Warning – This article contains explicit content that some readers may find confronting.

The Federal Court of Australia recently awarded the largest order for damages for a claim under the Sex Discrimination Act 1984 (Cth) (SD Act) to date. The decision in Magar v Khan [2025] FCA 874 (Magar Decision) was one of the first to consider key changes made to the SD Act, including introduction of the definition of sex-based harassment. The decision serves as a timely reminder to employers of the need to discharge the positive duty to prevent sexual harassment in the workplace or risk large compensation awards against employers and personally against individual officers and managers.

This article reviews the positive duty in the context of the Magar Decision and outlines the implications and practical measures to be taken to ensure the positive duty is met.

The Positive Duty

The 2022 amendments to the SD Act included the imposition of a positive duty on employers. This duty requires employers and persons conducting a business or undertaking (PCBU) to take reasonable and appropriate measures to eliminate as far as possible:

• discrimination on the ground of a person’s sex;
• sexual harassment, or harassment on the ground of sex;
• conduct that creates a hostile work environment; and
• acts of victimisation.

This substantial change requires that employers proactively protect their employees from experiencing sexual harassment and other unlawful, gender-based conduct, not just from their colleagues but also from clients, customers, and contractors of the PCBU.

Other 2022 amendments to the SD Act included the addition of the definition of sex-based harassment, that prohibits acts of verbal, nonverbal, or physical aggression, intimidation or hostility based on sex or sex-stereotyping, sexual orientation or gender identity and that reinforce heteronormative gender roles, not generally motivated by sexual interest or intent.

Summary of the Magar Decision

Ms Magar, who was 21 years of age when she commenced employment with Mexicali Enterprises Pty Ltd (trading as a Mad Mex franchise), alleged sexual harassment across the two-year period she was employed, by the franchise owner, and sole director, Mr Khan.

Ms Magar alleged that the harassment included:

• Mr Khan asking Ms Magar specifically about a bruise on Ms Magar’s neck;
• Mr Khan making sexual comments towards Ms Magar in the presence of other employees; and
• Mr Khan sexually harassing Ms Magar in his car.

Ms Magar alleged that several incidents occurred in Mr Khan’s car, when he directed her to attend errands with him. These incidents included allegations of Mr Khan:

• asking Ms Magar if she watched certain categories of pornography;
• suggesting Ms Magar experiment sexually;
• showing Ms Magar pornographic material;
• asking Ms Magar intrusive, sexualised questions; and
• showing Ms Magar a bag of sexual devices.

By the time the matter went to trial, the employer PCBU was in liquidation. As a result, the proceedings continued against Mr Kahn as an officer of the employer PCBU.

Key Findings

Sexual Harassment

The Court was satisfied that the conduct that occurred in Mr Khan’s car amounted to sexual harassment. The Court found it was clear that Mr Khan’s comments were of a sexual nature and not welcomed by Ms Magar. Further, the Court held that a reasonable person would have anticipated with certainty, that Ms Magar would have been offended, humiliated or intimidated. This was also compounded by the fact that Ms Magar was well known to Mr Khan, she was a young migrant with no family in Australia, she experienced mental health challenges and the power imbalance between the parties.

Victimisation

Following Ms Magar’s first complaint to the People and Culture Manager at Mad Mex, and a second complaint to the HR Manager at Mad Mex, Mr Khan issued two concerns notices to Ms Magar in response to her deciding to pursue her complaints. The Court found this to be unlawful victimisation against Ms Magar.

Sex-Based Harassment

The Court considered the distinction between sexual harassment and sex-based harassment and held that, while the workplace was highly sexist, there was insufficient evidence that the behaviour that could constitute sex-based harassment was directed toward Ms Magar or was due to her sex.

Damages

The Court was satisfied that Mr Khan’s conduct caused Ms Magar to suffer loss and damage and ordered Mr Khan personally to pay Ms Magar a total of $305,000, comprising of general damages for sexual harassment, general damages for victimisation, aggravated damages and compensation for past and future economic loss.

Implications and Practical Guidance

The Magar Decision is a timely reminder to employers of the duty to prevent sex-based harassment and sexual harassment and the need to take proactive steps, rather than reactive actions. Employers should take the below active steps to ensure their compliance with the positive obligation:

• Renew Policies – Review and amend policies accordingly concerning sexual harassment and sex-based conduct.
• Training – Implement training for all employees (including senior members) and ensure they are completing mandatory sexual harassment training.
• Procedures – Provide clear procedures for employees to report sexual harassment and / or sex-based harassment.
• Risk Assessment – Conduct risk assessments of high risk workplaces and areas within workplaces and anonymous cultural surveys to identify pockets of potential concern and improve workplace culture.

As the positive duty requires active steps to prevent sexual harassment and sex-based harassment, employers and PCBU’s should ensure they are maintaining good governance and compliance by:

• providing training for senior employees when dealing with a report of sexual harassment, including how to manage the psychological safety of a complainant;
• recognising problematic conduct in the workplace and appropriately addressing it in the first instance; and
• ensuring confidentiality and sensitivity is maintained throughout the process.

This article was written by Danielle Flint, Partner and Jackie Sorial, Solicitor.