A recent decision of the Federal Circuit and Family Court of Australia has reinforced an important message for employers: workplace sexual harassment obligations extend well beyond relationships between employers and employees.
In Eklom v Marshall [2026] FedCFamC2G 772, the Court found that both a contractor and a customer were liable for sexually harassing a worker under the Fair Work Act 2009 (Cth). The decision is one of the first significant applications of the sexual harassment provisions introduced in 2023 and demonstrates that liability can arise wherever inappropriate conduct occurs in connection with work, regardless of whether the individuals involved are employees.
The case involved a site manager who was subjected to ongoing sexualised and homophobic comments by a contractor and a regular customer. The Court accepted that the conduct caused significant psychological harm and reinforced that workplace protections are designed to apply broadly across modern working environments.
Why this matters for employers
While the employer in this case was not ultimately found liable, the judgment sends a clear warning that organisations cannot limit their risk management efforts to employee behaviour alone. Businesses with customer-facing operations or frequent interactions with contractors, suppliers, or visitors should regard third-party conduct as a workplace health and safety and compliance issue.
Employers should review whether they:
- Have workplace policies that clearly apply to contractors, clients, customers, suppliers, and other third parties.
- Provide managers and employees with training on recognising and responding to harassment by external parties.
- Maintain clear reporting and investigation processes for complaints involving non-employees.
- Act promptly to protect workers, including restricting access or ending business relationships where necessary.
- Include behavioural expectations and enforcement provisions within contractor and supplier agreements.
The key takeaway
The decision highlights that creating a safe workplace requires more than managing employee conduct. Organisations must proactively address risks arising from every work-connected interaction. Effective policies, practical training, clear reporting pathways, and decisive action when concerns arise will be critical in meeting legal obligations and protecting workers.
Citation
Eklom v Marshall [2026] FedCFamC2G 772
*This article is intended to provide general information only and should not be relied upon as legal advice. Specific advice should be obtained for individual circumstances.*
