Australia: Upward Trend in Significant Damages Awarded in Sexual Harassment Decisions Continues

Authors: Sarah Younis and Ben Carl

Recently, the Federal Court of Australia awarded one of the highest general damages payouts in a sexual harassment claim, demonstrating the need for organisations to take positive and proactive steps to eliminate sexual harassment in their workplace.

In light of the recent upward trend in substantial compensation awards being ordered in sexual harassment matters, the decision highlights the importance of employers mitigating the risk of being held vicariously liable for the inappropriate conduct of their workers.

 

Facts

On 1 August 2025, the Federal Court handed down its decision in Magar v Khan [2025] FCA 874, awarding $305,000 in total to a young female employee, Ms Magar, who experienced persistent sexual harassment and victimisation in the workplace in an 18-month period.

Ms Magar, aged 21 at the time, worked at a Mad Mex franchise—owned and directed by Mr Khan (her superior) —between September 2021 and February 2023. During Ms Magar’s employment, she was subjected to sexual harassment by Mr Khan, which included:

• being asked sexualised and demeaning questions about her bruise-like mark on her neck (being a hickey);
• being asked who she would have sex with at work (including with underaged staff);
• being shown pornography on a computer tablet;
• Mr Khan using sex toys to touch Ms Magar’s body without her consent: and
• Mr Khan making lewd sexualised jokes and comments to her in relation to female employees and customers.

Following Ms Magar’s complaints of sexual harassment, she was subsequently threatened with defamation action by Mr Khan.

 

Decision

Justice Bromwich of the Federal Court found that Ms Magar was subjected to repeated sexualised comments and jokes, which contributed to a toxic workplace culture. Justice Bromwich described the environment as “overt and outspoken sexist and boorish.”

In examining a number of previous cases that dealt with the assessment for general damages (including Hill v Hughes [2019] FCCA 1267 (in which $120,000 was awarded for general damages) and Taylor v August Pemberton Pty Ltd [2023] FCA 1313 (in which $140,000 was awarded for general damages)), the Court stressed that comparisons between sexual harassment cases are not straightforward and the Court does not assess general damages by performing “arithmetic adjustments to prior determinations.”

In determining that prior awards for general damages are to be considered “yardsticks to assist in arriving at an appropriate measure of damages,” Bromwich J accepted that:

• Ms Magar had suffered a substantial loss of enjoyment of life for more than two and a half years; and
• Mr Khan’s unlawful actions in sexually harassing her had drastically decreased her quality of life.

In these circumstances, Justice Bromwich decided that the appropriate award of general damages in favour of Ms Magar was $160,000. Ms Magar was also ordered to receive compensation for economic loss ($130,000) victimisation ($10,000) and aggravated damages ($5,000) due to the way in which Mr Khan conducted his case, which the Court determined was “improper, unjustifiable or lacking bona fides.”

Key takeaways for employers

The decision underscores the growing importance courts place on workplace culture and employer responsibility in preventing and addressing sexual harassment, especially where power imbalances exist in the workplace.

The case further demonstrates the Court’s increasing tendency to award higher amounts for general damages for sexual harassment matters in order to reflect prevailing community standards. Additionally, the decision emphasises the need for employers to act proactively to meet their legal obligations to eliminate sexual harassment in the workplace, including by:

• reviewing and updating their sexual harassment and workplace behaviour policies;
• providing regular training on appropriate workplace conduct, both during the onboarding process and throughout the employment period;
• ensuring complaints are actioned promptly, handled fairly and without retaliation; and
• auditing workplace culture and leadership practices to address systemic risks arising from psychosocial risks, including risks associated with sexual harassment.

Harmers Workplace Lawyers can provide advice in relation to reviewing and updating appropriate workplace behaviour policies, provide training to staff and senior management on workplace behaviour and provide advice on sexual harassment matters more generally. If you require legal advice or assistance, please contact our legal team at + 61 2 9267 4322.