There was a climate of fear at the pentecostal school where children as young as six were sexually abused by a teacher who was later jailed, a national inquiry has heard.

Margaret Furlong, who still teaches at Melbourne’s Northside Christian college, told the child sexual abuse royal commission on Monday she had reported her concerns that another teacher, Kenneth Sandilands, was behaving inappropriately with children.

She then trusted “godly men” to do the right thing.

Furlong, who worked at the primary school from 1987 until 1998, said three children had complained Sandilands was touching them.

One girl, Emma Joy Fretton, wanted to be transferred from his class “because he did bad things” but wasn’t allowed to.

Fretton, now 34, on Friday told the commission Sandilands abused her for three years from 1987, touching her, beating her with a wooden paddle and making her sign obscene stories which he dictated to her.

Furlong said she reported her concerns to the then-principal Neil Rookes, but told the inquiry there was no follow up.

“No one ever spoke to me or I was never asked to write anything down,” she said.

Furlong revealed she had been abused as a child and her abuser was given a suspended sentence and allowed to live two doors down from her home. As a result, she had no faith in the legal system.

“As a result I put my trust in people that I thought would do the right thing - people I classed as godly men to do the right thing,” she told the hearing.

Furlong said neither the victims nor other teachers were supported and there was a “climate of fear” at the school, which was part of the ministry of the pentecostal church where Denis Smith was the senior pastor.

“I was fearful of Pastor Smith,” she said. “From the very first day that I was employed at the college we were told that the college was a ministry arm of the church, and we were under Pastor Smith and under God.”

Furlong cried as she said that in hindsight she should have spoken to the children’s parents.

“The practice I followed in absence of any guidance was to report to the principal,” she said.

Pastor Smith will give evidence later in this round of hearings.

In reply to his counsel, Furlong said she didn’t go to him directly and neither did he bully her about her complaint.

In 2000, Sandilands was sentenced to two years with a non-parole period of 12 months for the indecent assault of boys and girls at the college.

On 10 September 2014 he was jailed for 26 months on a further six counts of indecent assault at St Paul’s Anglican primary school in Frankston, Victoria, where he had worked in the 1970s before he joined Northside.

The ministry of the pentecostal church overseeing the school is now known as Encompass church and is based at Bundoora in the northern suburbs of Melbourne.

The royal commission into institutional responses to child sexual abuse hearing continues in Sydney.