In this Justitia communication, we continue our round-up of recent cases, sharing key developments and cautionary lessons to help your organisation navigate staffing matters with clarity and confidence. Today we highlight two recent decisions which consider an employer’s exposure to liability for misconduct.
The first involves a small family-owned restaurant business, and an owner who sexually harassed and assaulted a waitress. The second involves one of the Big Four accounting firms and the termination of a senior partner. Together, they are a useful reminder that workplace conduct issues, and the associated legal and reputational risks, are relevant to all employers, regardless of size or sector.
In the first case, damages of $150,000 were awarded for sexual harassment.
The Queensland Industrial Relations Commission has awarded a waitress $140,000 in general damages for sexual harassment, $10,000 in aggravated damages and $26,434 in costs after finding that she was sexually harassed by the owner of the restaurant where she worked.
On the day of the incident, the owner of the restaurant asked her to stay for a drink between shifts, then propositioned her for sex, which she refused. At the end of her shift, the owner committed further acts of sexual harassment including serious physical conduct. When the waitress tried to leave, she discovered the owner had locked the doors. The owner was subsequently charged with several criminal offences and pleaded guilty to one count of sexual assault. The waitress was diagnosed with post-traumatic stress disorder, anxiety and depression.
The Commission made a finding of sexual harassment, describing the conduct as predatory and as a serious and gross violation of the waitress’ right to be free from sexual harassment. It found that the fact the perpetrator was the waitress’ employer indicated a distinct power imbalance arising from the employment relationship. The owner’s decision to lock the doors prior to the conduct warranted an additional award of aggravated damages.
Key takeaways:
- Courts and tribunals continue to award significant damages in serious sexual harassment cases, particularly where the conduct is egregious and the impact on the complainant is lasting.
- Employers have a positive duty to take proactive, reasonable and proportionate measures to prevent sexual harassment. This goes beyond having a policy – it means thinking carefully about risk factors and putting practical controls in place to prevent unlawful conduct. This applies to all businesses, regardless of size. Clear policies, accessible reporting channels and training are expected across the board.
Case: JF v Oishi Teppanyaki & Café Pty Ltd & Anor [2025] QIRC 209
In the second case, an incident in a bar resulted in the termination of an EY senior partner.
The Supreme Court of the Australian Capital Territory has dismissed proceedings brought by a former senior partner of Ernst & Young (EY) who challenged the termination of his partnership interest.
The partner was involved in a physical altercation with the manager of a bar in Sydney following a dispute about a missing jacket. He was charged with common assault but did not disclose the charge to EY. His interest in the partnership was terminated for “just cause” with immediate effect. Prior to this, the partner had previously received a first and final warning in relation to alleged inappropriate behaviour towards another partner at a work party.
The partner brought proceedings claiming that the decision to terminate involved breaches of the partnership agreement. He argued, among other things, that the incident did not involve conduct as a partner of the firm but instead occurred in his private life. The Court rejected his arguments, finding that the definition of “just cause” in the partnership agreement was not confined to conduct as a partner and clearly extended to private conduct. The claims were dismissed and the partner was ordered to pay EY’s costs.
Key takeaways:
- Well-drafted misconduct and termination provisions – whether in a partnership agreement, executive contract or employment agreement – can extend to conduct outside work, where that conduct is capable of harming the organisation’s interests.
- A prior warning can strengthen an organisation’s position when responding to a further incident. Where conduct issues arise, taking documented, proportionate disciplinary action at the time preserves options later down the track.