First award of civil penalties for sexual harassment under the Fair Work Act

Mejia v Capital City Cafe-Bar [2026] FedCFamC2G 468

In the recent decision of Mejia v Capital City Cafe-Bar [2026] FedCFamC2G 468, the Federal Court awarded $90,000 in penalties and compensation to a young café employee who was sexually harassed at work in 2024.

This case marks the first decision under the civil penalty provision s 527D of the Fair Work Act 2009, following its introduction in 2023 with the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 (Cth).

This decision reinforces that sexual harassment in the workplace is completely unacceptable, and acknowledges the significant impact that even a single instance of sexual harassment has on an individual.

Background

The Applicant was 23 years old, on a bridging visa. She was employed as a casual waitress at the Capital City Café-Bar, which was operated by its sole director, Mr Kehal and his wife.

Whilst alone with the Applicant in the café’s kitchen, Mr Kehal hugged her from behind while she was washing dishes, pinning her to the sink, and pressured her to take money from him. He then kissed her without her consent.

The Applicant did not return to work after the incident, despite Mr Kehal pleading with her to return via a series of text messages.

This incident came shortly after the Applicant had queried discrepancies with her pay. During her 12 weeks of employment at the café, the Applicant received only one pay slip, which was provided three days after her final shift. The pay slip understated her hours worked and overstated the hourly rate she was being paid.

Contraventions

The Court found that Mr Kehal contravened s 527D of the Fair Work Act 2009 by sexually harassing the Applicant in connection with her employment.

Additionally, Mr Kehal was involved in multiple other contraventions under the Fair Work Act 2009 and the Restaurant Industry Award 2020, including underpayment, failure to provide payslips and the provision of false and misleading payslips, failure to pay superannuation, and failure to provide required employment information.

Penalties

The Court ordered that Mr Kehal pay a total of $90,000 in penalties and damages, including:

• $50,000 compensation for hurt, distress, and humiliation suffered by Ms Mejia from the sexual harassment;
• $9,390 a pecuniary penalty for breach of s 527D of the Fair Work Act; and
• $30,610 for all other contraventions of the Fair Work Act, including wage and record keeping contraventions.

Consideration

In determining the appropriate penalty, the following factors were relevant:

• The Applicant’s position as a vulnerable young, female migrant worker, with limited finances and social supports;
• Mr Kehal’s position of authority over the Applicant, and attempt to misuse that authority; and
• Mr Kehal’s delayed response to the allegations, in only admitting to the allegations on the day of the hearing

The Court did not accept that Mr Kehal’s apologies were genuinely remorseful. The Court accepted the Applicant’s submission that a single incident of sexual harassment is not a mitigating factor.

Key takeaways for employers

• Significant compensation and penalties can be awarded for a single incident of sexual harassment in the workplace;
• Ensure that you have comprehensive systems and training in place to educate and prevent sexual harassment in the workplace;
• Courts will look to practical, preventative steps taken by employers, and whether complaints were handled promptly and appropriately.

This case sets the precedent that sexual harassment can have significant financial consequences, beyond the already significant emotional, physical and psychological harm caused to the individual subject to the harassment.

If you require assistance in updating your sexual harassment training and policies, please contact Page Seager Lawyers.