The Federal Court has awarded substantial damages and compensation to a former Mad Mex franchisee employee who was found to have been sexually harassed and victimised by the franchisee’s owner (see Magar v Khan [2025] FCA 874).
Ms Biplavi Jarga Magar (Applicant) worked at a Mad Mex restaurant owned by Mr Sher Khan (Respondent) from 2021 to 2023, beginning when she was just under 21 years old. The Respondent was also employed at the restaurant in a senior role.
Throughout the course of her employment, the Applicant witnessed the Respondent, and two other male staff members, using sexualised and sexually explicit language and descriptions when referring to female employees and customers. She also experienced male staff being disrespectful to her, undermining her managerial directions and dictating how she and other women should dress.
In the last two months of her employment before she left, the Applicant experienced further and more specific instances of sexual harassment, including being asked sexualised and demeaning questions by the Respondent.
A couple of months after leaving her employment, the Applicant made a complaint about the Respondent with Mad Mex, the franchisor. She also engaged a lawyer to email the Respondent, alleging that she had been subjected to serious and repeated sexual harassment, harassment on the ground of sex and discrimination on the ground of sex. The email requested a copy of the Applicant’s employment contract and other items but no response was received.
Mad Mex commenced an investigation into the Applicant’s complaint, which found that some of the allegations made by the Applicant were substantiated. Mad Mex then sent a ‘Notice to Remedy Breach of Franchise Agreement’ to the Respondent which stated that it considered the Respondent and the franchisee had breached various policies and laws including the Sex Discrimination Act 1984 (SD Act). The Notice required the Respondent to remedy the breaches to avoid Mad Mex terminating the franchise agreement.
Shortly after being sent this Notice, the Respondent engaged lawyers to send a ‘Concerns Notice’ to the Applicant, alleging that the complaints made by the Applicant were defamatory. The Respondent sought monetary compensation and an apology from the Applicant, as well as a withdrawal of her complaints. The Applicant denied that her complaints were defamatory and refused to make an offer of amends. The Respondent then issued a second Concerns Notice to the Applicant, which the Applicant again responded to and denied.
The Applicant then made a complaint with the Australian Human Rights Commission (AHRC), alleging that the Respondent:
The Respondent denied any wrongdoing.
Under the SD Act, it is unlawful for an employee or ‘person conducting a business or undertaking’ to sexually harass, or harass on the ground of sex, a fellow employee or prospective employee.
Sexual harassment is defined as conduct where a person makes an unwelcome sexual advance or unwelcome request for sexual favours to another person, or engages in other unwelcome conduct of a sexual nature towards the other person, in circumstances where a reasonable person would have anticipated the possibility that the other person would be offended, humiliated or intimidated.
Some of the circumstances which are relevant to determining sexual harassment include but are not limited to the age, sex, sexual orientation, relationship status, religion and race of the person harassed, as well as the relationship between the person harassed and the person who engaged in the sexual harassment.
Harassment on the ground of sex is similar to but distinct from sexual harassment, and occurs where a person engages in unwelcome and demeaning conduct in relation to another person because of the other person’s sex or a characteristic that appertains to, or is generally imputed to the other person’s sex, in circumstances where a reasonable person would have anticipated the possibility that the other person would be offended, humiliated or intimidated. This is one of the newer duties added to the SD Act, introduced in 2021.
Some of the circumstances which are relevant to determining harassment on the ground of sex include but are not limited to the age, sex, sexual orientation, relationship status, religion and race of the person harassed. Other circumstances include the relationship between the person harassed and the person who engaged in the harassment, the seriousness of the conduct, whether the conduct has been repeated and any power imbalance between the two persons involved.
Since December 2022, employers have a positive duty to proactively and meaningfully prevent sexual harassment, discrimination on the grounds of sex, sex-based harassment and victimisation in the workplace as well as preventing a workplace environment that is hostile on the grounds of sex.
This case was the first to consider what constitutes harassment on the grounds of sex.
Sexual harassment
In the decision, the Court made several comments about the characterisation of conduct as sexual harassment. It noted that there are essentially three elements to the definition of sexual harassment:
In relation to the second element, the Court commented that this is assessed subjectively (i.e. did the complainant feel that way) and is ordinarily proved by the person allegedly harassed giving evidence that the conduct was in fact unwelcome. A person who alleges sexual harassment is not under an obligation to positively reject the sexual conduct or expressly inform the other person that their conduct is unwelcome at the time, in order for the conduct to be found to be unwelcome.
In relation to the third element, the Court noted that this is to be assessed objectively (i.e. what would a reasonable person feel) with consideration to several factors, however the intention of the alleged harasser is not relevant. The Court found it was appropriate in this case to have regard to the Applicant’s complex mental history, including a period of hospitalisation for psychosis, because this information was known to the Respondent and contributed to the Applicant’s vulnerability.
The Applicant gave evidence that multiple incidents occurred between her and the Respondent, which she argued constituted sexual harassment. This included an incident where the Respondent noticed a ‘hickey’ on the Applicant’s body, proceeded to ask her if she got “banged”, pointed out the hickey to other staff and asked them what they ‘thought’ about the hickey.
Another set of incidents involved instances where the Applicant was asked to accompany the Respondent to his car for different reasons, such as to buy food supplies together. The Applicant gave evidence that on one occasion, the shop had run out of corn chips, so the Respondent took her in his car to a supermarket to purchase some. Afterwards while unloading the car, the Respondent asked the Applicant about the person who gave her the hickey and asked her if she had ever had lesbian sex or watched lesbian pornography.
In another instance, the Applicant was sitting in the Respondent’s car with him when he brought out an iPad and proceeded to show her pornographic videos. The Respondent also asked the Applicant which of her coworkers she would have sex with, including mentioning coworkers who were minors. Other car-related instances involved the Respondent showing sex toys to the Applicant, asking her extremely intrusive and sexual questions, and telling her stories about his sexual encounters with other employees.
The Court accepted the Applicant’s evidence and rejected the Respondent’s denials, noting that the Applicant was also clearly upset while giving her evidence.
In determining whether the reported incidents did constitute sexual harassment, the Court also considered the following circumstances / characteristics which were known to the Respondent:
However, that being said, the Court stated that the Respondent’s conduct was so serious that even without these circumstances, a reasonable person would have anticipated offence, humiliation and intimidation arising from the Respondent’s conduct. The Court found that the allegations made by the Applicant did constitute sexual harassment.
Harassment on the ground of sex
The Court also provided commentary on what conduct constitutes harassment on the ground of sex, referencing the Explanatory Memorandum that introduced this provision which explains that “people may experience forms of harassing conduct based on their sex, but that is not necessarily sexual in nature”.
The Court identified four elements to establish harassment on the ground of sex:
In relation to the first element, the Court noted that the conduct could be oral or written statements made to a person or in their presence. The conduct does not have to be directly addressed to the person harassed, however there must be some connection between the conduct and the person harassed, such that the conduct can be said to be ‘in relation to’ the harassed person.
Similarly to sexual harassment, just because the person harassed does not explicitly address the conduct or inform the perpetrator that it was unwelcome at the time, does not mean that the conduct could then be said to have been welcome (or not unwelcome).
The Applicant gave evidence that during her employment, she witnessed the Respondent and other male staff make inappropriate comments about other female employees and customers, such as commenting on their bodies, making sexualised jokes about them and calling them ‘skank’ and ‘whore’.
The Court accepted this evidence and concluded that the culture of the Applicant’s former workplace tolerated “overt and outspoken sexist and boorish behaviour as both collective behaviour and individual behaviour”. The Court found that through their conduct, senior staff including the Respondent fostered a workplace that was tolerant and possibly even conducive to continuing sexist conduct.
However, the Court did not accept the Applicant’s argument that this behaviour, which was witnessed by her and done in her presence but not directed to her or concerning her, could constitute harassment on the ground of sex ‘in relation to’ the Applicant.
In its analysis, the Court concluded that the purpose of the provision for harassment on the ground of sex was to extend “the prohibition on sexual harassment to cover conduct which fell short of being sexual in nature, but went beyond constituting only discrimination on the ground of sex”. The Court considered that the phrase ‘in relation to’ was not materially different in meaning to ‘in respect of’.
Given the evidence presented by the Applicant, the Court could not be satisfied that the inappropriate comments made by the male staff about other women in her presence could constitute harassment towards her on the ground of sex – there was an insufficient connection between the conduct and the Applicant. If the comments had been about the Applicant (instead of other women) and they were communicated to her directly or in such a way that the Applicant would have been able to hear or perceive them, then this could constitute harassment on the ground of sex.
Victimisation
The Applicant alleged that after her complaint to Mad Mex and a letter from her solicitors about her allegations, the Respondent victimised the Applicant by sending two ‘Concern Notices’ threatening litigation (defamation proceedings) against the Applicant.
The Court assessed whether the Concern Notices would amount to ‘detriment’ under the SD Act’s victimisation provision. The Applicant gave evidence that receiving these two letters aggravated her psychiatric symptoms, made her feel dismissed and worried and took away her sense of self.
The Court found that the Concern Notices caused the Applicant “a real level of distress which went beyond being trivial”, and that distress was deemed a ‘detriment’ under the SD Act’s victimisation provision.
The Court also considered whether there was a sufficient causal connection between the Applicant’s complaint to Mad Mex and decision to pursue her complaint further, and the sending of the Concern Notices from the Respondent. The Applicant argued that the Concern Notices were sent in retaliation after the Respondent found out the Applicant was considering furthering her claim after the Mad Mex investigation had concluded.
The Respondent denied that the Concern Notices were sent to intimidate the Applicant, however he admitted that he was “trying to put an end to everything”. The Court found that this intention was “unavoidably directed to stopping [the Applicant] from maintaining her complaints against him of, inter alia, sexual harassment”. Therefore, the Court was satisfied that the Respondent committed acts of victimisation against the Applicant by sending the Concern Notices.
Respondent’s arguments
The Respondent made blanket denials that the alleged conduct occurred at all, rather than attempting to deny that the alleged conduct was not sexual harassment, harassment on the ground of sex or victimisation. The Respondent also sought to characterise the Applicant’s allegations as fictional manifestations or distorted perceptions of reality resulting from her mental illness.
Some of the allegations raised by the Applicant were that the Respondent sexually harassed her by making comments sharing details about his sexual activities. The Respondent gave evidence that he experienced erectile dysfunction, and it was suggested that because of this condition, he could not be physically aroused and therefore it was improbable or unlikely that he would have made those comments about his sexual activities to the Applicant.
The Court accepted the Respondent’s evidence about his medical condition. However, the Court rejected this argument, noting that “boasting or bravado about fictional sexual exploits is notoriously an aspect of sexual harassment”. The Court accepted that the Respondent did make those comments to the Applicant; there did not need to be any evidence that the sexual activities detailed by the Respondent in his comments to the Applicant actually occurred, in order for the Court to accept that those comments were made.
The Court also observed that, tellingly, the Applicant’s evidence did not contain any account of a request or overt suggestion of sexual activity between the Respondent and Applicant. The Applicant’s account of events did not include any instances where the Respondent made a sexual advance or requested sexual favours, which was consistent with the Respondent’s own evidence about his impotence – a condition that the Applicant was not aware of.
The Respondent also argued that it was not plausible that the Applicant would have continued to accompany the Respondent to his car and attend work after the first few alleged incidents of sexual harassment, if those incidents did in fact occur. The Court did not accept these contentions, pointing out that there can be a number of reasons why a person would continue to attend work after a traumatic experience had occurred there, with the most obvious reason being to earn a livelihood. In relation to the repeated car incidents, the Court observed it was unlikely that the Applicant felt she could say no to the Respondent’s requests to accompany him to the car – he was her superior. In any event, the Applicant did stop working for the Respondent soon after the last car incident.
The Court concluded that the Respondent:
Due to the way in which the Respondent conducted his case during the hearing (by putting forward highly offensive and baseless arguments), the Court found it was appropriate to award aggravated damages to the Applicant, in addition to compensation and damages for the sexual harassment and victimisation.
The Court ordered that the Respondent pay a total of $305,000 in damages and compensation to the Applicant. The breakdown of this figure was as follows:
This case is an important reminder for employers to uphold the positive duty to prevent sexual harassment and other related unlawful conduct.
Employers should:
proactively respond to and investigate allegations or potential instances of sexual harassment or other unlawful conduct, regardless of whether that conduct has been .
For advice on your workplace’s compliance with the positive duty, contact a member of our Workplace Relations and Safety Team today.