Harassment beyond the boss: Eklom v Marshall [2026] FedCFamC2G 772

Eklom v Marshall extends s 527D of the Fair Work Act beyond the employment relationship, finding a contractor and a customer personally liable for sexually harassing a worker neither of them employed. Judge Vasta ordered $90,000 in compensation and $26,000 in combined penalties, confirming that anyone connected to a workplace — not just the boss — can be held to account under the new prohibition.

Case note: Samuel Eklom v Jacob Marshall & Anor [2026] FedCFamC2G 772

Jurisdiction: Federal Circuit and Family Court of Australia (Division 2)

Decision-maker: Judge Vasta

Date: 31 March 2026

Quick takeaways

• Eklom v Marshall confirms s 527D of the Fair Work Act 2009 (Cth) protects workers from sexual harassment by anyone connected to the workplace, not just their employer.

• A contractor and the business's biggest customer were both found personally liable and ordered to pay compensation and penalties.

• The applicant recovered $90,000 in compensation, supported by a diagnosed depressive disorder linked to the harassment.

• Compensation under s 545(2)(b) is confined to loss caused by the harassment — it does not extend to separate conduct, such as the applicant's later dismissal by his employer.

• Each harasser was penalised $13,000, with the Court awarding more than the applicant sought because a lower penalty would not achieve adequate deterrence.

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Introduction

Most people think of workplace sexual harassment as something a boss does to a subordinate. Section 527D of the Fair Work Act 2009 (Cth) is deliberately wider than that. It prohibits a first person from sexually harassing a second person who is a worker — and it says nothing about the first person needing to be the worker's employer.

Eklom v Marshall is among the first decisions to apply s 527D, and the first to test that breadth. The harassers were not the applicant's employer. One was a contractor who, in part, answered to the applicant; the other was the business's biggest customer. Both were found to have contravened s 527D, and both were ordered to pay.

So, what does this mean for everyday practice?

Why this case matters

This decision matters for several reasons:

• it confirms that the first person under s 527D can be anyone connected to the workplace — including a contractor, a customer or a visitor — and not just the employer or a co-worker;

• it produced a substantial award of $90,000 in compensation, supported by medical evidence of a diagnosed psychological condition — a useful point of contrast with cases where the medical evidence is thinner;

• it clarifies that compensation under s 545(2)(b) is confined to the loss caused by the contravention, and does not extend to economic loss flowing from separate conduct by the employer; and

• it shows how pecuniary penalties will be approached under the new provision, with deterrence as the governing object, even where the harassers held no position of authority over the worker.

It is best read alongside its companion decision, Mejia v Capital City Cafe-Bar [2026] FedCFamC2G 468, handed down five days earlier, which was the first published decision on s 527D and dealt with a single incident by an employer in a position of authority. Where Mejia establishes the floor — a single incident, limited medical evidence, a substantial award — Eklom shows the provision reaching outward to people the worker does not work for.

Who is the "first person"? The reach of s 527D

The most important point in Eklom is conceptual. The Court emphasised that it does not matter who the first person is, so long as the second person is a worker and the harassment occurs in connection with their being a worker. The Court gave the example of a patron at a restaurant who sexually harasses a waitress: the waitress, as a worker, is protected, because the harassment is connected to her work — regardless of the fact that the patron is a customer rather than her employer.

That reading reflects how the provision was designed. The protected class is defined by reference to the worker, and the definition of "worker" is drawn from the work health and safety framework, which captures contractors, employees, volunteers and others. The duty not to harass is imposed on everyone; the protection attaches to the worker.

On the facts, the second respondent, Jacob Marshall, was the business's first customer and was later engaged as a contractor to assist with cleaning and maintenance across the company's sites, including the site the applicant managed. The third respondent, Troy Mitchell, was a regular customer — in effect the biggest customer at that site — who became a consistent feature of the workplace. Neither was the applicant's employer. Both were nonetheless within s 527D.

Key facts

The applicant began as a storage consultant in September 2023 and his role expanded until he was effectively the site manager, responsible for day-to-day operations including customer service, marketing, banking and maintenance co-ordination.

From late 2024 or early 2025, on the applicant's evidence, the contractor began targeting him with homophobic and sexualised comments, and engaged in unwanted physical contact that was brushed off as joking. When a regular customer joined in, the conduct escalated into what the Court described as almost a game between the two of them, with the applicant made the butt of the joke on the basis of an orientation they ascribed to him. The comments became progressively cruder and more degrading over the following months, and included references framed around sexual assault.

The Court made the point — squarely and more than once — that the applicant's actual sexual orientation was irrelevant. What mattered was that he was harassed, and that he suffered because of it, in connection with his work.

The applicant eventually complained. He said his complaints were not listened to; when he produced a recording of the exchanges, he was told he had breached privacy legislation. He was later dismissed after taking personal leave.

The orders

The applicant had originally sued his employer as well, but discontinued against the company once its defence showed that the second and third respondents were never employees. The two individual respondents did not engage in the proceeding at all and were in default. Declarations were made that each had contravened s 527D by sexually harassing the applicant.

On compensation and penalties, the Court ordered:

• $90,000 compensation, for which the second and third respondents were jointly and severally liable, under s 545(2)(b);

• a $13,000 pecuniary penalty against the second respondent; and

• a $13,000 pecuniary penalty against the third respondent.

The compensation and penalties were payable within 60 days, and the penalties were ordered to be paid to the applicant. The Court declined to award aggravated damages and declined to make any order for costs.

Compensation: confined to the loss caused by the contravention

Eklom contains an important limiting principle that practitioners should not overlook.

Compensation under s 545(2)(b) is for loss suffered because of the contravention. The Court held that it could not award past or future economic loss, because that loss flowed from the conduct of the applicant's employer — his treatment after he complained, and his dismissal — and not from the harassment that was the subject of the declarations. The harassers were liable for the harm their harassment caused; they were not liable for what the employer separately did. In reaching that view the Court applied the approach taken in Han v St Basil's Homes (No 2) [2025] FCA 448 and in its own earlier decision in Barlow v St Vincent de Paul Society Queensland (No 2) [2026] FedCFamC2G 329.

The practical consequence is a causation discipline. A worker harassed by a contractor or customer can recover for the hurt, distress and psychological harm caused by that harassment — but loss attributable to a different wrong, by a different party (typically the employer), must be pursued against that party, on its own footing.

The role of medical evidence

The applicant put before the Court a medical certificate and a Centrelink certificate from his general practitioner, who had diagnosed anxiety, stress and a depressive disorder with an onset date that corresponded to the period of harassment. The Court accepted that the depressive disorder originated from the harassment and continued to affect him, and described the effects he reported — isolation, degradation, the sense of always being outnumbered — as harrowing.

Read against Mejia, the comparison is instructive. In Mejia, the evidence of loss was limited — a single GP visit, no psychological treatment — and the agreed award was $50,000. In Eklom, there was a diagnosed and continuing condition tied to the contravention, and the award was $90,000.

The two cases should not be treated as a tariff, and they differ in several material respects beyond the medical evidence: Mejia concerned a single incident by an employer in a position of authority and was resolved by consent, whereas Eklom involved sustained conduct by two harassers, was determined in default, and made the respondents jointly and severally liable. With those differences acknowledged, the cases read together support a straightforward proposition: while a diagnosis is not required to recover general damages (as Mejia shows), cogent medical evidence of a recognised condition caused by the harassment supports a larger award.

Pecuniary penalties and deterrence

On penalties, the Court applied the orthodox principles from the High Court in Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union [2018] HCA 3 and Australian Building and Construction Commissioner v Pattinson [2022] HCA 13: the principal object is deterrence, both specific and general, and an appropriate penalty strikes a reasonable balance between oppressive severity and the need for deterrence.

The maximum penalty for each respondent was $18,780. The Court treated the absence of a superior–subordinate relationship as the principal mitigating feature, and it mitigated the penalty in a fairly significant way — but it did not excuse the conduct, which the Court regarded as a serious example of harassment at work that had to be met with a penalty of real sting. There was no evidence of remorse or other matters capable of further moderating the penalty. Notably, the Court imposed a penalty higher than the applicant had contended for, on the basis that a lower figure would not achieve the necessary level of deterrence.

Implications for practice

The defendant pool is wider than the employer

The headline practice point is reach. A worker is not confined to suing their employer. Contractors, customers, clients and other visitors to a worksite can be respondents in their own right under s 527D. For workers harassed by someone other than their employer — a situation that previously sat awkwardly within employment-based remedies — this is a direct avenue against the actual wrongdoer.

Plead causation with care

Because compensation is confined to loss caused by the contravention, the loss attributable to the harassment must be separated from loss attributable to any separate conduct by the employer. Where both are in play, advisers should consider whether the employer needs to be a party on a distinct basis, rather than expecting harassers to answer for the employer's conduct.

Build the medical and lay evidence

Mejia shows a diagnosis is not essential; Eklom shows it matters to quantum. The two together suggest a clear approach: gather contemporaneous medical evidence linking a diagnosed condition to the harassment where it exists, and supplement it with lay evidence of the lived impact. The strength of that evidence is reflected in the size of the award.

Default is not a discount

The respondents in Eklom did not engage at all, yet that did not soften the outcome — it produced a substantial award and penalties above the figure sought. Non-engagement left the applicant to prove his case, which he did. Practitioners advising respondents should not assume that staying silent reduces exposure; it forfeits the opportunity to put forward the very matters — remorse, circumstances, financial capacity — that can moderate compensation and penalty.

Concluding thoughts

Eklom answers a question the text of s 527D always implied but had not yet been tested in court: the prohibition is not about employers, it is about workers. Anyone connected to a workplace who sexually harasses a worker can be called to account, and the contractor and the customer are no exception.

Read with Mejia, the shape of the new jurisdiction is coming into focus. A single incident can contravene the section. A worker need not produce a diagnosis to be compensated — but where the medical evidence is there, the award is larger. The harassers answer for the harm they cause, and no one needs to be the boss to be liable. For a regime built on the Respect@Work reforms, that is the point.

Related reading: The first decision on workplace sexual harassment under the Fair Work Act: Mejia v Capital City Cafe-Bar [2026] FedCFamC2G 468