Embedded within the employer-related responsibilities are inherent responsibilities to abide by the Fair Work Act 2009 (Cth) and the Sex Discrimination Act 1984 (Cth), which include the Respect@Work reforms.

These legislative developments impart a positive duty on employers to take “reasonable and proportionate measures” to prevent sexual harassment before it happens. Therefore, it isn’t about steps taken to respond to a complaint, but rather proactively ensuring your staff are not subjected to sexual harassment as they walk in the door.

In industries with high staff turnover, young workers, or seasonal employees, the risks multiply: inconsistent onboarding, limited supervision and irregular training can foment poor workplace behaviours which lead to legal and reputational damage.

Risk of Non-Compliance – The Mad Mex Wake-Up Call

A recent Federal Court decision Magar v Khan [2025] FCA 874 is a cautionary tale for every franchisee. Over a two-year period, a young female employee at a Mad Mex store endured repeated sexual harassment and victimisation by her manager – including exposure to pornography, sexualised “jokes,” and suggestive comments. When she lodged a complaint, she was threatened with legal action.

In response, the Court awarded the young employee record $305,000 in damages – including $160,000 for general harm – finding that the franchisee’s breached the positive duty, normalised a culture of sexist behaviour, and allowed victimisation to occur.

For the franchisee, the findings resulted in company collapse and voluntary liquidation.

Training: Beyond a Compliance Box-Tick

Courts increasingly assess workplace culture when assessing harassment claims – including the presence of power imbalances and gender demographics. Regular, targeted training to address behaviours isn’t just about satisfying legal requirements – it’s one of the strongest preventative shields against claims like this and can lead to the following outcomes:

– Reinforce awareness of legal obligations and employee responsibilities.

– Equip staff how to report unacceptable behaviour early.

– Shift culture toward respect and inclusion, reducing systemic risk.

– Demonstrate to a court or tribunal that you took “reasonable and proportionate measures” were taken to prevent harm.

In a franchise network, aligning training across all outlets also protects the brand as a whole – and that benefits both the franchisor and every franchisee in the network.

Key Takeaway

Non-compliance isn’t just a legal exposure — it’s a business risk with potentially catastrophic financial and reputational consequences. Organisations will be faced with the question whether to treat compliance as a burden – or turn it into a competitive advantage.

If you would like to speak to one of our consultants about how we can design specific coaching or organisation-wide support services mentioned above, please get in touch.

Mark Lew
Senior Consultant
Azuhr
[email protected]