Record Payout in Sexual Harassment Case
Posted on September 11, 2025
Record Payout in Sexual Harassment case – 305,000 reasons to know your obligations as an employer
The recent Federal Court decision of Magar v Khan [2025] FCA 874 saw a record order of $305,000 being awarded to an employee who was subjected to sexual harassment in the course of her employment.
Ms Magar was an employee of Mexicali Enterprises Pty Ltd, a company owned and controlled by Mr Khan, which also employed him. Mexicali was a franchisee of Mad Mex Franchising Pty Ltd.
After ceasing work at the fast food restaurant, Ms Magar made a complaint to Mad Mex Human Resources about Mr Khan’s conduct and made allegations she had been sexually harassed by Mr Khan. Mad Mex undertook an investigation and substantiated some of the allegations.
Ms Magar’s legal representative wrote first to Mexicali and later Mr Khan seeking employment information and a copy of Ms Magar’s contract. That correspondence stated Mr Khan had subjected Ms Magar to sexual harassment, harassment on the basis of sex, and discrimination on the basis of sex. In response, Mr Khan’s legal representative sent notices to Ms Magar threatening legal action and sought an apology and monetary compensation from Ms Magar (the Concerns Notices).
Ms Magar lodged a complaint in the Australian Human Rights Commission asserting various breaches of the Sex Discrimination Act 1984 (Cth) (SD Act) and subsequently filed an application in the Federal Court.
The incidents
The incidents forming the basis of Ms Magar’s complaint and the proceedings were:
- Mr Khan asking Ms Magar sexualised and demeaning questions about how she got a bruise-like mark on her neck (described as the ‘Hickey Incident’);
- Mr Khan regularly, over a five week period, asking Ms Magar intrusive questions and making comments of a sexual nature (Sexual Comments);
- Mr Khan on five consecutive Sundays sexually harassing Ms Magar when she was in or near his car (Car Incidents) including;
- asking if she watched pornography and showing her pornography;
- asking questions about her sexual interests including which of her co-workers (which he named and included minors) she would sleep with;
- discussing his sexual acts including with former employees;
- showing Ms Magar sex toys and touching her with one on the inner thigh;
- asking Ms Magar to attend a massage parlour and a hotel with him;
- Mr Khan and other male employees using sexualised and sexually explicit language and descriptions in relation to female employees and customers (described as the Group Behaviour);
- Mr Khan and another store manager behaving in a way that was disrespectful to Ms Magar and the position she occupied in addition to being derogatory in relation to other women, including about how Ms Magar and other women should dress (Managers’ Behaviour).
The Federal Court decision
The Court found that:
- The Hickey Incident and at least four of the five Car Incidents constituted sexual harassment of Ms Magar on the ground of sex within the meaning of section 28A of the SD Act;
- The Group Behaviour and the Managers’ Behaviour did not constitute harassment of Ms Magar on the ground of sex but only because the conduct did not occur in relation to Ms Magar;
- There was no evidence to support the Sexual Comments allegation; and
- In sending the Concerns Notices Mr Khan committed acts of victimisation against Ms Magar and contravened section 47A(1) of the SD Act.
Ms Magar substantially succeeded in her claims. It was found that she was sexually harassed by Mr Khan and victimised for complaining about his unlawful conduct. His conduct caused her to suffer loss and damage.
Ms Magar was awarded $175,000 in damages and $130,000 in past and future economic loss.
Takeaways
This decision provides a timely reminder to organisations of the positive duty to take reasonable and proportionate measures to eliminate, as far as possible:
- discrimination on the ground of sex;
- sexual harassment and sex-based harassment in connection with work;
- conduct creating a workplace environment that is hostile on the ground of sex; and
- related acts of victimisation.
Please contact our workplace relations team if you require assistance with preparing policies, providing training, undertaking investigations or responding to complaints.
