By: Laura Gavan, Caitilin Watson and Ashi Muraleetharan

Magar v Khan [2025] FCA 874

On 1 August 2025, the Federal Court of Australia (FCA) handed down judgment in Magar v Khan [2025] FCA 874, awarding the claimant $305,000. This amount comprised general, aggravated, and compensatory damages, including compensatory damages for past and future economic loss.

The case continues the trend of increasing awards in workplace sexual harassment matters. Bromwich J also considered the previously untested amendment of section 28AA of the Sex Discrimination Act 1984 (Cth), introduced following the Respect at Work report.

Background: Workplace culture and harassment in the fast food business

Ms Magar was employed at a Mad Mex franchise from September 2021 to February 2023. During her employment, she was subjected to sexual harassment by the sole director and owner of the company, Mr Khan. The workplace culture tolerated sexual comments about other staff and customers, including sexually explicit language, derogatory remarks, sexualised and demeaning questions, and intrusive inquiries. The Court found at [103]:

“The culture at that workplace tolerated overt and outspoken sexist and boorish behaviour as both collective behaviour and individual behaviour… Such a workplace culture can have the effect of normalising sexualised behaviour towards women and foster an escalation into worse behaviour, such as a progression into sexual harassment.”

Impact of legislative reform on sexual harassment claims

Following the Respect at Work report, section 28AA was inserted into the Sex Discrimination Act 1984 (Cth) to further define sexual harassment. Bromwich J considered the claimant’s specific vulnerabilities under section 28AA(2), particularly the significant power imbalance between Mr Khan and Ms Magar, caused by differences in seniority, age, experience, and influence. Ms Magar was 21 years old at the start of her employment, while Mr Khan was considerably older. The Court also noted the workplace was male dominated.

The Court found that the new definition of harassment on the ground of sex under section 28AA was not satisfied, as the workplace conduct did not occur directly in relation to Ms Magar. While the conduct need not be addressed directly to the harassed person, some nexus or connection to the claimant is required. The Court found it difficult to characterise the conduct as relating specifically to Ms Magar rather than to other women who were staff or customers [106].

Instead, the Court relied on the parallel definition in section 28A concerning Mr Khan’s sexual conduct directed towards the claimant. The case involved a “he said, she said” dispute, with Mr Khan denying the allegations and the claimant’s evidence, supported by contextual text messages, accepted. Mr Khan was found to have sexually harassed Ms Magar in contravention of section 28A.

Victimisation following complaint

Ms Magar was also found to have been victimised by Mr Khan after she pursued her complaint following the internal investigation. This victimisation included Mr Khan issuing purported Concerns Notices alleging that her complaints defamed him.

Damages determination in the case

Bromwich J noted:

“…comparisons between sexual harassment cases are not straightforward and the Court does not assess damages by performing arithmetic adjustments to prior determinations… prior awards of damages are therefore not precedents, but can act as yardsticks to assist in arriving at an appropriate measure of damages” [199].

The total award of $305,000 was broken down as follows:

Damages totaling $175,000, including:

• General damages of $160,000,
• General damages for victimisation of $10,000, and
• Aggravated damages of $5,000 due to aspects of how Mr Khan’s defence was conducted at trial.

Compensation totaling $130,000, including:

• $90,000 for past economic loss up to the hearing’s conclusion on 5 June 2025, and
• $40,000 for future economic loss from the hearing’s conclusion.

Ms Magar’s evidence on liability and quantum was less extensive than in other cases, and her relatively modest wage impacted the economic loss calculation. Drawing from Hughes trading as Beesley and Hughes Lawyers v Hill [2020] FCAFC 126, Bromwich J found that some of Mr Khan’s defence arguments were not bona fide, which justified the aggravated damages awarded.

Guidance for insurers on sexual harassment claims

Sexual harassment and discrimination claims continue to see increasing damages awards that reflect evolving community values. While the Court does not always require extensive evidence to substantiate general damages, medical evidence remains a persuasive factor. Claimants are not limited to unwelcome sexual conduct directed solely at them, however, the conduct must have some nexus or connection to the claimant.

This area of law is likely to continue developing given employers’ positive duty to eliminate sexual harassment, sex discrimination, hostile workplace environments, and victimisation, while also providing a safe workplace. Defence counsel should exercise caution in presenting defences, as poorly run defences may lead to aggravated damages awards.

Guidance for employers on preventing sexual harassment claims

Courts increasingly consider workplace culture in harassment and discrimination claims, including whether the conduct occurred in a workplace dominated by one sex and whether there are power imbalances. Employers must take proactive steps, such as implementing training, developing robust policies, and consistently enforcing these policies, to ensure their workplace does not foster an environment conducive to the escalation of poor behaviour that can lead to serious misconduct.

These measures align with the positive duty imposed on employers to eliminate sexual harassment, sex discrimination, hostile workplace environments, and victimisation.

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