A recent decision involving a Canberra café is a stark reminder that sexual harassment and basic Fair Work compliance failures can expose businesses (and individuals) to significant legal and financial consequences. In Mejia v Capital City Cafe-Bar [2026] FedCFamC2G 468, the Federal Circuit and Family Court ordered a total of $90,000 to be paid by the Capital City Café-Bar owner and director to a 23-year old casual waitress after findings of unlawful sexual harassment, alongside underpayments and multiple contraventions of the Fair Work Act by the director.
What did the Court find?
In broad terms, the Court found the employee experienced unwelcome conduct of a sexual nature connected with work, and the matter then escalated through follow-up contact after the incident. The Court awarded $50,000 as compensation for the impact of the harassment (hurt, humiliation and distress) and imposed a civil penalty on the director of $9,390 for the breach.
The Court also found a series of other contraventions, including wage underpayments (including issues with casual entitlements), superannuation-related failures, and administrative and record-keeping breaches. The Court ordered the director pay the employee a further $30,610 in relation to these additional breaches, bringing the total to $90,000.
Why this decision matters for Employers
This case reinforces two key points for employers across Australia:
- Sexual harassment is not only a “conduct issue” – it’s a governance and compliance risk. Employers are required by law to take proactive steps to prevent sexual harassment and respond appropriately when issues arise.
- Compliance issues often travel together. When a workplace complaint is raised, it frequently brings broader business practices under scrutiny – particularly payroll processes, record keeping, and award compliance.
The “small stuff” that causes big problems: Fair Work documentation and record-keeping
This case highlights that many businesses underestimate how often they get the basics wrong – and how quickly these issues compound risk during a complaint, audit or Fair Work Ombudsman enquiry. In this case, the Court found failures including:
- Fair Work Information Statement (FWIS) not provided to the employee (required for all new employees).
- Payslips not provided within the required timeframe, and/or payslips not meeting requirements.
- Poor payroll records and failures to keep accurate time and wages records.
- Award and National Employment Standards information not made accessible to employees.
- Reconstructed wage records being provided to the Fair Work Ombudsman (often a sign that records weren’t properly kept at the time).
A key reminder regarding casuals – it’s the CEIS that needs re-issuing:
On top of the FWIS at commencement, casual employees must also receive the Casual Employment Information Statement (CEIS) at set milestones.
Employers should also make sure they’re issuing the current version of the CEIS and keep a simple record of when/how it was provided. For practices, these are common “trip points”- especially where payroll is outsourced, rostering is informal, or managers are making changes without documenting them.
Director and individual liability: a critical reminder
A particularly important feature of this case was that the company operating the café had entered liquidation before the Court finalised the remedy. Despite that, the café owner (as sole director at the time of the contraventions) was found accessorily liable for the company’s breaches.
For business owners and directors, this is a reminder that “the company will wear it” is not a safe assumption – especially where individuals are directly involved in contraventions or failures to meet legal obligations.
What are your obligations?
While the legal framework is multi-layered and can differ by jurisdiction, the practical expectations under workplace laws are consistent: employers must take reasonable steps to prevent, address, and respond to sexual harassment risks in the workplace. At a high level, this means:
- Clear policies and behavioural expectations (sexual harassment, code of conduct, complaints/grievances)
- Training for all employees (ideally with additional, role-specific training for managers/decision makers)
- Safe and accessible reporting options (more than one pathway where possible)
- Prompt, appropriate responses to complaints and concerns (including procedural fairness)
- Strong record keeping and payroll compliance, including:
o issuing compliant payslips on time
o maintaining accurate time and wages records
o providing required Fair Work onboarding documents (including FWIS, and CEIS at the required milestones for casuals)
o ensuring employees can access key workplace information (including relevant award/NES information as applicable)
- Documenting the steps you take, so you can demonstrate prevention and response measures if concerns arise
Queensland reminder: Sexual harassment prevention plans
For Queensland employers, there is an additional layer to be aware of. Queensland WHS laws include specific requirements around managing psychosocial hazards, and sexual harassment and sex or gender-based harassment are treated as workplace health and safety risks. This includes an obligation to implement a sexual harassment prevention plan that meets specific requirement under the Work Health and Safety (Sexual Harassment) Amendment Regulation 2024 (Qld) under the Work Health and Safety Act 2011 (Qld).
How HR in Health can support you
HR in Health can help you take practical, defensible steps to reduce risk and strengthen compliance, including:
- Implementation of the relevant policies and procedures
- Delivery of Respectful Workplace / sexual harassment training for teams and leaders
- Setting up or improving reporting and response pathways
- Supporting Queensland practices with a compliant sexual harassment prevention plan
- Checking your award, wages, records and payroll compliance to reduce broader exposure
We can also assist with compliant investigations when complaints are made.
If you’d like help reviewing your current approach or implementing a stronger prevention framework,
please contact the HR in Health team.