Stephen Davies, 39, is alleged to have kissed and petted the woman within hours of dropping his trousers in front of dozens of CSA officials who challenged him over the size of his penis.
On the seventh day of an industrial tribunal in Birmingham that has been hearing increasingly bizarre claims about behaviour within the CSA, the colleague - known only as Miss E - described the petting incident after the party in 1993.
'We had been kissing at the party and also when we got back to my house,' Miss E said. 'He was touching parts of my body.' Asked which parts by Alastair Smail, counsel for the CSA, she replied: 'Mainly my breasts.'
Mr Davies, formerly operations project manager at the CSA's West Midlands headquarters near Dudley, had told the hearing earlier that he and Miss E had no more than a goodnight kiss.
He is claiming he was sexually discriminated against by the CSA because one of its executive officers - known as Mrs A - sexually harassed him. He claims she invited him for sex while on business trips, commented on the size of his penis, bought him skimpy briefs and ultimately reported him for sexual harassment because he would not sleep with her. He was cleared but was dismissed in March on charges of management harassment against two other women.
Miss E said that during the party Mr Davies had asked her to kiss him in front of a woman he believed 'fancied him' because he wanted to put her off. She said she had refused.
Miss E also told the panel of two men and a woman that Mr Davies later dropped his trousers to mid-thigh level when a woman at the party asked if it was true that he had the biggest penis in the CSA. But she did not see if he took his underpants down.
Witnesses at the hearing have alleged that Mr Davies was having an affair with a colleague, Miss D, and that he made plays for two other CSA officials, Miss B and Mrs C. He has denied the allegations, although he has admitted having affairs and dropping his trousers. The hearing was also told that Mrs A's husband claimed to be having an affair with Mrs C.
Timothy Crumpton, branch secretary of the civil servants' union NUCPS, said that Mr Davies had admitted to him that he had been a 'bully', but not to sexual harassment. Mr Davies denied he had admitted anything.
The hearing continues.