Federal Court’s First Ruling on Sex-Based Harassment Provides Crucial Legal Clarity

In a landmark decision that provides the first judicial interpretation of a key legal reform, the Federal Court has ruled on the prohibition against harassing conduct based on sex. This new provision was a central element of the 2021 amendments to the Sex Discrimination Act 1984 (Cth), which were introduced to address gaps in the law by targeting demeaning conduct that is not necessarily sexual in nature.

The case, Magar v Khan (2025), concerned a female employee at a fast-food store who brought a claim against her employer. The court found that two senior men in the workplace had fostered a culture that was tolerant and even encouraging of sexist behaviour. This conduct, which the court described as demeaning and unprofessional, contributed to an environment where sexualised behaviour towards women could become normalised. The judgment highlighted the serious risk that such a culture could lead to an escalation of more direct forms of harassment.

However, the court’s application of the new provision was nuanced. It determined that while this pervasive culture was highly problematic, it did not meet the specific legal test for harassment “in relation to the complainant.” This finding was a key part of the court’s reasoning, as it clarified that for a breach of this specific prohibition to occur, the demeaning conduct must have some direct connection to the person bringing the complaint. The court considered evidence of comments made to the employee about her attire and body when she wore skinny jeans, but ultimately found the evidence was not clear or extensive enough to establish a contravention of this new law.

Despite this finding, the employee was successful on other grounds. The court found that her manager had engaged in unlawful sexual harassment by directing a sequence of highly sexualised and unwelcome comments at her. This finding underscores the continued importance of the existing sexual harassment provisions. Furthermore, the court found the manager had committed an act of victimisation when he threatened the employee with defamation proceedings if she pursued her complaint.

The case concludes with a substantial financial outcome, serving as a clear message to employers about their legal obligations. The court awarded the employee a total of $305,000 in damages, which included:

• $160,000 in general damages for the sexual harassment she endured.

• $10,000 in general damages for the victimisation.

• $5,000 in aggravated damages, which arose from the way the employer handled the litigation.

• $130,000 for past and future economic loss, acknowledging the financial impact the harassment had on her career.

  
  

The ruling provides a critical legal framework for navigating the new sex-based harassment prohibition while also reinforcing the significant penalties for failing to prevent sexual harassment and victimisation in the workplace. It signals to employers that having a respectful workplace culture is a legal necessity, not merely a small business or company aspiration.