This employer certainly didn’t – and it cost him $$$

One Minute Summary

• The Court awarded the former employee $305,000 for direct sexual harassment, for harassment on the grounds of sex and for victimisation.
• A person, who is the subject of sexual harassment, is not under the onus of informing the perpetrator that their conduct is unwelcome at the time it occurs.
• The Court uses the test as to whether a reasonable person would have considered the behaviours as offensive or humiliating.
• The Court does not use a reasonable person test to determine what compensation should be awarded. Rather, as in this case, it looks at the impact on the specific person affected.
• Senior management need to make it clear to staff at all levels what constitutes sexual harassment and also what is an offence called ‘harassment on the grounds of sex’ which is much wider.  
• Employees, unless clearly informed otherwise by their employer well in advance, do not complain at an early stage when such behaviours are experienced by them in the workplace. By the time they do complain the behaviours they have been subjected may well have led them to be psychologically damaged resulting in substantial damages payments against the employer.
• Employers have a positive duty to prevent sexual harassment. Where they have actively undertaken steps to educate employees the chances of sexual harassment have been substantially reduced or eliminated.

A former employee of a fast-food franchise has been award a total of $305,000 compensation based on the following components:

• General damages for sexual harassment - $160,000
• General damages for victimisation - $10,000
• Aggravated damages for the way in which the respondent conducted their case - $5,000
• Compensation for past lost wages - $90,000
• Compensation for future lost earnings - $40,000

In addition to the above, the employer (a small business) will have costs awarded against them which will be substantial given the employee was represented in the proceedings by Counsel. (Plus paying their own legal fees.)

The employee commenced proceedings in the Australian Human Rights Commission against her former employer on the following three grounds under the Sex Discrimination Act 1984:

1. Direct sexual harassment.
2. Prohibition against harassment on grounds of sex; and
3. Victimisation after she initiated the complaint.

The employee, Ms Magar (21), had been sexually harassed by the franchisee Manager (62) and a senior employee over a period of 18 months (Sept 2021 to Feb 2023) with the more severe harassment occurring in a 6-week period towards the end of this timeframe.  After complaining about the harassment to the franchisor she received correspondence from the Manager’s solicitor threatening defamation actions unless she withdrew her complaint and apologised.

After the matter was not resolved by the Australian Human Rights Commission, Ms Magar applied to the Federal Court.   

During the Court proceedings the employer denied all wrongdoing or improper conduct in relation to Ms Magar.

In his (64 page) Judgement, handed down on 1 August, Justice Bromwich found that during the 18-month period the manager and a senior employee had engaged in ‘sexualised and sexually explicit language and descriptions in relation to female employees and customers’.  The Judgement also cited a number of other open sexualised discussions, including some very intrusive questions towards Ms Magar. The manager had shown Ms Magar pornographic videos and sex toys, had talked about his sex life and asked Ms Magar about her sexual preferences.  

A key element in supporting a conclusion that sexual harassment had occurred under the Act was that the conduct was unwelcome by the person against whom it was directed. The Court stated: ‘a person experiencing harassment does not have to positively reject the sexual conduct or expressly inform the person that the conduct is unwelcome before the conduct can be characterised as unwelcome’.

(A person giving evidence in such proceedings, stating that the conduct was unwelcome, is sufficient. This point is very important because a common defence advanced by respondents in such proceedings is (words to the effect of) “she didn’t complain or tell me to stop’. Employers need to focus on preventing the sexually harassing behaviours from occurring in the first place. There is no onus on the person subject to the behaviours to tell the harasser to stop at the time.)

Another important legal element of sexual harassment examined in this case is that a reasonable person would have anticipated the possibility that the person harassed would be offended, humiliated or intimidated by the conduct.

(Again, respondents often reply with “I didn’t know that my behaviour was sexual harassment” or “‘I did not intend to harass”. The accused’s intention doesn’t count – facts do. Did it happen or not.)

Harassment on the Grounds of Sex (S28AA of the Sex Discrimination Act)

This is a fairly new section of the Act and casts a much wider net than direct sexual harassment of a person. This relates to harassing conduct in the workplace based on sex, but not necessarily sexual in nature. In its decision the Court stated: ‘Although the conduct does not have to be directly addressed to the person harassed, some nexus is still required, in that the conduct must be in relation to the person harassed.  

In this case male employees (including the Manager) made derogatory and offensive comments in the workplace (with Ms Magar working alongside them) about personal aspects of female customers they had served or female employees who were not present.

(Harassing conduct based on sex, in a workplace area, while not directed at a person, may legally be regarded as ‘in relation to the person’. Again, this type of harassing conduct based on sex needs to be unwelcome and be offensive, humiliating or intimidating by a reasonable person – as explained above.

A common response in these situations is that it was just workplace banter. Even where only males are present (or the reverse with women) a male in that group can still by impacted by such derogatory comments.  

Allowing such behaviour to occur in the workplace is just one step away from more serious direct sexual harassment of another employee.)

Ms Maga’s Response to Sexual Harassment

The respondent’s legal team attempted to discredit Ms Magar by stating she did not complain or react to the Manager’s sexual harassment behaviours described above.

In her testimony Ms Magar stated she was very uncomfortable and looked away. In her testimony she stated: ‘I was frozen in that seat.  I wanted to run away, like, a lot. But my body was not volunteering to my thoughts or any of the things. A lot of thoughts were running. I could say nothing more than no to the answer and just sit there.’

She stated to the manager that she was very uncomfortable with what he was doing and to not do it again, but he repeated similar behaviour a week or two later.

The Judge accepted her account that: ‘she was essentially in a state of shock in this period, where she was unable to fully process what had occurred’ and ‘she experienced a sexist and to that extent sexualised workplace, which she tried to ignore because she perceived speaking up as being contrary to her interests.’

After pushing herself to attend work for several more days (stating she needed the income) she could not come to work on the 4^th shift after the above events and did not return to work thereafter at all.

In accepting her account of events the Judge stated: ‘I found Ms Magar’s evidence to be not just truthful and reliable, but also evocative and compelling.’

Compensation

In determining the amount of compensation, the Judge closely examined the impact of the sexual harassment on Ms Magar. I won’t repeat the judgement’s extensive comments about that here but include the following short excerpts as being representative: Ms Magar ‘suffered from illness as a direct result of Mr Khan’s behaviour towards her’ and ‘His unlawful actions in sexually harassing her have drastically decreased her quality of life’

(This clearly shows that sexual harassment in the workplace can have a substantial psychological impact on a person. It can be quite difficult to assume to understand how they felt. The law does not look at how a reasonable person would react but the actual impact.

Consider also the impact on a person with pre-existing mental health issues. The respondent will be responsible for any compounding mental impact.)

The Judge was also highly critical of the manner in which the respondent ran their case before the Court awarding an additional $5000 damages for some highly offensives lines of questioning. Magar v Khan (2025) FCA874.

Please contact Hunter Employee Relations for a complimentary copy of the Employer Guide to Bullying, Harassment and Discrimination.

Please contact Michael if you need assistance with employee briefings in relation to sexual harassment and/or bullying OR developing policies and procedures.

 Kind Regards
Michael Schmidt
M 0438 129 728
[email protected]
www.hunteremployeerelations.com.au

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