The Fair Work Act 2009 (Cth) now includes a standalone prohibition on sexual harassment “in connection with work”, it provides a civil remedy pathway for compensation under federal workplace law.
In Eklom v Marshall [2026] FedCFamC2G 772, the Federal Circuit and Family Court ordered a contractor and a customer to pay $116,000 in compensation and penalties for serious homophobic and sexual harassment against a storage facility manager. The ruling highlights that individuals, even non-employees, can face personal liability and federal court proceedings for sexual harassment “in connection with work.”
What happened in Eklom v Marshall?
The worker was employed as a site manager at a Storage King facility. A cleaning and maintenance contractor began targeting him with repeated homophobic slurs, sexualised comments and unwanted physical contact and the conduct escalated when a regular customer joined in and adopted similar degrading behaviour.
The Court found the conduct was deliberate, ongoing and objectively humiliating, and went well beyond any suggestion of “banter”. The worker suffered significant psychological harm, including depression, as a result of the harassment. The Court accepted that the worker’s actual sexual orientation was irrelevant; what mattered was that the conduct was unwelcome, sexual in nature and occurred in connection with work.
The legal framework: section 527D of the Fair Work Act
Section 527D prohibits a “person” from sexually harassing another person who is:
- a worker in a business or undertaking
- a prospective worker in a business or undertaking
- a person conducting a business or undertaking
The provision protects a wide range of people who perform work, including employees, contractors, subcontractors, labour hire workers, apprentices, trainees, interns and some volunteers.
The prohibition applies where the harassment occurs “in connection with” the person’s work or prospective work. The focus is therefore on the work connection, not on whether the parties have a formal employment relationship.
Why the provision matters
Section 527D gives workers a clearer federal pathway for addressing workplace sexual harassment. Before these reforms, compensation claims for sexual harassment were often brought under discrimination legislation, work health and safety obligations or common law, which could create a fragmented pathway.
It also closes an important gap around third-party harassment. Workers have long experienced sexual harassment from customers, patients, clients and contractors, but it was not always straightforward to hold those individuals personally liable. Section 527D makes clear that liability can attach to any “person” provided the conduct is connected with work.
Orders made in Eklom v Marshall
The Court ordered the contractor and the customer to pay:
- $90,000 in compensation for pain and suffering, loss of enjoyment of life and psychological harm.
- $13,000 each in civil penalties, totalling $26,000.
The total financial outcome was therefore $116,000, ordered against the individual respondents rather than the employer. The decision also reflects the Court’s concern with deterrence, particularly given the seriousness of the conduct.
What this means for workers
For workers experiencing harassment, Eklom v Marshall is an important reminder that:
- Sexual harassment “in connection with work” is a standalone breach of federal workplace law.
- Individuals, including non-employees, can be held personally liable and civil penalties can be imposed on individual wrongdoers.
- Courts can award substantial compensation for psychological injury even without physical injury.
- “Locker room talk”, “banter” or “just joking” will not excuse conduct that is objectively offensive, intimidating or degrading.
Section 527D also operates alongside other legal pathways, including discrimination law, work health and safety law and workers’ compensation. In practice, strategic advice is often needed to decide whether to pursue a section 527D claim alone, in combination with other remedies, or as part of a broader resolution strategy.
Practical steps if you are being harassed at work
If you are experiencing sexual harassment at work, whether by an employer, co-worker, contractor or customer, it may help to:
- Keep a contemporaneous record of incidents, including dates, times, what was said or done, and who was present.
- Make a complaint internally under your employer’s policies, if it is safe to do so.
- Seek medical support if you are experiencing psychological symptoms.
- Obtain legal advice promptly, as strict time limits typically apply to claims.
This is general information only and does not constitute legal advice.
If you or someone you know needs advice or assistance, please call (03) 9600 2768 or email [email protected].