Detriment under the whistleblowing regime: what it means and how to minimise risk

The statutory definition of “detriment” and its judicial interpretation

Non-exhaustive definition

The whistleblowing regime in Part 9.4AAA of the Corporations Act prohibits victimisation and enables compensation and other remedies where a person engages in conduct that causes (or threatens to cause) detriment to another person in circumstances where the person believes or suspects that the person has made, may have made, proposes to make or could make a protected disclosure, and that belief or suspicion is the reason, or part of the reason, for the detrimental conduct.

Section 1317ADA of the Corporations Act defines “detriment” for these purposes to include, without limitation, dismissal, injury in employment, disadvantageous alteration of an employee’s position or duties, discrimination, harassment or intimidation, harm or injury including psychological harm, damage to property, reputation, business or financial position, and any other damage to a person.

As the cases discussed below confirm, this list is illustrative and not exhaustive; detriment simply means disadvantage.[1] In Mount v Dover Castle Metals Pty Ltd [2025] FCA 101 (Mount), the Court stated the intention of s 1317ADA was “to capture any disadvantage and that the list was illustrative only”.[2] Reiche v Neometals Ltd (No 2) [2025] FCA 125 (Reiche) endorsed this broad approach, stating there is “no warrant in the text, context or purpose of Pt 9.4AAA to confine the concept of detriment”.[3]

Expansive reading to give effect to whistleblowing regime’s protective design

The practical stakes of getting this right are thrown into sharp relief when there is public scrutiny of how disclosers are treated by organisations. While more obvious forms of detriment (such as physical harm, or termination of employment) may be readily avoided, risk also attaches to more indirect mechanisms, including the nature and content of negotiated exit arrangements and confidentiality terms, that could later be characterised as detrimental or as discouraging engagement with regulators.

This aligns with the regime’s protective purpose: an approach that proscribes novel or unanticipated forms of disadvantage ensures the law remains effective as circumstances evolve. The drafting choice to make s 1317ADA broader than the equivalent definition in the Fair Work (Registered Organisations Act) 2009 (Cth) — by adding “damage to a person’s business or financial position” and “any other damage to a person” — reinforces this intent.

Burden of proof, attribution of detrimental conduct to body corporates and causation

Before turning to these matters in detail, it is worth noting what a decision-maker must have believed or suspected for liability under the detriment provisions to be engaged.

On appeal, the Full Federal Court in Reiche v Neometals Ltd [2026] FCAFC 53 (Reiche Appeal) confirmed that a decision-maker does not need to know or appreciate that a disclosure attracts legal protection under Part 9.4AAA — there is no requirement that they be familiar with the legislation or understand its legal consequences. What matters is whether the decision-maker held a subjective belief or suspicion that a disclosure concerning misconduct or an improper state of affairs had been, might have been, or could be made, and that the discloser had reasonable grounds to make it.

Critically, liability can arise even where that belief or suspicion later turns out to be incorrect — including where the decision-maker acted on a perceived disclosure that, in fact, was never made. This is because the provision is directed at belief or suspicion, not knowledge. Attaching liability to a state of mind, rather than to the existence of objective facts, will means it applies, and therefore discourages reprisal conduct, in a broader range of circumstances.

Burden of proof for remedies

In proceedings where a whistleblower is seeking an order for compensation or another remedy under s 1317AE, the whistleblower bears the onus of “adducing or pointing to evidence that suggests a reasonable possibility” of the detrimental conduct. If that onus is discharged, then the other person (the respondent) bears the onus of proving the claim is not made out.[4] This is a comparatively low bar for the applicant to clear: it only requires evidence pointing to a reasonable possibility of the alleged conduct, not proof on the balance of probabilities. Once that threshold is met, the burden shifts to the organisation to prove that no relevant belief or suspicion was held, or that it was not a substantial and operative reason for the conduct in question.

By contrast, there is no reversal of the onus of proof in claims that a person has been victimised under s 1317AC(1).[5] Of course, these two provisions have different work to do. Section 1317AC(1) establishes whether victimisation has occurred at all: here, the evidentiary burden rests with the person alleging the contravention and will be tested and possibly challenged by the respondent in the ordinary course. Section 1317AE, on the other hand, determines the court’s power to order a remedy: here, the burden shifts to the respondent who must proactively adduce positive evidence of the decision-maker's state of mind and genuine reasons for the relevant conduct.

Attribution of detrimental conduct to body corporates

Section 1317AD(1) requires the alleged victimiser must have engaged in conduct that causes (or threatens to cause) detriment to another person for the reason of, or for reasons that include, their belief or suspicion the person had made, might have made, proposed to make or could make a protected disclosure.

The Court in Reiche at first instance held it is clear the provision is intended to impose legal liability on a company, and that the conduct of a company is conduct that is attributed to the company under the primary rules of attribution or ordinary rules of agency. The Court explained that the requisite belief or suspicion and the reasons or part of the reasons for the detrimental conduct are the state of mind and reasons of the organ of the company (i.e. its board of directors) or the natural person whose conduct and state of mind is attributed to the company for the purposes of those provisions.[6] In circumstances where the detrimental conduct is alleged to have been engaged in through a company’s board of directors, Reiche further held that the board’s decision would be “tainted” by the proscribed reason if at least one member of the Board who was present and voted on the relevant resolution held the relevant belief or suspicion, and that was the reason or part of the reason for the director’s decision to vote in favour of the resolution.[7]

This approach was not disturbed on appeal - the Full Court in the Reiche Appeal accepted the primary judge's finding that no member of the Neometals board held the relevant belief or suspicion when the board resolved to approve the restructure on 21 August 2024, because the directors had not received Mr Reiche's letter raising his concerns until afterwards (later that day).

In practice, this means an organisation cannot insulate a board or committee decision from risk simply because most participants were unaware of a disclosure — if even one relevant decision-maker held the belief or suspicion and it factored into their decision-making, the decision as a whole may be exposed. Where a disclosure has been made or suspected, it is good practice to identify in advance which decision-makers had, or may have had, relevant knowledge, and to ensure that is reflected in the record of any subsequent decision.

Establishing causation

For causation, the proscribed belief or suspicion must be the reason, or part of the reason, for the detrimental conduct. Reiche explains that “part of the reason” does not extend to a reason that was incidental or that is not a substantial and operative factor in the reason for the detrimental conduct. Merely considering or taking into account a proscribed belief or suspicion in making a decision to engage in detrimental conduct does not establish causation where it does not move the decision maker to act.[8]

This causation standard was directly challenged on appeal — Mr Reiche argued in the Reiche Appeal that "the reason, or part of the reason" should not be read as importing any "substantial and operative factor" qualification, since that language does not appear in the statute. The Full Court rejected this argument, holding that the language of s 1317AD(1)(c), although differently worded from the general protections provisions in the Fair Work Act 2009 (Cth), is relevantly indistinguishable from that legislative scheme. The Full Court then drew upon that general protections jurisprudence to confirm that a belief or suspicion will only satisfy the causation element if it was a substantial and operative factor in the decision to engage in the detrimental conduct. A belief or suspicion that was merely considered, or that formed part of the background to a decision without materially moving the decision-maker, will not be enough.

The practical operation of this standard is well illustrated by Mr Reiche's case. Two individuals — the General Counsel and the Chief Financial Officer — were found to have held the relevant suspicion from as early as 9 July 2024, when Mr Reiche provided a letter expressly invoking Part 9.4AAA. The People & Culture Manager was found to have formed the relevant suspicion later that month. She and the Chief Financial Officer prepared the papers for the Board that recommended the restructure that ultimately led to Mr Reiche’s redundancy. However, the Full Court accepted the primary judge's finding on the evidence that neither individual’s suspicion was the reason, or part of the reason, for their recommendation. The later termination decision was explained by legitimate, unrelated reasons: that Mr Reiche's role had been made redundant, that agreement on an alternative role had not been reached within a reasonable period, and that he had not engaged with the business and was thought unlikely to do so. This outcome demonstrates that even where a decision-maker's belief or suspicion is established, an organisation may still avoid liability if it can show, with cogent evidence, that the belief or suspicion did not operate on the actual decision made. It is worth noting that Mr Reiche has since sought special leave to appeal to the High Court, so this guidance may yet be revisited.

Recent case examples of detriment

The following recent decisions illustrate how the courts have applied these principles in practice.