No Witnesses? Still Liable: Federal Court Expands Sexual Harassment Risk for Employers

The Federal Court’s decision in Clarke v Beiler Constructions Pty Ltd [2026] FCA 734 was handed down on 12 June 2026. The decision marks a significant development in Australian employment law, being the first Federal Court judgment after a contested hearing to consider the workplace sexual harassment provisions introduced into the Fair Work Act in 2023.

The decision provides important guidance on how these laws will operate in practice and the increasing level of risk faced by employers.

Key findings from the Federal Court

The case involved a fly-in/fly-out (FIFO) apprentice carpenter who alleged that her supervisor made explicit sexual remarks, including a direct request for sexual favours. There were no witnesses to the alleged conduct and the supervisor denied the allegations. Despite this, the Court found that two instances of sexual harassment were established on the balance of probabilities.

A central feature of the decision was the Court’s reliance on the employee’s contemporaneous disclosures to family members. Statements made by the Complainant to her son and parents shortly after the events occurred were treated as persuasive evidence that supported the Complainant’s credibility. This demonstrates that informal disclosures, even to non-workplace parties, may be significant in proving allegations.

The Court rejected the idea that the conduct was just workplace ‘banter’. It held that, regardless of any prior sexualised interactions, a direct request for sexual activity is clearly a sexual advance and a request for sexual favours under the legislation.

Importantly, the employer was held vicariously liable for the supervisor’s conduct, reinforcing the obligation on employers to take all reasonable steps to prevent workplace sexual harassment.

Lessons for employers

This decision highlights the need for employers to a adopt proactive and practical approach to managing sexual harassment risks. Key actions include:

• Ensuring your workplace policies clearly define and prohibit inappropriate conduct, including conduct often dismissed as ‘banter’.
• Provide regular training to employees and supervisors on acceptable behaviour and the limits of informal workplace culture and real risks that accompany “sexualized banter”.
• Implement reporting mechanisms that allow employees to raise concerns early, including informal or low-level complaints.
• Conduct thorough and impartial investigations, ensuring adequate but appropriate weighting is given to contemporaneous disclosures, even where no direct witness evidence exists.
• Regularly review compliance frameworks, particularly in high-risk environments such as remote or FIFO workplaces.

This initial decision signals a clear willingness by the Federal Court to enforce the strengthened statutory protections, which places an obligation on employers to prevent sexual harassment. It underscores the importance of maintaining effective, legally compliant workplace practices and processes by employers to mitigate risk.

Thynne + Macartney can assist employers to avoid exposure to the risks brought about by the 2023 Fair Work Act changes. These include comprehensive reviews of existing policy and procedural frameworks, employment and workplace policy updates, executive-level and staff training, internal investigations and the development and review of sexual harassment prevention plans (Queensland).