DJs won't pay punitive damages to Kristy Fraser-Kirk Blair Speedy From: The Australian August 14, 2010 12:00AM
AT David Jones's flagship store in central Melbourne this week, new chief Paul Zahra quickly acknowledged the elephant in the room.
"I'd like to reiterate that David Jones does not tolerate harassment in any form," he said, eliciting raised eyebrows and nods of approval from the 300-odd guests.
Chairman Robert Savage said he and Mr Zahra decided before the event that they would have to address the allegations of DJs publicist Kristy Fraser-Kirk, who is suing the company for $37 million in punitive damages over claims she was sexually harassed by former chief executive Mark McInnes.
"Paul and I talked about whether we should say anything or just ignore it, and we felt it was better to make a brief remark, or there might have been people in the audience who felt we were trying to ignore the issue, and quite clearly we're not," Mr Savage told The Weekend Australian.
While the market reaction to the allegations has been limited to a 5 per cent plunge in the DJs share price on the day Mr McInnes's resignation was announced, Mr Savage admits to some concern that the harassment case could damage DJs' reputation with its core female customer base. "You'd have to say anything like this is not good for the brand," he said.
"From an investor point of view there's been no real impact, but from a customer point of view we've had a number of people ask our staff in the stores about it. We've had a number of people ring us -- some are strongly in favour of the action we've taken, some of them were critical of the fact that we paid Mark any money at all, but trading has been relatively strong recently."
Mr McInnes was given a $2m severance payment by DJs -- a move that sparked outrage in some quarters, but it was well short of the payout he could have received had he not lost his bonus and other entitlements.
Mr Savage rejected the suggestion that inappropriate behaviour could be an occupational hazard when the job involved glittering parties with free-flowing champagne. "My view is people have to have personal standards of conduct and behaviour. The fact that you are at a glamorous event is no excuse for behaving in an inappropriate way," he said.
"Having said that, you can never legislate for good behaviour . . . we all know you shouldn't drink and drive, but that doesn't stop people from still doing it -- it's a question of dealing with it if it happens and doing everything in your power to remind people that it shouldn't happen."
An audit of DJs' workplace polices undertaken following Ms Fraser-Kirk's claim found that the company had sufficient measures in place to deal with harassment issues, but the scandal led to the introduction of a bullying hotline that staff could use to lodge complaints with a lawyer working outside the company.
Mr Savage said a number of staff had already used the hotline, "but none of those complaints were about Mark specifically . . . and none of the people who complained wanted any action taken as a result of that".
He said he was "bitterly disappointed," with Mr McInnes, and had considered whether he should share some of the blame.
"I can truthfully say that neither I nor anyone else saw anything that was indicative of that sort of thing happening . . . so when it happened I was pretty shocked and really disappointed."
He said DJs would pay compensation to Ms Fraser-Kirk but would resist any claim for the company to pay punitive damages on the ground that it tacitly approved of Mr McInnes's behaviour. "We totally believe she should not have been treated in that way at all, and nor should any employee or any person," he said.
"That side of the equation we'd like to move as quickly as possible to settlement.
"But the other side of it we don't accept and we're not really prepared to negotiate on that."
