Employers can often find themselves in murky waters when an employee raises allegations of serious wrongdoing on the part of the company. Here, we unpack the key issues employers need to consider, and examine a recent case that sheds light on the complex realities of managing whistleblower allegations in the workplace.
Whistleblowers in both the private and public sector are protected by laws that aim to shield them from harm, detriment, or threatened detriment because they’ve raised concerns about serious wrongdoing.
If someone tries to harm or disadvantage a whistleblower because of what they’ve reported, it can lead to serious consequences for both the individual responsible and the business involved.
While the intention of whistleblowing regimes is to encourage reports of suspected corporate wrongdoing, and protect both the identity and mistreatment of disclosers, how far those protections extend is an important consideration for employers when these issues come to light during the course of a disciplinary process.
Each state and territory in Australia has its own legislation governing public interest disclosures. While there are some variations between the public and private sector whistleblower regimes, the protections afforded to whistleblowers relating to detrimental conduct or detrimental action are broadly similar, with a few specific variations. Below we break down what you need to know for both the public and private sectors.
Whistleblowers in the private sector
Part 9.4AAA of the Corporations Act 2001 (Cth) (‘Corporations Act’) governs the whistleblower protections in the private sector relating to ‘misconduct’, which is broadly defined to include fraud, negligence, default, breach of trust and breach of duty or an improper state of affairs (which is not defined).
Assuming the eligibility of the whistleblower and the disclosure in question meets the relevant thresholds to qualify for protection under the Corporations Act, the whistleblower would be protected from a range of detrimental conduct (or victimisation and retaliation) when a qualifying disclosure is believed or suspected to have been made, may be made, is proposed to be made, or could be made – and that belief or suspicion is the reason or part of the reason for the detrimental conduct.1
The protection extends to a threat to cause detrimental conduct. A breach of these provisions can amount to a criminal offence and can give rise to a civil penalty for those found to have engaged in the detrimental conduct, officers and employees as accessories to the contravening conduct of a body corporate, or other persons involved as accessories.
Whistleblowers in the NSW public sector
In New South Wales, the Protected Interest Disclosure Act 2022 (NSW) (PID Act) prescribes the relevant protections provided to disclosers of ‘serious wrongdoing’ in the public sector. The expanded definition of serious wrongdoing captures corrupt conduct, serious maladministration, government information contraventions, privacy contraventions, local government pecuniary interest contraventions, and serious and substantial waste of public money.2 Similar to the private sector, disclosures relating to employee grievances and the taking of reasonable management action are expressly excluded from coverage3.
It is an offence under the PID Act if a person takes ‘detrimental action’ against another person at the time when the person (the putative offender) suspected, believed or was aware that the other person (the putative whistleblower) had made, may make, or proposes to make a public interest disclosure (PID) and that suspicion, belief or awareness contributed to the taking of the detrimental action4. Contravening the detrimental action provisions can result in civil remedies and can also give rise to exposure to criminal liability.
The wide remit of ‘detriment’ and the reverse onus of proof
Detrimental conduct or detrimental action is broadly defined to ‘capture any disadvantage’5 and generally extends to (without limitation) injury in employment, prejudice or adverse treatment, disciplinary proceedings or disciplinary action, dismissal or damage to a person’s business or financial position.
Akin to the general protections provisions under the Fair Work Act 2009 (Cth), a reverse onus of proof applies in respect of the elements of a determinantal action offence so that the legal burden shifts from the alleged victim to the alleged wrongdoer6.
This means that an employer would have the onus of proving that it did not have the relevant suspicion, belief or awareness of a qualifying or protected disclosure being made (or that a person may make or proposed to make a protected disclosure) at the time the detrimental action was taken, and that any such suspicion, belief or awareness was not a contributing factor or the reason for the taking of disciplinary action.
No requirement for a disclosure to have been made
The relevant offence in question does not require that a protected disclosure has actually been made or that the alleged offender has actual knowledge of a disclosure. Just the mere belief or suspicion that a whistleblower proposes to make, or could make a protected disclosure is sufficient to trigger the relevant protection.
The evidentiary burden of the mental element
In taking any disciplinary action, the evidence of the relevant decision makers as to their state of mind will become fundamental to this assessment. What can often become a more cumbersome evidentiary burden in relation to the alleged state of mind, is addressing an allegation of the existence of a ‘suspicion’ or ‘belief’ on the part of the decision-maker which led to or was at least one of the reasons for the taking of the alleged detrimental action.
A belief is a more rigorous mental state of being than a suspicion. Suspicion rather is a ‘state of conjecture or surmise where proof is lacking’7. A decision maker would need to evidence that they did not hold an inclination towards the proposition that the relevant employee in question had made, may have made, may make or proposed to make a qualifying disclosure.
Discharging this burden therefore requires evidence that any disciplinary action or termination did not include a belief or suspicion that the employee had made, may make or proposed to make a protected disclosure.
Removing the connection between the belief and the detrimental action taken
Where an employer (or the relevant decision maker in question) fails to establish that they did not hold the requisite suspicion, belief or awareness of a protected disclosure, they would then need to show that any detrimental action taken against the employee was not carried out because of that belief or that the belief, suspicion or awareness of a protected disclosure was not a contributing factor to the taking of the detrimental action. In other words, consideration would be given to the motivations of the decision maker in implementing any disciplinary action against the employee.
Whistleblowing in action – Mount v Dover Castle Metals Pty Ltd [2025] FCA 101
A recent example of how courts may interpret termination decisions in the context of a whistleblower report is the case of Mount v Dover Castle Metals Pty Ltd [2025] FCA 101 (Mount). Ryan Mount, the then acting CEO of Dover Castle Metals Ltd (DCM), made two ‘whistleblower’ reports relating to safety risks at the mine, alleged fraud and other concerns relating to DCM’s financial records. Soon after, Mr Mount’s contract was terminated and he commenced proceedings for wrongful dismissal and breach of contract.
The court considered the protections afforded to whistleblowers from victimisation as set out in s1317AC and s1317AD of the Corporations Act. Specifically, it considered whether DCM had satisfied its onus of proof in establishing that a belief or suspicion that Mr Mount had made a protected disclosure was not the reason or part of the reasons for Mr Mount’s termination.
It was agreed that Mr Mount was an ‘eligible whistleblower’, DCM ‘a regulated entity’ and the disclosure was made to an ‘eligible recipient’ for the purpose of the Corporations Act. Katzmann J found that Mr Mount’s strained relationship with the other directors of DCM (Matthew John Haindl, Simon Tripp and George Tucker) predated his removal from DCM, which was influenced by multiple factors.
Haindl, Tripp and Tucker deposed that they were unaware of the whistleblower protections until after the Fair Work Commission proceedings began, and this unchallenged evidence was accepted. Mr Tripp denied reading either of the whistleblower reports. While the court made it clear that ignorance of the law is not sufficient in and of itself for them to escape liability, the fact that they were not aware of the relevant whistleblower protections or the allegations against them, did assist their evidence in discharging the onus of proof.
The court declared that Mr Tripp was the relevant decision maker whose state of mind could be attributed to DCM in considering the decision to dismiss Mr Mount. Ultimately Mr Tripp’s decision (which was consistent with the decision-making of Mr Haindl) was precipitated by events that occurred at a board meeting held on 31 March.
At this meeting, alleged ‘standover tactics’ were undertaken by Mr Perdikaris, which Mr Mount acquiesced in, in which two unknown men, described as ‘heavy set muscular men’, were in attendance and escorted Mr Haindl and Mr Tucker out of the meeting. Katzmann J accepted:
… that the presence of the two strangers came as a shock to all the participants in the meeting…except for Mr Perdikaris and Mr Mount…that Mr Haindl and Mr Tucker found their presence intimidating and …the fact that Mr Mount stood by and said nothing when Mr Perdikaris insisted that both Mr Haindl and Mr Tucker should leave the meeting is troubling….’8
It was found that there were other factors at play influencing the directors decision to remove Mr Mount, including that both Mr Haindl and Mr Tucker had already formed a negative view of Mr Mount’s performance, that Mr Tucker and Mr Tripp were troubled by Mr Mount’s proposal to raise capital for DCM at a discounted price based on a valuation of the company with which they disagreed, and that ‘from the time Mr Mount was hired he was antagonising them’9.Katzmann J was not persuaded that the Respondents were influenced by a belief or suspicion that Mr Mount had made a protected disclosure and DCM discharged their onus under s 1317AD.
Key takeaways
This case indicates the extent to which a decision-maker’s evidence will be taken into account in discharging their onus of proof under s1317AD. Having clearly articulated, valid and documented rationale for dismissal decisions is fundamental to this assessment.
In view of the protections afforded to whistleblowers, it is incumbent upon employers to ensure that they are alive to these potential areas of legal exposure when undertaking disciplinary procedures with employees. This can become more significant when an employee makes it known that they have concerns that relate to misconduct or an improper state of affairs in relation to the corporation (in the private sector) or relates to serious wrongdoing (in the public sector). Should such a situation arise, we set out some practical guidance below.
Tips to avoid falling foul of detrimental conduct/victimisation offences
- Ensure issues of concern relating to an employee’s conduct or performance are raised and addressed at the earliest opportunity, accompanied by comprehensive written records at every stage of the process.
- Isolate and identify key decision-makers where possible.
- Ensure you are familiar with and adhere to the organisation’s Whistleblower Policy.
- Ensure the identity of whistleblowers or information that would lead to their identification is not disclosed.
- Ensure any concerns that are raised in relation to disclosable matters are dealt with correctly in accordance with the organisation’s Whistleblower Policy.
- Separate out the management of the employee’s performance or conduct with any processes relating to the management of their disclosure or potential disclosure.
- Ensure procedural fairness is adhered to at all stages of any performance or conduct management process, as well as compliance with underpinning employment arrangements.
- Seek legal advice at an early opportunity and consider all legal risks before any final decision is made in relation to potential termination of employment or disciplinary processes.
Hamilton Locke advises on a wide range of workplace issues, including whistleblowing. For more information, please contact Kiri Jervis or Roxanne Fisch.
1Corporations Act 2001 (Cth) s1317AC
2Protected Interest Disclosure Act 2022 (NSW) s13
3See for example Protected Interest Disclosure Act 2022 (NSW) s 26 and the Corporations Act 2001 (Cth), s1317AADA
4Protected Interest Disclosure Act 2022 (NSW) s33
5Mount v Dover Castle Metals Pty Ltd [2025] FCA 101 at 147
6Mount v Dover Castle Metals Pty Ltd [2025] FCA 101 at 143
7George v Rocket (1990) 170 CLR 104 at 115 (Mason CJ, Brennan, Deane, Dawson, Toohey, Gaudron and McHugh JJ) cited in Mount v Dover Castle above at n5.
