Last month, the Federal Circuit and Family Court of Australia published the first decision under section 527D of the Fair Work Act 2009 (Cth) (“FW Act”), which prohibits sexual harassment “in connection with work”.
Section 527D was added to the FW Act three years ago in response to the Respect@Work recommendations. It provides a new pathway for workers to apply to the Fair Work Commission (“FWC”) to deal with a sexual harassment dispute. If the FWC is unable to resolve the dispute, it can issue a certificate confirming same and enabling the worker to pursue the matter in court.
Mejia v Capital City Cafe-Bar: Key facts and outcome
In Mejia v Capital City Cafe‑Bar [2026] FedCFamC2G 468, the applicant worked in the respondent’s business as a waitress. The respondent’s sole director admitted to engaging in unwelcome sexual behaviour towards the applicant, including hugging the applicant from behind and kissing her on the lips without her consent. This conduct occurred on one occasion on the same day the applicant had raised concerns about being underpaid.
The Court ultimately ordered the respondent’s sole director to pay $90,000 in compensation and penalties. This comprised of:
$50,000 non-economic loss (ie. hurt, distress and humiliation) suffered by the applicant because of the sexual harassment;
$9,390 as a pecuniary penalty for sexual harassment; and
$30,610 for various underpayment and record-keeping contraventions.
In assessing compensation and penalties, the Court had regard to the following factors:
The applicant was a vulnerable person – specifically, she was relatively young, female, a migrant and of limited financial resources and social supports.
The sole director was the applicant’s manager and in a position of authority which he sought to leverage by holding out a financial gain to the applicant.
The incident was isolated and there was “no evidence that there was any prior inappropriate behaviour, targeting or a permissible culture”.
The sole director repeatedly expressed remorse to the applicant. However, the Court found this was motivated by him “wanting the incident to be undisclosed, avoidance of consequences, not wanting his wife to find out and the inconvenience of suddenly being short staffed”.
Importantly, the Court emphasised that “prior awards of damages are not precedents”, there is no “science” to the assessment of general damages, and each case must be assessed on its own facts.
Prior to the commencement of section 527D, sexual harassment complaints and disputes were primarily dealt with via anti-discrimination legislation. In the FWC, such complaints could only be raised indirectly through general protections, unfair dismissal or anti-bullying claims.
Given how inexpensive and expedient FWC processes can be, the new provisions within the FW Act will likely provide some appeal for workers who feel that the conduct of a colleague has crossed the line.
Key takeaways for employers
The decision in the Mejia case indicates how courts may approach sexual harassment disputes under this relatively new avenue.
Courts are unlikely to be persuaded by the fact that no “permissible culture” of sexual harassment existed prior to the complaint under examination; even a one-off incident can attract significant compensation and civil penalties.
Please contact Cassie Burfoot, Director or Jemma Andretzke, Lawyer if you have any questions about your organisation’s policies and procedures to address the Respect@Work recommendations and changes to the law.
This publication has been prepared for general guidance on matters of interest only and does not constitute professional legal advice. You should not act upon the information contained in this publication without obtaining specific professional legal advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this publication and to the extent permitted by law, Cowell Clarke does not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting or refraining to act in relation on the information contained in this publication or for any decision based on it.