Sexual harassment laws are evolving rapidly in Australia with significant legislative reforms and emerging case law reshaping employer obligations.

There is now an increased focus on proactive risk management and accountability across multiple jurisdictions. This article outlines the key changes and practical implications for employers in 2026.

Restricted use of Non-Disclosure Agreements (NDAs)

From 1 July 2026, Victoria will become the first jurisdiction in Australia to introduce restrictions on the use of confidentiality clauses and non-disclosure agreements (NDAs) in the context of workplace sexual harassment.

The legislation is intended to address concerns that confidentiality clauses have historically been used to silence complainants or are often proposed as a “standard term” of settlement arrangements. The legislation is designed to rebalance the use of NDAs so that confidentiality is driven by the informed choice of the complainant, rather than employer preference or standard practice.

Under the Restricting Non-Disclosure Agreements (Sexual Harassment at Work) Act 2025 (Vic):

• Confidentiality provisions relating to sexual harassment will be enforceable only if the complainant requests confidentiality;
• Employers will be prohibited from proposing confidentiality as a default settlement term or influencing or pressuring a complainant to sign such terms;
• Confidentiality clauses cannot prevent disclosures to regulators, police, legal advisers, health practitioners or close personal supports;
• If a complainant requests an NDA, they must be given a mandatory information statement and a 21-day review period. During the review period, the complainant can obtain legal advice if they wish prior to entering into the NDA;
• Each party must acknowledge through an approved form that the preconditions have been met. If the preconditions are not met, the NDA will not be enforceable against a complainant; and
• Complainants will have the right to terminate confidentiality agreements after 12 months.

These reforms impose a materially different framework for the negotiation and enforceability of confidentiality in sexual harassment matters. In particular, the shift away from NDAs will require careful handling of complaints, settlement discussions and risk management strategies.

While Victoria is the first Australian jurisdiction to introduce such measures, the reforms align with broader national and international scrutiny of confidentiality clauses in this context. It is likely that similar legislative developments will emerge in other states and territories.

Employers operating across jurisdictions should therefore monitor developments closely and consider adopting a nationally consistent approach.

Work Health and Safety – Codes of Practice

From 1 July 2026, significant changes will take effect in New South Wales which will require mandatory compliance by employers with approved Work Health and Safety (WHS) Codes of Practice.

Historically, Codes of Practice have operated as practical guidance material, assisting duty holders to understand how to meet their obligations under the Work Health and Safety Act 2011 (NSW) (WHS Act).

However from 1 July 2026, employers must comply with an approved Code of Practice, or, where they have not complied, be able to demonstrate that they have implemented a standard of care that is equivalent to, or higher than, the requirements set out in the Code.

These amendments have important implications for employers. In particular:

• A failure to follow an applicable Code will require a PCBU to demonstrate that its alternative control measures meet or exceed the standards prescribed by the Code;
• This is a higher evidentiary burden in the event of a SafeWork NSW investigation or prosecution; and
• The changes increase the risk of enforcement action where there are gaps between an employer’s practices and the requirements set out in the Code.

In light of these changes, employers should take proactive steps to ensure alignment with applicable Codes of Practice prior to 1 July 2026, including:

• Identifying which Codes are relevant to their operations;
• Reviewing and updating WHS policies, procedures and risk controls to ensure consistency with those Codes;
• Ensuring that any departure from a Code is deliberate, documented and supported by evidence demonstrating an equivalent or higher standard of safety;
• Providing training to officers, managers and workers on the practical application of relevant Codes; and
• Maintaining clear records of risk assessments, control measures and review processes.

These developments sit alongside the positive duty under the Sex Discrimination Act 1984 (Cth), which requires employers to take reasonable and proportionate measures to eliminate sexual harassment and related conduct, shifting the focus to active prevention, rather than response.

Mandatory Work Health and Safety risk management framework

From 1 March 2025, employers, particularly in Queensland, have been required to prepare and implement written prevention plans to address identified risks of sexual harassment and sex-based harassment as workplace hazards.

Regulators increasingly expect employers to adopt a risk-based approach consistent with broader WHS principles. Reliance on standalone policies and procedures will not be sufficient to discharge WHS duties. Regulators now expect employers to:

• Identify workplace risk factors;
• Implement targeted controls;
• Regularly review effectiveness; and
• Maintain evidence of active risk management.

These developments reinforce that sexual harassment is no longer treated solely as a conduct or human resources issue, but as a work health and safety risk. Employers should take this opportunity to review their current frameworks and ensure that sexual harassment prevention plans comply with applicable work health and safety laws.

First concluded sexual harassment case under the Fair Work Act amendments

On 26 March 2026, the Federal Circuit and Family Court of Australia ordered a café owner to pay $90,000 in damages and penalties after kissing a 23-year-old employee without consent.¹

The case is the first concluded sexual harassment proceeding determined under the 2023 amendments to the Fair Work Act 2009 (Cth) (FW Act), specifically, section 527D which expressly prohibits sexual harassment in connection with work.

This decision highlights the practical operation of the amended Fair Work Act provisions and signals an increased willingness by courts to impose penalties for workplace sexual harassment under these provisions.

New damages benchmark

In Magar v Khan [2025] FCA 874, the Federal Court awarded $305,000 in damages following findings of sexual harassment, victimisation and a sexually hostile work environment in breach of the Sex Discrimination Act 1984 (Cth) (SD Act). While the Court ultimately rejected the sex-based harassment claim on technical grounds, the judgment emphasised the influence of a “tolerated sexualised culture” in escalating both risk and harm.

The total amount awarded is the largest order for damages for a claim under the SD Act to date.

This decision reinforces that damages in sexual harassment matters continue to trend upward and that evidence of workplace culture is increasingly central to both liability and quantum. Employers should ensure that cultural risks are actively identified and addressed as part of their broader legal and compliance frameworks.

This article was written by Emma Campbell, Special Counsel, and reviewed by Peta Tumpey, Partner.

¹ Mejia v Capital City Cafe-Bar [2026] FedCFamC2G 468.