Australia’s Biggest Sexual Harassment Payout: What Business Owners Must Learn from the Mad Mex Case

A Record Sexual Harassment Payout in Australia – and a Wake-Up Call for Employers

In a landmark decision that should make every Australian business owner sit up and listen, the Federal Court has ordered the highest ever sexual harassment payout in Australian legal history—$305,000.

The case involved a young Nepalese woman, Ms. Magar, who worked casually at a Mad Mex franchise while on a student visa. Her harasser? A manager nearly three times her age. The case, and the judgment that followed, has implications far beyond this single workplace.

At Bane Legal Services, we help businesses connect with experienced employment lawyers who can ensure your workplace policies and culture are not just compliant, but protective. We’re not a law firm, and we don’t provide legal advice—but with over 30 years in business, we know how costly the wrong culture can be.

The Facts: Harassment, Power Imbalance, and a Hostile Culture

The Court found that Ms. Magar was subjected to repeated and escalating harassment, including:

• Sexualised comments about her appearance and private life

• Being shown pornography in a manager’s car

• Mockery and jokes made in front of other staff

• A workplace culture that tolerated or encouraged sexist behaviour

The harasser, Mr. Khan, targeted her age, visa status, and social isolation. Shockingly, the Court accepted that the broader workplace culture at the franchise normalised sexist conduct—a dangerous environment where inappropriate jokes and language were routine among senior staff.

Justice Bromwich made it clear: when everyday sexism is tolerated, it becomes the foundation for serious misconduct.

Weaponising Defamation: A Landmark Finding on Victimisation

In another first, the Court found that when Ms. Magar attempted to take her complaint further, she was unlawfully victimised. Mr. Khan, through a solicitor, sent two formal “Concerns Notices” (commonly used in defamation threats) in an attempt to silence her.

The Court ruled this tactic was itself a form of victimisation. This sends a clear message: trying to silence a complainant through legal threats can breach the law.

The Real Impact: Trauma, Silence, and the Risk to Migrant Women

Ms. Magar’s trauma was so severe that she has not returned to work in over two years. The Court acknowledged the long-term psychological damage caused—not just by the harassment, but by the franchise’s failure to act.

Sadly, her story is not unique.

According to Unions NSW, half of migrant women experience sexual harassment—yet 70% don’t report it. Cultural barriers, fear of visa repercussions, and lack of trust in internal processes are all contributing factors. The Australian Human Rights Commission has found similar trends across racially and culturally marginalised women.

Why Employers Can’t Wait for a Lawsuit to Act

Since December 2022, the Sex Discrimination Act places a positive duty on all Australian employers—regardless of size—to take proactive steps to eliminate sexual harassment. That includes:

• Acting on everyday sexist behaviour

• Building accessible, trauma-informed pathways for complaints

• Creating a workplace culture where dignity and safety come first

Waiting for a complaint—or worse, a court case—is no longer a defensible position. If you’re a franchisor, retailer, or small business owner, this ruling should prompt an urgent review of your workplace policies and culture.

How Bane Legal Services Can Help

At Bane Legal Services, we’re not here to provide legal advice. But we are here to connect you with the right employment lawyer—someone who understands your industry, your risks, and your obligations under the current law.

Whether you’re:

• Drafting or reviewing harassment and discrimination policies

• Investigating internal complaints

• Worried about your business’s exposure to claims

We’ll help you find a qualified legal expert who speaks your language and gets results.

Final Word to Employers

A respectful and inclusive workplace doesn’t happen by chance. It takes intent, leadership, and legal support that’s tailored to your business. Don’t wait for a lawsuit to act.

If you're unsure whether your workplace is compliant or culturally safe, let Bane Legal Services match you with the right legal professional to help you move forward with confidence.

Need help navigating your workplace obligations?

Reach out to Bane Legal Services today and let us connect you with an employment lawyer who can protect your people—and your business.