Eklom v Marshall [2026] FedCFamC2G 7721 is a sharp reminder that workplace sexual harassment liability under the Fair Work Act 2009 (Cth) (FW Act) is not confined to misconduct by direct employees, managers or supervisors.
For Queensland businesses, advisers and site managers, the decision highlights a practical reality: contractors, customers and other regular workplace participants can create serious legal exposure where their conduct occurs “in connection with work”.
Background
Mr Samuel Eklom worked as a site manager at a Queensland storage business. His site management responsibilities included customer service, marketing, banking and maintenance co-ordination.
The harassment arose from two non-employees: Mr Jacob Marshall, who was both a customer and contractor engaged to assist with cleaning and maintenance, and Mr Troy Mitchell, a regular customer whose business meant he became “a consistent feature of the workplace environment” (the Respondents 2 and 3).
Respondents 2 and 3 did not participate in the proceeding. In their absence, the Court found that they both had sexually harassed Mr Eklom in contravention of s527D of the FW Act.
The conduct included repeated homophobic and sexualised comments, references to Mr Eklom as “the gay boy”, “the storage queen” and “the office boy”, sexually explicit remarks connected to ordinary work tasks, and a text message in which one of the individual Respondents wrote: “I’m at home you poof”.
The FW Act Extends Beyond Employees
The complaint of sexual harassment was heard by Justice Vasta of the Federal Circuit and Family Court of Australia (FCFCOA)
FW Act section 527D prohibits sexual harassment “in connection with work”. Judge Vasta’s reasons for his findings are significant because they emphasise that the statutory focus is on the protected person’s status as a worker, not on whether the harasser is an employee of the business.
His Honour stated:
“it really does not matter who the first person is, as long as the second person is a worker”.
The FCFCOA gave a practical example that should be front of mind for hospitality, retail, construction, storage, transport and other customer-facing businesses:
“if a “first person” is a patron at a restaurant and sexually harasses a waitress, then the waitress, being a worker in the business (and therefore the “second person”), is protected under s527D, because the waitress would be a worker and the harassment occurred in connection with her being a worker.”
Why the Decision Matters
That reasoning is the key operational message. A workplace is not insulated from sexual harassment risk merely because the perpetrator is a customer, contractor, subcontractor, supplier, visitor or other third party. If the conduct occurs in connection with the worker being a worker in the business or undertaking, FW Act s527D may be engaged.
Justice Vasta also rejected any attempt to minimise the conduct because Respondents 2 and 3 were not superiors. His Honour accepted there was not the same aggravating feature as harassment by a superior against a subordinate, but made clear that this did not reduce the seriousness of the workplace harm:
“this is still an example of the sort of conduct that just cannot be allowed to occur in the workplace.”
And, on penalty:
“It is a serious matter, and it must be met with condign penalty”.
Compensation and penalties
The Court awarded Mr Eklom $90,000 in compensation under FW Act s545(2)(b) for loss suffered because of the contraventions. Respondents 2 and 3 were held jointly and severally liable for that amount.
The compensation was directed to the effect of the harassment on Mr Eklom. The FCFCOA accepted medical evidence of anxiety, stress and depressive disorder, and described the consequences as “quite harrowing”, including isolation, degradation and the experience of being “two against one”. However, it did not award compensation for past or future economic loss, because that loss was not found to have been caused by the contraventions.
The penalty orders were also substantial. Each respondent (2 and 3) was ordered to pay a $13,000 pecuniary penalty, notwithstanding that Mr Eklom had sought a lower penalty. The FCFCOA considered that a lower penalty would not achieve the necessary deterrent effect.
Importantly:
- the $90,000 compensation order was made against Respondents 2 and 3 jointly and severally;
- each respondent was separately ordered to pay a $13,000 pecuniary penalty;
- the amounts were payable within 60 days;
- aggravated damages were refused;
- costs were declined; and
- the conduct was treated as serious even though the harassers were not managers, superiors or employees of the business.
The judgment also records that, when Mr Eklom produced a recording of interactions, he was told that he had contravened s 43 of the Invasion of Privacy Act 1971 (Qld). That factual detail is a useful Queensland-specific reminder: businesses must manage complaints carefully, including where workers produce recordings or other evidence.
Practical Steps for Employers
- Treat third-party misconduct as a workplace risk
Policies and systems should expressly cover sexual harassment by contractors, customers, suppliers, visitors, labour hire workers and other non-employees.
- Control the workplace environment, not just the payroll
A person does not need to be an employee to create risk. Regular customers and contractors who become part of the day-to-day workplace environment require active oversight.
- Build complaint pathways for non-employee conduct
Workers should have clear options for reporting harassment by customers and contractors, including after-hours contact points and escalation channels outside the immediate site manager.
- Train managers to respond immediately
Managers should understand that “banter”, homophobic comments, sexualised remarks and conduct linked to ordinary work tasks can amount to sexual harassment. Delay, minimisation or retaliation can compound risk.
- Escalate repeat or serious conduct
Repeat customers or contractors who harass workers should be subject to commercial consequences, including warnings, site exclusion, suspension of services or termination of contractor arrangements where appropriate.
- Keep proper records
Businesses should document complaints, witness accounts, CCTV or electronic material, steps taken, communications with the alleged harasser, and measures implemented to protect the worker.
- Review contractor and customer-facing protocols
Contractor agreements, site rules, customer terms and induction materials should prohibit sexual harassment and reserve rights to remove persons from site or terminate access.
- Avoid reflexive responses to worker evidence
Where a worker provides recordings, screenshots or messages, the response should focus first on safety, complaint handling and evidence preservation. Any Queensland privacy issue should be assessed carefully and not used to deflect from the harassment complaint.
Eklom is a concise but important warning. The modern workplace includes more than employees, and s 527D reflects that reality. For businesses and their advisers, the risk management task is now broader: prevent, identify and respond to sexual harassment by anyone whose conduct intersects with work.
Managing Sexual Harassment Risks Beyond Your Workforce
The Eklom decision is a timely reminder that workplace sexual harassment risks can arise from customers, contractors and other third parties—not just employees.
IRiQ Law can assist with reviewing workplace policies, complaint procedures, contractor arrangements and workplace investigations, as well as managing complaints involving external parties.
For Queensland businesses, our Sexual Harassment Risk Management Plan service can help identify and manage workplace risks, including those arising from customers and contractors. Since March 2025, all Queensland businesses have been required to proactively manage sexual harassment risks. The Eklom decision highlights why risks arising from external parties should form part of that assessment.
If you would like assistance reviewing your risk management framework or ensuring your Sexual Harassment Risk Management Plan remains fit for purpose, contact us to learn how we can help.
Footnote
1 Eklom v Marshall [2026] FedCFamC2G 772
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