a licence to behave badly.

That said, no small business owner should assume their firm is immune to the risk of sexual harassment or that no extra effort is needed to ensure workplace safety.

A starting point for small business is understanding what constitutes sexual harassment in the workplace. A sexually suggestive joke, intrusive questions about a worker's personal life or comments about their appearance might seem harmless to some, until the recipient feels harassed by the unwanted comments and rightly complains.

The next step is ensuring the firm has a simple written sexual harassment policy that all employees are aware of and understand; and that the policy is updated and enforced. This could be as straightforward as a new employee having the policy explained to them or an owner reminding all staff of the policy at the start of each year.

Having a process to report sexual harassment complaints, document and handle them is equally important. The key is showing that reasonable steps were taken, in the context of the firm's size and circumstance, to prevent sexual harassment in that workplace.

Every business, of course, is different and there is no blanket rule on what small firms must do to prevent sexual harassment in their workplace. Seek legal advice or read free guidelines on sexual harassment through the Human Rights Commission or other reliable sources.

The last thing we want is small firms bogged in extra compliance or workplaces turned into dull, soulless places. The best defence is common sense and respect for colleagues. Take the issue seriously, have a policy, communicate it to staff and act promptly on complaints. Make an example of those who breach the policy. That should be standard business for most small firms.

Those that cling to an inappropriate culture and think occasional harassment is harmless fun only have themselves to blame when more people feel empowered to take on workplace creeps – and the firms liable for them – as other harassment allegations emerge.

SMH December 2-3, 2017

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