Australia's First Fair Work Sexual Harassment Payout (2026)

For the first time, an Australian court has ordered an employer to pay compensation and a penalty under the Fair Work Act's standalone sexual harassment prohibition. The decision in Mejia v Capital City Cafe-Bar [2026] FedCFamC2G 468 confirms that workers can pursue real money for workplace sexual harassment, not just an order telling the behaviour to stop. This is the headline test case for the post-Respect@Work regime, and it sets the benchmark every future claim will be measured against.

The Federal Circuit and Family Court (Division 2), through Justice Gavin Mansfield, ordered the cafe's sole director to pay a total of about $90,000 on 26 March 2026. According to Page Seager and Griffin Legal, the split was $50,000 in compensation for the worker's hurt, distress and humiliation; a $9,390 pecuniary penalty for breaching section 527D of the Fair Work Act 2009; and roughly $30,610 for other Fair Work Act contraventions, namely wage underpayment and record-keeping failures. The actual wages owed were $6,079.08, with the balance of that figure being penalties. The orders were payable within 60 days.

Source: Page Seager and Griffin Legal case notes on the decision.

It is the first decision, and the first award of civil penalties, under section 527D of the Fair Work Act. Section 527D is the standalone prohibition on sexual harassment in connection with work. It commenced on 6 March 2023 as part of the Respect@Work reforms delivered through the Secure Jobs, Better Pay Act 2022, but until Mejia no court had applied its compensation and penalty powers. Griffin Legal confirms this was the first time penalties had been issued under the new provisions. That makes it the precedent lawyers, the Fair Work Commission and future applicants will now point to.

The worker was a young migrant employee. According to the OHS Reps account of the case, on 29 July 2024 she raised a concern about a missing pay slip with the manager, who was also the business's sole director. He responded by wrapping his arms around her from behind, pressing her into the sink and kissing her on the lips without consent. He initially denied the conduct and later made full admissions. Region Canberra reported the outcome as a landmark win for a migrant worker, with the manager ordered to pay $90,000.

Yes, you can claim compensation. This is the most important practical takeaway from Mejia. Many workers assume the Fair Work system only offers a "stop sexual harassment order", which is forward-looking and tells the conduct to stop but pays nothing. Since the Respect@Work reforms, the Fair Work Act also lets a worker pursue compensation and penalties for harassment that has already happened. The Fair Work Commission can deal with a sexual harassment dispute, and if it is not resolved it can be taken to court, which is where Mejia landed. The court can order the harasser, and in many cases the employer, to pay general damages for hurt and humiliation, plus penalties. We cover the Commission pathway and stop orders in detail in our guide to sexual harassment and the Fair Work Commission.

Both can be on the hook. In Mejia the orders fell on the individual manager because he was also the sole director and the harasser. Section 527D applies to the person who engages in the conduct, and businesses can also be liable, including under the vicarious liability and positive-duty framework introduced by Respect@Work. Employers now carry a legal duty to take reasonable and proactive steps to eliminate sexual harassment, which we explain in our piece on the employer positive duty. Failing that duty exposes the business itself, not just the offending individual.

Treat it as a warning shot. The case shows three things employers cannot ignore. First, sexual harassment now carries direct financial liability through compensation and penalties, on top of any reputational damage. Second, the court added underpayment and record-keeping penalties on the same facts, so poor wage compliance compounds the exposure when a dispute escalates. Third, small businesses are not immune. This was a single cafe with a sole director, and the bill was about $90,000. With the positive duty in force and the upcoming ban on non-disclosure agreements in sexual harassment matters, the cost of doing nothing is climbing.

Act early and keep records. Write down what happened, including dates, times, locations and witnesses, as soon as you can. Keep any messages, rosters and pay slips. You can raise a sexual harassment dispute with the Fair Work Commission, which can attempt to resolve it and, where appropriate, make a stop order or refer the matter on so compensation can be pursued in court. Strict time limits apply, so get advice quickly. The Fair Work Ombudsman and the Australian Human Rights Commission also handle workplace sexual harassment, and you may have options under both the Fair Work Act and the Sex Discrimination Act. If money has also been short-changed, as it was in Mejia, raise the underpayment at the same time, because the court treated both as connected breaches.

This article is general information, not legal advice. For advice on your situation, contact the Fair Work Ombudsman, the Australian Human Rights Commission, or a qualified employment lawyer.

How much compensation can you get for sexual harassment at work in Australia?

There is no fixed cap on general damages for hurt and humiliation. In the first s527D case, Mejia v Capital City Cafe-Bar (March 2026), the court ordered $50,000 in compensation plus a $9,390 penalty, with about $30,610 more for related underpayment and record-keeping breaches, totalling roughly $90,000. Amounts depend on the severity and impact of the conduct.

What is section 527D of the Fair Work Act?

Section 527D is the standalone prohibition on sexual harassment in connection with work. It commenced on 6 March 2023 as part of the Respect@Work reforms under the Secure Jobs, Better Pay Act 2022. It allows the Fair Work Commission to deal with sexual harassment disputes and, through the courts, allows compensation and penalties to be ordered.

Can I claim money for sexual harassment, or only a stop order?

You can claim money. A stop sexual harassment order from the Fair Work Commission only addresses ongoing conduct and pays nothing. Since the Respect@Work reforms, you can also pursue compensation for hurt and humiliation and seek penalties against the harasser and, in some cases, the employer. The Mejia case confirmed a court can award both.

Can an individual manager be personally ordered to pay?

Yes. In Mejia v Capital City Cafe-Bar the orders fell on the manager, who was also the sole director, because he engaged in the conduct. Section 527D applies to the person who commits the harassment, and businesses can also be liable, particularly given the employer positive duty introduced by the Respect@Work reforms.

What is the time limit to lodge a sexual harassment claim?

Strict time limits apply and they differ depending on the pathway you use, so you should get advice quickly. You can raise a sexual harassment dispute with the Fair Work Commission, and matters may also be pursued through the Australian Human Rights Commission under the Sex Discrimination Act. Acting early protects your options.