A prostitute has won a landmark sexual harassment case against a Wellington brothel owner.

In what is understood to be a world first, the Human Rights Review Tribunal awarded the young woman $25,000 in damages for emotional harm as a result of sexual harassment.

Aaron Montgomery, who no longer owns The Kensington Inn in Victoria St, was described as a bully who enjoyed controlling and humiliating women and tried to pressure workers into having sex with him.

Over a three-month period, the older man belittled and frightened the 22-year-old woman until she felt unsafe and on edge, became depressed and turned to alcohol, the tribunal's decision said.

His overtures included telling her he could do what he liked with the girls who worked for him, and threatening to take her out of her comfort zone.

He told her weekends were his play time, that he took other workers out the back for sex and that most girls would do anything for him.

The tribunal ruled it was unacceptable for an employer to use sexual language in a way that was offensive to the employee in any workplace.

"Context is everything. Even in a brothel, language with a sexual dimension can be used inappropriately in suggestive, oppressive, or abusive circumstances," the findings said.

"Sex workers are as much entitled to protection from sexual harassment as those working in other occupations. The fact that a person is a sex worker is not a licence for sexual harassment - especially by the manager or employer at the brothel."

Mr Montgomery did not return calls yesterday.

New Zealand Prostitutes Collective national co-ordinator Catherine Healy said the decision showed New Zealand was a world leader in sex workers' human rights, thanks to the Prostitution Reform Act 2003.

"It's one up for decriminalisation, it's a significant ruling because it could never have happened when sex work was illegal. It indicates the massive change [the industry] has gone through."

Ms Healy was in contact with all brothel owners in Wellington apart from Mr Montgomery.

The young woman had come to her, distressed and upset, before quitting her job because of the harassment in June 2010.

The findings describe how Mr Montgomery contrived to get the woman alone, where he asked questions about her genital grooming and sexual preferences.

She became so depressed and upset in the demeaning and hostile work environment her regular clients became worried about her.

Another former employee told the tribunal he was "really sleazy" and would pick off vulnerable employees to have sex with him.

While Mr Montgomery denied asking some of the questions and said others were for business reasons, the tribunal disagreed, saying he had a "misplaced confidence in his abilities as a man of the world".

Mr Montgomery did not have to ask her questions multiple times or in a suggestive manner.

Sex-related information had been gathered when she got the job, and was kept on a card at reception.

The Kensington is under new ownership.

Employment lawyer Susan Hornsby-Geluk said the $25,000 in damages was "right at the top end of the scale" for decisions made in either the Human Rights Tribunal or the Employment Relations Authority.

"It's great someone has taken this case and it has had a positive outcome, as that will raise expectations in that industry."