21/04/2026
A recent case in the Federal Circuit and Family Court has provided the first decision under the new penalty provisions for sexual harassment under the Fair Work Act 2009 (Cth) (Fair Work Act).
Amendments to the Fair Work Act that commenced on 6 March 2023 introduced a civil penalty for sexual harassment in the workplace under the new section 527D, implementing a Respect@Work recommendation. With a maximum potential penalty of $19,800 (60 penalty units).
Facts
The case of Mejia v Capital City Café-Bar [2026] FedCFamC2G 468 involved a café owner and his young 23-year-old female employee, who was an immigrant from Colombia.
The employee raised concerns about an underpayment with the café owner. In response, the owner sent the chef to put the bins out, and once alone with the employee hugged her from behind, waved a wallet full of cash and said words to the effect of “take the money”. After initially refusing the offer, as she feared for her safety the employee took a $50 note and forced the owner away. The owner then kissed her on the lips, without her consent.
Over the following days the employer frequently messaged the worker, apologising and pleading with her not to tell his wife, and to return to work.
Court decision and penalties
The Court ordered payment of significant penalties of almost $90,000 flowing from the contravention and other identified breaches of the Fair Work Act.
In considering the penalty for the section 527D breach, the Court considered the subjective factors that the worker was vulnerable, given she was relatively young, female, a migrant, and had limited financial resources. The Court also considered that the apologies provided by the café owner had not expressed genuine remorse, but instead he had acted out of fear of consequences and to keep the incident undisclosed.
The Court ordered a penalty of $9,390 for the breach of section 527D of the Fair Work Act and a further $50,000 for damages.
The Court also made findings with respect to broader breaches, including underpayment and record-keeping breaches and settled on a penalty of $30,160 for these breaches.
Employers must take real protective steps to ensure that sexual harassment does not take place in the workplace. The new provisions relating to sexual harassment under the Fair Work Act create further potential remedies for employees to take action if they experience sexual harassment in the workplace, in addition to those that already existed under work health and safety or discrimination legislation.
If you have any questions about what steps you should be taking as an employer to prevent sexual harassment in your workplace, contact our team of employment law experts.