Harassment: Doing nothing cost $61k

This Employment Relations Authority (ERA) case on sexual harassment shows the risk sits not just in the behaviour itself, but in how the employer responds when concerns are raised. The total awarded against the company was $57,000 (excluding costs). The ERA also imposed a personal penalty of $4,000 on the Director the harassment was reported to.

In this case (Gang v KNCC Limited), Ms Gang worked in a relatively small workplace where the harasser, Jae Jeong Jang, was a more senior colleague. From early in her employment, the relationship became uncomfortable and increasingly inappropriate.

The behaviour included comments about Ms Gang’s appearance and suggestions that she should dress in a more “sexy” way to appeal to customers. On one occasion, she was encouraged to act as a “honeytrap” in the workplace showroom.

The physical environment also became part of the problem. Mr Jang would stand very close to Ms Gang while she was seated at her desk, invade her personal space, and deliberately bang her chair. These interactions were not isolated incidents.  They occurred repeatedly, creating an ongoing sense of discomfort and pressure.

What is important in cases like this is that the behaviour often develops incrementally. It may start as ‘inappropriate comments’ but, over time, becomes a pattern that alters how the employee experiences the workplace each day. By the time a formal complaint is raised, the situation is often already entrenched.

Ms Gang initially raised her concerns informally with colleagues, testing whether others were aware of the behaviour or whether it would be taken seriously. She then escalated the issue to the Director of the business, Mr Huh.

Instead of investigating the concerns, taking steps to separate the parties or manage the risk, Mr Huh told the employee to be careful around Mr Jang because he had a reputation for this type of behaviour. The problem was acknowledged, but responsibility for managing it was shifted back onto the employee.  No meaningful steps were taken to stop the behaviour.

The situation did not improve. Eventually, Ms Gang concluded that the only way to protect herself from the situation was to resign. When she did so, she provided a written statement to the Board, outlining what had occurred and asking the employer to address the issues going forward.

Even then, the response remained inadequate. She was told she could pursue Mr Jang personally, but was encouraged to show some leniency towards him.

The ERA unsurprisingly determined that the conduct amounted to sexual harassment. The behaviour was unwelcome, repeated, and inappropriate, particularly given the power dynamic between the senior employee and the complainant.

However, the more significant issue was the employer’s response once it had been put on notice of the issue. The ERA found that the employer failed to take the steps required under the Employment Relations Act. There was no evidence of a proper investigation or any meaningful action to prevent the behaviour from continuing. As a result, the employer breached its obligations to provide a safe workplace.

This failure led directly to the outcome of the case. The employee’s claims of constructive dismissal and unjustified disadvantage were upheld. Ms Gang was awarded just over $15,000 in lost wages and $28,000 in compensation for hurt and humiliation. A penalty of $14,000 was awarded against the company for its breach of its health and safety obligations to provide a safe work environment for Ms Gang. Mr Huh, the Director who Ms Gang initially reported the matter to, was individually given a penalty of $4,000 for aiding and abetting KNCC in its failure to provide a healthy and safe workplace.

For employers, the lesson is straightforward but critical. Once a concern is raised, there is a clear legal obligation to act. That means taking the complaint seriously, assessing the risk, investigating and putting in place measures that stop the behaviour. A passive or informal response is not neutral. Employers are expected to actively manage behaviour that creates risk to employees.

In short, the real issue in this case was not just what one individual did. It was what the organisation did not do.