Legislative Alert: Sexual Harassment Laws Have Changed Again. Are Your Controls Keeping Up?
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Are Your Controls Keeping Up?
Over the past 18 months, Australia has fundamentally changed how workplace sexual harassment is regulated, investigated and enforced.
Three developments are reshaping employer obligations:
What Happened?
1. Courts are awarding significant penalties under new Fair Work laws
In the first two major cases decided under the Fair Work Act sexual harassment provisions, courts awarded:
- $90,000 against a café owner who sexually harassed a young casual employee after she questioned her pay.
- $116,000 to a manager who was sexually harassed by a contractor and customer, after his employer failed to respond appropriately.
Importantly, the courts confirmed that sexual harassment protections apply:
- Regardless of employment status
- Regardless of who commits the behaviour
- Even where the perpetrator is a customer, contractor or third party
- In addition to existing anti-discrimination and WHS obligations
The message is clear: workplace sexual harassment is no longer viewed solely as an HR issue. It is now a workplace risk with significant legal consequences.
2. Regulators are treating sexual harassment as a WHS hazard
Following the Respect@Work reforms, employers now have a positive duty to proactively prevent:
- Sexual harassment
- Sex-based harassment
- Hostile workplace environments
- Related victimisation
In Queensland and other jurisdictions, organisations are increasingly expected to:
- Identify workplace risk factors
- Assess psychosocial hazards
- Implement preventative controls
- Review effectiveness
- Maintain evidence that prevention activities are occurring
Policies alone are no longer enough.
3. New laws are increasing accountability
Several significant changes are now taking effect:
Victoria (from 1 July 2026)
Restrictions on Non-Disclosure Agreements (NDAs) mean:
- Confidentiality can only be requested by the complainant.
- Employers cannot propose NDAs as a default settlement term.
- Complainants can revoke confidentiality after 12 months.
New South Wales (from 1 July 2026)
Approved WHS Codes of Practice become effectively mandatory.
If organisations choose not to follow a Code, they must prove their alternative approach provides an equal or higher level of protection.
What Does this mean for all leaders – boards and executives and managers?
The legal shift represents something much bigger than compliance.
It changes how leaders must think about workplace culture, risk and accountability.
The courts are focusing on vulnerability
In the café case, the court specifically considered that the worker was:
- Young
- Female
- A migrant
- Financially vulnerable
- Working for a person in authority
The judgement demonstrates that power imbalance matters. Leaders must understand that risk is not just about behaviour. It is about who holds power and how that power can be misused.
The source of harassment is no longer the key issue
The storage facility case is particularly significant. The sexual harassment came from:
- A contractor
- A customer
Not an employee. And again, the employer was still criticised for failing to act. This reinforces a critical principle: Employers are responsible for managing workplace risks regardless of where they originate.
The question regulators increasingly ask is:
“What did you know, and what did you do when you became aware of the risk?”
Culture is becoming evidence
Recent court decisions show workplace culture is increasingly being used as evidence. In Magar v Khan, the Federal Court awarded $305,000, the highest damages award under the Sex Discrimination Act to date. The court highlighted the role of a tolerated sexualised workplace culture in contributing to harm. This means culture is no longer a “soft” issue. It is becoming a measurable risk factor that influences:
- Liability
- Damages
- Regulatory scrutiny
- Governance assessments
Leaders can no longer rely on complaint systems alone
Historically many organisations adopted a reactive model:
- Wait for a complaint.
- Investigate.
- Resolve.
Regulators are increasingly rejecting this approach. With some states mandating a proactive response (Queensland) and NSW mandating the use of controls and evidence of those controls to mitigate the risk. The emerging expectation is:
- Identify risks before harm occurs.
- Implement preventative controls.
- Monitor effectiveness.
- Demonstrate ongoing governance oversight.
This mirrors the approach already applied to physical safety risks.
What do all leaders (including managers) need to do?
Five Actions for Boards
1. Request a Sexual Harassment Risk Profile
Ask:
- Where are our highest-risk work environments?
- Which groups may be more vulnerable?
- What evidence supports our assessment?
2. Review Prevention Controls
Move beyond policies.
Examine whether controls exist across:
- Leadership capability
- Supervision
- Reporting pathways
- Contractor management
- Customer conduct
- Workplace design
- Remote and isolated work
3. Seek Evidence, Not Assurances
Ask for data on:
- Complaints
- Near misses
- Anonymous reporting
- Turnover patterns
- Exit interview themes
- Psychosocial hazard assessments
Good governance requires evidence.
4. Test Organisational Response Capability
Run scenario exercises.
For example:
- A customer sexually harasses a worker.
- A senior leader is accused.
- A contractor repeatedly engages in inappropriate conduct.
Would managers know exactly what to do?
5. Treat Culture as a Risk Indicator
Include sexual harassment prevention within:
- Psychosocial risk management
- Culture reviews
- Leadership accountability frameworks
- WHS governance reporting
Five Actions for Managers
1. Identify High-Risk Situations
Look for:
- Isolated work
- Power imbalances
- Customer-facing roles
- Young or inexperienced workers
- Contractors working alongside employees
2. Act Early
Do not wait for a formal complaint.
Address:
- Inappropriate jokes
- Sexualised comments
- Exclusionary behaviours
- Boundary-testing conduct
Early intervention prevents escalation.
3. Document Concerns
Keep records of:
- Reports received
- Actions taken
- Follow-up discussions
- Risk assessments
Documentation demonstrates due diligence.
4. Support Reporting
Employees should know:
- How to raise concerns
- Who they can approach
- What will happen next
- What support is available
5. Review Controls Regularly
Ask:
- Is this control still working?
- What feedback have workers provided?
- What incidents or near misses have occurred?
Risk management is continuous, not annual.
The question for leaders is not: "What will we do if a complaint occurs?" The question is: "What evidence do we have that we are preventing harm before it occurs?"
The People Plus Science Perspective
The most important lesson from these decisions is that sexual harassment has shifted from being viewed as an interpersonal conduct issue to being recognised as a workplace risk that must be actively managed. Organisations that focus only on policies and investigations are increasingly exposed. Regulators, courts and workers now expect organisations to demonstrate:
- Prevention
- Risk assessment
- Effective controls
- Leadership accountability
- Continuous improvement
The question for leaders is no longer: “What will we do if a complaint occurs?” The question is: “What evidence do we have that we are preventing harm before it occurs?”
References
- Respect@Work Reforms
- Mejia v Capital City Cafe-Bar
- Eklom v Marshall
- Magar v Khan
- Fair Work Commission
- Safe Work Australia
- Australian Human Rights Commission
- Fair Work Act 2009
- Sex Discrimination Act 1984
- Restricting Non-Disclosure Agreements (Sexual Harassment at Work) Act 2025
Further Reading
“Neuroscience is the foundation for the approach we bring to every engagement. Partnering with our leaders to provide the insights that allow for improved decision making resulting in organisational resilience. Carolyn Grant
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