You’re running a small business. You wear many hats — managing staff, customers, cash flow, compliance. Then one day, an employee walks in and says they’ve been sexually harassed at work.
It’s uncomfortable. It might even feel like an overreaction. You trust your team. Maybe they were joking around. Maybe it’s just a misunderstanding. But here’s the reality: if you don’t act — and act properly — your business is exposed to serious legal and financial risk.
I’ve seen small businesses dragged into legal disputes, compensation claims, and media exposure simply because they didn’t know what to do — or ignored a complaint they thought wasn’t “that serious.”
Case Study: The Café That Didn’t Act
A small hospitality client contacted me — too late.
One of their baristas had made multiple verbal complaints to a supervisor about a co-worker making suggestive comments and brushing against her behind the counter. The manager told her, “He’s just joking, don’t take it personally.” No record was made. No steps were taken.
Three months later, the employee went to a lawyer — and lodged a complaint with the AHRC (Australian Human Rights Commission). The business owner received a legal letter and ended up in mediation.
What followed:
- A $35,000 settlement
- Legal fees in the thousands
- An anonymous online review exposing the incident
- The business owner’s franchise agreement reviewed for non-compliance
It all could have been avoided with a basic understanding of their obligations — and a timely, respectful response.
Why You Must Take Every Complaint Seriously
Even if you’re a small team. Even if the person accused is a friend. Even if no one else has ever complained.
Here’s what’s at stake if you ignore or mishandle a sexual harassment complaint:
Legal Exposure
- Under Australian law, you can be vicariously liable for the actions of your staff if you don’t take “reasonable steps” to prevent and respond to sexual harassment.
- Claims can be made under the Sex Discrimination Act 1984 and referred to the Fair Work Commission or Federal Court.
Financial Risk
- Compensation payouts, legal fees, and reputational damage can be devastating for small businesses.
- Some insurers may not cover you if you didn’t follow proper process.
Operational Disruption
- Morale can plummet.
- Staff may resign or lodge related complaints (like bullying or victimisation).
- Your team may lose trust in you.
Reputational Damage
- Negative online reviews or public exposure can follow you — and affect your ability to hire, partner, or grow your business.
What You Should Do Immediately
If you receive a complaint about sexual harassment:
- Stop and listen. Take it seriously. Don’t dismiss or minimise the claim.
- Document it. Record what was said, when, and by whom.
- Seek expert advice. Engage an independent HR consultant or workplace investigator (especially if you’re unsure how to proceed).
- Start a fair process. You don’t have to jump to conclusions — but you do have to respond. That may include a preliminary inquiry or a formal investigation.
- Protect both parties. Make temporary changes if necessary (e.g. adjusting rosters or shifts) to avoid further issues while you investigate.
- Avoid retaliation. Never punish or isolate the person who made the complaint — this is unlawful.
How to Protect Your Business Long-Term
✅ Have a policy. Even a simple 2-page document on respectful behaviour and harassment can be a lifesaver.
✅ Train your staff. Make sure employees and managers know the rules.
✅ Act consistently. You don’t need to overreact — just respond professionally, every time.
✅ Engage help when needed. There’s no shame in not knowing what to do. There’s serious risk in pretending you do.
Final Thought: You’re Responsible, Whether You Knew or Not
If harassment happens in your business, and you didn’t take reasonable steps to prevent it — you are legally responsible. But the good news? With the right response, you can protect your people, your culture, and your company.
Need Help Handling a Complaint?
If you’re unsure what to do next, I can help.
I support small business owners across Australia to manage employee complaints, set up basic HR processes, and handle investigations with care and compliance.
For a complimentary workplace investigations procedural fairness consultancy discussion, contact David directly.
David Haydon
Workplace Investigations Consultant
Call 0409 400 118
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Disclaimer – This blog is for general information only and does not constitute legal advice. For guidance tailored to your business, speak with a qualified workplace specialist.