Not Just the Employer: Eklom v Marshall and the Expanding Reach of Workplace Sexual Harassment Laws
Following a significant expansion of liability for workplace sexual harassment under the Fair Work Act 2009 (Cth) (the Act), Eklom v Marshall [2026] FedCFamC2G 772 is among the first decisions to test the new provisions. The Court found that a contractor and a regular customer sexually harassed a site manager in contravention of s 527D of the Act. The decision confirms that the prohibition is not confined to employers, managers or co-workers: a person may be personally liable where the person subjected to the conduct is a worker and the harassment occurs in connection with work.
Samuel Eklom commenced employment as a storage consultant in September 2023. His responsibilities expanded over time, to the point where he effectively became the site manager, responsible for customer service, marketing, banking, operational coordination and maintenance.
Jacob Marshall was both a customer of the storage business and a contractor engaged to undertake cleaning and maintenance. His work regularly brought him to the site managed by Mr Eklom. Troy Mitchell was a regular customer whose dealings with the business made him a consistent presence at the workplace. From late 2024 or early 2025, Mr Marshall repeatedly directed homophobic and sexualised remarks at Mr Eklom. The conduct included derogatory labels, comments that gave ordinary workplace tasks a sexual meaning, and unwanted physical contact, including shoving and bumping. Mr Eklom observed that Mr Marshall’s behaviour escalated when Mr Eklom and Mr Marshall’s supervisor was present.
As Mr Marshall and Mr Mitchell interacted more frequently on site, they became friendly. Around January 2025, Mr Mitchell began making comments of a similar character. Their exchanges included degrading jokes and references to sexual or fetish activity.
Mr Eklom ultimately made a formal complaint to the business and provided a recording of exchanges in support of it. After a period of personal leave, Mr Eklom was later dismissed. The proceeding considered the respondents’ ongoing harassment, and not whether the employer’s response or dismissal was independently unlawful.
Section 527D of the Act prohibits a person from sexually harassing a worker where the harassment occurs in connection with the employee’s work. Mr Eklom sought compensation and the imposition of pecuniary penalties for the alleged contraventions of the Act. The central issue in this matter was whether the provision applied to individuals connected with the workplace who were neither Mr Eklom’s employer nor his colleagues.
In March 2026, Judge Vasta found that both Mr Marshall and Mr Mitchell contravened s 527D of the Act. The language of the provision focuses on the status of the person subjected to the conduct and the connection between the harassment and work. Therefore, the provision does not require the harasser to hold a particular employment relationship with the employee.
His Honour illustrated the breadth of the provision by referring to a restaurant patron who sexually harasses a waitress. The waitress is protected because she is an employee and the harassment occurs in connection with her work, even though the patron is not employed by the restaurant. On the same reasoning, the respondents’ respective status as contractor and customer did not place their conduct beyond the reach of the Act.
The Court’s approach is particularly important for customer-facing and contractor-heavy workplaces. The relevant questions are whether the person subjected to the conduct was a worker and whether the harassment occurred in connection with that person’s work. Here, the conduct occurred at the site, arose from the respondents’ regular access to the workplace and targeted Mr Eklom while he performed his duties. The required connection with work was therefore established.
The Court awarded Mr Eklom $90,000 in compensation for loss suffered as a result of the harassment, where the evidence included a diagnosed depressive disorder that was causally linked to the respondents’ conduct. The award reflected both the seriousness of the conduct and its personal impact on Mr Eklom.
The Court did not, however, award compensation for past or future economic loss arising from Mr Eklom’s dismissal. Under s 545(2)(b) of the Act, compensation must address loss suffered because of the contravention. The loss of employment resulted from a separate decision by the employer, rather than directly from the respondents’ harassment. The judgment therefore draws a clear distinction between establishing a contravention and proving that each claimed loss was caused by that contravention.
Each respondent was also ordered to pay a $13,000 pecuniary penalty, bringing the total amount ordered to $116,000 in compensation and penalties. In fixing the penalties, the Court emphasised deterrence and characterised the conduct as a very serious example of workplace sexual harassment. The penalties were imposed personally, underscoring that third parties cannot assume legal exposure rests only with the business that employs the affected worker.
Eklom v Marshall demonstrates that workplace sexual harassment risk extends beyond the traditional employment hierarchy. Customers, contractors, subcontractors, suppliers and visitors may fall within the reach of s 527D when their conduct relates to an employee’s work. This is particularly significant in sectors where third parties attend sites frequently, work alongside employees or exercise informal influence over day-to-day operations.
The decision also provides a practical reminder that describing conduct as humour or banter does not determine its legal character. Repeated sexualised or homophobic remarks, or unwanted physical conduct in a workplace context, may support a finding of unlawful harassment. Therefore, employers should remain alert to conduct that becomes normalised because the perpetrator is a longstanding customer, a familiar contractor or commercially important to the business.
Although the respondents were personally liable, the case has broader implications for employers. The judgment did not determine a claim against the employer, but it illustrates the foreseeable psychosocial risks created by third-party interactions. Meaning that employers and persons conducting a business or undertaking should address those risks as part of their broader obligations to provide a safe working environment, take complaints seriously and prevent unlawful workplace conduct.
For strategic advice on workplace sexual harassment, third-party conduct and managing employer risk, contact our Senior Associate Antonia Tahhan on 1300 676 823.