Navigating the Expanding Risk Landscape of Sexual Harassment in the Workplace

| June 20, 2026

The Changing Landscape of Workplace Sexual Harassment

The decision in Clarke v Beiler Constructions Pty Ltd as trustee for Fox Trading Trust¹ highlights how workplace sexual harassment is exposing employers to an increasingly complex and intersectional risk environment; one where prevention failures are becoming significant liability issues and not merely poor management practices.  

As a result, there is a shifting the risk landscape from reactive complaint handling to demonstrable proactive risk management. 

Background 

The applicant, Ms Clarke, was employed by Beiler Constructions  Pty Ltd (Beiler Constructions) (Respondent 1), as a full-time adult apprentice carpenter. Ms Clarke was assigned to work at the Southern Ocean Lodge construction site on Kangaroo Island on a fly-in, fly-out (FIFO) basis, as well as at various metropolitan sites in Adelaide. She was the only female employee working on the Kangaroo Island site 

During her employment, Ms Clarke commenced an intimate relationship with a colleague, James Stott. Ms Clarke states that while working on Kangaroo Island, she was subject to comments of a sexual nature by her site supervisor (Respondent 4) including a request for a sexual favour which she deflected. 

Following her third FIFO swing in late May 2023, the sole Director of the Company (Respondent 2) informed Ms Clarke that she would not be returning to Kangaroo Island and would instead work solely on Adelaide-based sites. 

On 30 June 2023 the Director informed Ms Clarke he was downsizing and her services were no longer be required. Ms Clarke’s employment ended on 3 July 2023 after she sent a text message to the Director saying she was “done”, following the end of her shift.  This was interpreted by the Director as Ms Clarke resigning effective immediately. 

Key Findings on Sexual Harassment 

Ms Clarke subsequently initiated proceedings in the Federal Court of Australia (FCA), alleging multiple contraventions of the sexual harassment provisions under section 527D of the Fair Work Act 2009 (Cth) (FW Act) by co-workers (Respondent 4) and (Respondent 5), with Beiler Constructions vicariously liable under section 527E  

Section 527D makes it unlawful for a person to sexually harass a worker, a prospective worker, or anyone who is conducting a business. As an employee, Ms Clarke was considered to be a worker for the purposes of the FW Act.  

The FCA found that Respondent 4 engaged in two clear contraventions of section 527D of the FW Act by asking Ms Clarke for oral sex and whether she knew “that James Stott has a sweaty dick”. Both incidents constituted unwelcome conduct of a sexual nature where a reasonable person would have considered Ms Clarke to have been offended. 

The Real Battleground Is “Reasonable Steps”

Under section 527E of the FW Act, an employer is vicariously liable for sexual harassment perpetrated by employees in the course of their employment unless the employer can prove it took “all reasonable steps” to prevent the conduct. 

Beiler Constructions was held vicariously liable for the sexual harassment committed by Respondent 4 as it could not demonstrate it had taken “all reasonable steps” to prevent sexual harassment from occurring in its workplace.  

The preventative measures taken by Beiler Constructions were highly informal and unstructured in nature which is not sufficient to demonstrate that a robust sexual harassment prevention framework was in place.  

For example, Justice McDonald found that the sole Director showing Ms Clarke the employee handbook on a mobile phone screen which was difficult to read, does not constitute a structured approach to eliminating workplace sexual harassment  

Prevention is Better Than “Cost” 

Sexual harassment prevention failures are now litigation risks, not just policy issues.  The transition of sexual harassment from a jurisdiction limited to preventative stop-orders into a mainstream civil remedy framework, should be a call to arms, in terms of the impact of civil and individual penalties and reputation on employers.  

For more on compensation and penalties, read our June article “Customers, Contractors and Sexual Harassment” here.   

Changing Landscape 

Our risk landscape now includes; 

• direct civil remedy liability under the Fair Work Act 2009 (Cth) for sexual harassment in connection with work;  

• continuing and expanded liability under the Sex Discrimination Act 1984 (Cth), including sexual harassment, sex-based harassment, hostile workplace environment claims and vicarious liability; and  

• a proactive regulatory model under the positive duty reforms, supported by Australian Human Rights Commission compliance and enforcement powers. 

Additionally, sections 28AA and 28M of the Sex Discrimination Act 1984 (SDA) broadens exposure beyond conventional direct-proposition cases. An employer may be exposed not only for individual incidents of sexual harassment, but also for systemic workplace conditions that are hostile on the ground of sex, and for degrading sex-based conduct that falls short of classical sexual advances. 

Implementing clear preventative measures for workplace sexual harassment is not merely good practice; they are central to a defence strategy.  

Outcome 

In summary:  

• Of the four allegations of sexual harassment raised against Respondents 4 and 5, two were substantiated. Judge McDonald found that the site Supervisor (Respondent 4) sexually harassed Ms Clarke on two separate occasions, in breach of s527D of the FW Act 2009.  

• Respondent 1 (Belier Construction) was held to be vicariously liable for the conduct of Respondent 4 pursuant to s527E of the FWA.  

Of note in this decision, there were no witnesses to the sexual harassment. In the absence of witnesses, McDonald J, was required to make an assessment of witness credibility.

Importantly, his Honor accepted the evidence of Ms Clarke, noting the actions she took after the conduct she complained of as consistent with the conduct having occurred. This included Ms Clarke talking to several family members about the conduct contemporaneously.

The evidence provided by those family members was held to be consistent, and reliable, with his Honor also considering it highly improbable that Ms Clarke would have told her son of the conduct if it did not occur.  

The matter will proceed to a further hearing where compensation and/or pecuniary penalties will be considered and determined. 

What Employers Can, and Should Be Doing 

Some key steps employers can take now to eliminate workplace sexual harassment and demonstrate they have taken reasonable steps in this regard is to; 

• Introduce a well sexual harassment policy that clearly sets out expectations for behaviours at work, processes for the making of complaints, and the implications for engaging in sexual harassment. Your policy should: 

• Be aligned to the Fair Work Act, SDA and positive duty framework; 

• Include controls for high-risk contexts such as remote work, travel, accommodation, client-facing work and power-imbalanced teams; 

• Be regularly reviewed and updated (either on an annual basis or as a concern arises) 

• Implement regular, interactive, and tailored training for all staff, with mandatory attendance tracking. 

• Establish multiple confidential, accessible reporting channels and trauma-informed, impartial investigation protocols.  

• Implement monitoring, auditing and data review process to assess steps being taken continue to meet legal obligations, are practical for the workplace, and remain effective control measures. 

Queensland Employers

Employers based in Queensland have a legal obligation (and have done so since March 2025) to have a Sexual Harassment Prevention Plan in place. Failure to meet this legal obligation will result with civil penalties. For more information about the support IRiQ can provide, click here.  

This FCA decision serves as a reminder to employers that cursory management measures, “compliance on paper” and inadequate policy implementation to prevent workplace sexual harassment, will not protect employers from vicarious and individual liability. 

Finally, the judgment strengthens the operation of the FW Act’s relatively new sexual harassment provisions, and sends a clear message that employers and individuals can be held accountable for inappropriate workplace behaviour. 

IRiQ will report on the outcome of the compensation and penalties hearing once known.  

Strengthening Your Sexual Harassment Prevention Framework

Managing workplace sexual harassment requires more than policies on paper. Employers need practical, well-implemented measures that demonstrate they have taken reasonable steps to prevent unlawful conduct.

IRiQ Law can assist with Sexual Harassment Prevention Plans, tailored Sexual Harassment Policies, workplace investigations, manager and employee training, and practical advice to help your organisation meet its legal obligations.

Our Sexual Harassment Policy is available as:

• $250 for a template policy; or
• $750 for a tailored policy, including a consultation with one of our team members to discuss implementation.

We also deliver comprehensive workplace training to help managers and employees understand their rights, responsibilities and obligations.

If you would like to strengthen your workplace prevention framework, contact our team.

Footnote

¹ [2026] FCA 374.