The past five years have seen significant legislative reform in respect of workplace sexual harassment, typified by the implementation of the Respect@Work changes to the Sex Discrimination Act 1984 (SD Act) and the Fair Work Act 2009 (Cth).
One of the most important changes was the imposition of a positive duty on employers and persons conducting a business or undertaking (PCBUs) to take reasonable and proportionate measures to eliminate sexual harassment, sex-based harassment, hostile work environments and victimisation in the workplace.
This positive duty goes beyond responding to and taking action against such conduct after it occurs in the workplace – it requires employers and PCBUs to take proactive steps to eliminate it as far as possible in the workplace before an incident occurs.
We are now starting to see judicial decisions dealing with these legislative reforms, the most recent being a decision of the Federal Circuit and Family Court of Australia (the Court) in Wood v Kendall [2026] FedCFamC2G 889.
In this matter, the Court heard a claim made against Heating & Cooling Australia Pty Ltd (the Employer) and its sole director. Specifically, the claim was that the sole director had engaged in sexual harassment of an employee (the Applicant) who had been placed on a two-week employment trial through a disability support service. The Applicant also claimed that the Employer was vicariously liable for that conduct.
The Employer and the sole director did not participate in the proceedings. This is despite showing initial willingness to participate in the earlier stages of the proceeding, including a stated intention to attend mediation which they did not ultimately attend.
The Court’s consideration of the issues therefore proceeded on the uncontested evidence put forward by the Applicant.
It found that the sole director had engaged in sexual harassment of the Applicant in breach of the SD Act.
It also found that the Employer was vicariously liable for the director’s unlawful conduct. It found that at no point had the director (who was the secretary and sole owner of the Employer) taken any steps at all to prevent the sexual harassment, let alone any “reasonable steps” that might provide grounds for an exception to a finding of vicarious liability.
In this regard, it noted that when the Applicant commenced work, she had advised the director of her mental health conditions and he had indicated that he would be supportive of her need to attend medical appointments. Importantly, the Employer had not taken any of the following steps:
The Court also found that the Employer had failed to comply with its positive duty under the SD Act to take reasonable and proportionate measures to eliminate, as far as possible, conduct including sexual harassment.
The Applicant was awarded damages in the amount of $115,000 plus economic loss in excess of $10,000.
This decision is a timely reminder to employers of the positive duty imposed by the SD Act to take reasonable and proportionate measures to eliminate, as far as possible, conduct including sexual harassment in the workplace.
Compliance with this positive duty may also provide employers with grounds to secure an exemption from vicarious liability under the SD Act.
What is reasonable and proportionate will differ for every workplace and so appropriate legal advice should be sought to ensure proper compliance with these duties.
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