First sexual harassment decision under Fair Work Act provision
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It is hoped that the landmark ruling signals a shift in the professional landscape concerning sexual harassment and associated legal proceedings.
A young, female, migrant worker has been awarded almost $60,000 in penalties and compensation in the first case brought under the sexual harassment provision of the Fair Work Act 2009, as well as an additional approximate $30,000 relating to underpayments.
On 26 March 2026, the Federal Circuit and Family Court of Australia handed down a decision that the manager and sole director of Capital City-Bar, Cheenu Kehal, sexually harassed an employee of the business in July 2024.
The applicant first raised a complaint with Kehal on 29 July 2024 regarding missing pay slips, which was met with the offer of a shopping trip funded by himself.
Later that same day, the employee reported standing in the kitchen alone, at which point Kehal wrapped his arms around her from behind, constricting her upper arms and pressing her into the sink. With his face close to hers, he held his wallet, telling her to “take the money, take some”.
The employee reported taking the smallest note she could see out of fear for her safety, stating she then “pushed his right arm off of me, sweeping it back behind me and forcing him to take a step back”.
She said: “He then leant forward and kissed me on the lips.”
She did not return to the cafe after the incident, and commenced proceedings against Kehal and the business in question.
On 1 August 2024, the employee received a payslip understating the hours she had worked over the period of 22–28 July, and overstating her hourly rate.
Despite sending apologetic texts after the incident in late July asking her to return to work and keep his conduct to herself, Kehal initially denied the allegations. Following the preparation of an affidavit, however, he made full admissions at the hearing.
The conduct was deemed a breach of section 527D of the Fair Work Act, a specific provision prohibiting sexual harassment at work introduced in 2023 in response to the Respect@Work reforms.
In the determination, Justice Gavin Mansfield noted the power imbalance between employer and employee, the vulnerability of the applicant regarding her demographics, the contravention as a single incident, Kehal’s supposed remorse as indicative of self-preservation, and his initial reaction to the allegations.
At the same time, the applicant’s lawyers did not receive copies of timesheets, payslips, employment contracts, or any records despite requesting these documents in September 2024.
On 11 December 2024, the applicant received copies of pay slips from the Fair Work Ombudsman (FWO), which showed a total underpayment of $6,079.08.
Kehal was found in breach of several sections of the Fair Work Act in relation to these actions, including failures to provide relevant documentation at the commencement of employment, failing to give payslips to the applicant, providing false payslips to the FWO, failing to pay overtime, casual, and standard award rates, failing to make contributions to an employee’s super fund, failing to keep records, and failing to make said records available for inspection.
A total payment of almost $90,000 was ordered for non-economic compensation regarding hurt, distress, and humiliation, and further contravention of several sections of the Fair Work Act.
Kehal was ordered to pay the amounts within 60 days, with the court explaining that “such payment terms have purportedly been agreed as between the parties”.
These findings and the new Fair Work provision have been characterised as a significant development in Australian employment law, setting a new precedent for sexual harassment in the workplace.
The case: Mejia v Capital City Cafe-Bar [2026] FedCFamC2G 468
RELATED TERMS
Compensation is a term used to describe a monetary payment made to a person in return for their services. Employees get pay in their places of employment. It includes income or earnings, commision, as well as any bonuses or benefits that are connected to the particular employee's employment.
An employee is a person who has signed a contract with a company to provide services in exchange for pay or benefits. Employees vary from other employees like contractors in that their employer has the legal authority to set their working conditions, hours, and working practises.
Harassment is defined as persistent behaviour or acts that intimidate, threaten, or uncomfortably affect other employees at work. Because of anti-discrimination laws and the Fair Work Act of 2009, harassment in Australia is prohibited on the basis of protected characteristics.
Amelia McNamara
Amelia is a Professional Services Journalist with Momentum Media, covering Lawyers Weekly, HR Leader, Accountants Daily and Accounting Times. She has a background in technical copy and arts and culture journalism, and enjoys screenwriting in her spare time.
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