Department store giant David Jones has described parts of the s-xual harassment claims levelled against it by former publicist Kristy Fraser-Kirk as “unfounded and highly exaggerated” and says it is prepared to fight the allegations in court if a settlement with Fraser-Kirk cannot be reached.

In an explosive start to Fraser-Kirk’s s-xual harassment case against David Jones and former chief executive Mark McInnes, her legal team told the Federal Court in Sydney yesterday that six more female David Jones staff had made s-xual harassment allegations against McInnes, who resigned in June after two incidents with Fraser-Kirk.

Fraser-Kirk’s lawyer, Rachel Francois, told the court a further two women would claim they had been harassed by McInnes while he was employed at another company, and another three David Jones staff would allege that they had been harassed by other David Jones executives.

David Jones have disputed the claims, as has McInnes, who said yesterday he would “respond in the courtroom”.

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But whether it gets that far remains unlikely.

Workplace law expert Peter Vitale says the sheer amount of publicity generated by yesterday’s Federal Court directions hearing in Sydney means David Jones would still be keen for a settlement.

“I think they definitely want to settle, that would be my view still. The difficulty they face is the inherently adverse consequences of running this through the court and all the adverse exposure that bring,” he said this morning.

“Yesterday we saw the publicity around a simple directions hearing. Imaging what a trial is going to be like. For a brand company like David Jones, they really don’t want to be going to trial. Mr McInnes may have his own ideas.”

In a statement released last night, David Jones said it was prepared to reach a “fair and reasonable” settlement with Fraser-Kirk, but also questioned the fresh claims against the company and McInnes.

David Jones says it has had an anonymous complaints hotline operating since 2005, and none of these claims have been raised in that forum.

“Even though we have this system in place, none of the new allegations appear to have been raised directly with David Jones or to our hotline. This causes us to question today’s claims, given they are being made as part of a $37 million claim.

“We remain committed to reaching a fair and reasonable resolution of this matter, however we will not respond to threats of adverse publicity to pay those elements of Ms Fraser-Kirk’s claim that are both unfounded and highly exaggerated.”

McInnes said “the new allegations are unstated, unsourced and unsubstantiated”.

“I have already said that many of the existing claims made by Ms Fraser-Kirk are simply untrue. I am keen to file my statement of defence against these claims, which as directed by the court will occur on September 24.”

Fraser-Kirk’s legal team was given until September 10 to amend her legal claim. David Jones says it is waiting for more details from Fraser-Kirk’s team on its original statement of claim before filing its defence. These further details are due on September 20.

The matter will return to court on October 11. Justice Geoffrey Flick has indicated he wants to resolve the matter before the end of the year.

Vitale says another issue that may push David Jones towards a settlement is the Fair Work industrial relations regime, under which adverse action lodged by an employee against an employer carry a reverse onus of proof – that is, David Jones would have to prove the conduct did not occur.

Vitale says if Fraser-Kirk’s legal team use this adverse action strategy, David Jones would have a tougher case to make.

“That’s another consideration that points to towards a preference to settle, rather than go on.”

This story originally appeared in SmartCompany.