Believe it or not: Full Federal Court confirms the ‘belief’ and ‘suspicion’ requirements in the whistleblower protection provisions

The Full Court of the Federal Court has provided welcome guidance about the circumstances where a finding that detriment has been caused to a whistleblower will not give rise to liability. It is clear from this decision that the focus is on the subjective beliefs or suspicions of the person alleged to have engaged in the unlawful detrimental conduct, across the four key elements of the provision.

The judgment in Reiche,[1] handed down on 4 May 2026, dismissed an appeal brought by an alleged whistleblower in relation to his claim for compensation under the private sector whistleblower protection provisions.[2] This is the first appellate court judgment on a claim under the post-1 July 2019 whistleblower provisions in Part 9.4AAA of the Corporations Act 2001 (Cth), and continues the trend of unsuccessful claims for compensation under those provisions to date.[3]

In this insight, we outline the key practical takeaways from the judgment and the Full Court’s guidance.

Background

Part 9.4AAA of the Corporations Act[4] confers various protections on the making of certain disclosures by eligible whistleblowers. One such protection is that the Court is empowered to make orders for compensation or other remedies where a person engages in “detrimental conduct”[5] if:

• at the time of the conduct, they believed or suspected the other person “made, may have made, proposes to make or could make a disclosure that qualifies for protection”; and
• that belief or suspicion was the reason (or part of the reason) for the detrimental conduct.

The case at first instance and on appeal

At first instance, Mr Reiche alleged that he had made several whistleblowing disclosures between February and July 2024 that qualified for protection.[6] He further alleged that he suffered detrimental conduct including that his role was considered for redundancy and his employment with Neometals Ltd was ultimately terminated in September 2024.[7]

Feutrill J dismissed the proceeding, having found on the evidence that none of the relevant individuals who recommended or approved the restructure that made Mr Reiche’s role redundant believed or suspected at the time that any whistleblowing disclosure had been or could be made, and that the whistleblowing disclosures were not the reason or part of the reason for the ultimate termination of his employment (notwithstanding those decision-makers did know about the disclosures at that stage).

Mr Reiche appealed on 15 separate grounds. The central issue on the appeal was what a putative wrongdoer must have believed or suspected in order for it to be said that they had engaged in detrimental conduct for a reason proscribed by s 1317AD of the Corporations Act.

Key takeaways

The Full Federal Court in Reiche confirmed three key points in relation to the interpretation of the whistleblower provisions where detriment has occurred:

1. The focus is on the respondent’s subjective beliefs or suspicions

First, the relevant test is whether the respondent engaged in the detrimental conduct because of a subjective belief or suspicion that the applicant, with reasonable grounds, had made (or might have made or could make) a disclosure concerning misconduct or an improper state of affairs in relation to the regulated entity.[8] Belief or suspicion that it would be a protected whistleblower disclosure within the meaning of the legislative regime is not required.[9]

Further, when the Court is assessing the reason for the detrimental conduct, it is the respondent’s belief or suspicion that is relevant on the question of whether the applicant had reasonable grounds to allege misconduct or an improper state of affairs in the suspected whistleblower disclosure.[10] A respondent is not required to establish that the applicant in fact had no reasonable grounds to allege misconduct or impropriety in their whistleblowing disclosure; only that the respondent did not believe or suspect there were such grounds at the time of the detrimental conduct.[11]

2. A respondent can be liable even if their belief or suspicion is incorrect

Second, a respondent might be liable where they engage in detrimental conduct based on a subjective belief or suspicion that turns out ultimately to be wrong (including if they had acted on a perception that a disclosure had been made which in fact had not been made at all).[12] This is because s 1317AD focusses upon the respondent’s belief or suspicion, as opposed to their knowledge. By attaching the potential for liability to a state of belief or suspicion, the provision serves to discourage a broader range of reprisal conduct relative to what might otherwise be covered were it focused only on what is known or true.[13]

3. The belief or suspicion must be the substantial and operative reason for the detrimental conduct

Third, a fact or circumstance will only serve as the reason, or part of the reason, for which detrimental conduct was engaged in “if and to the extent that it bore substantially and operatively” upon that conduct.[14]

This means that, even where a fact or circumstance is relevant to a given decision which causes detriment to an employee (including where it is considered as part of the decision-making process), if the respondent can show that it was not material to the decision, the Court will not find that it was the reason, or part of the reason, why the decision in question was made.[15] This is necessarily a fact-specific inquiry: the Court will focus on what action was taken against the whistleblower and what, if any, links there were between that action and any disclosure that was or could have been made.

What this means for when there might be compensation or other liability

The Full Federal Court’s judgment clarifies the circumstances when it might be found that a respondent had engaged in detrimental conduct for a reason which is proscribed by the whistleblower protection provisions.

We summarise the upshot of the Full Federal Court’s analysis in the table below.

In effect, the provisions require that the respondent is found to have satisfied all four matters in the table below in order that there might be liability to compensation or other relief.

A note of caution

While this may seem to be a high burden for an applicant, importantly, the provisions apply with a reverse onus of proof: if the applicant adduces evidence that suggests a reasonable possibility that the respondent has engaged in detrimental conduct, the respondent bears the onus of proving that the relevant belief or suspicion was not the substantial and operative reason for the detrimental conduct.[16]

Those familiar with the similar reverse onus of proof in the Fair Work Act 2009 (Cth) general protections provisions will know that, accordingly, it is particularly important for decision-makers in companies to maintain records of the reasons for their decisions which may be said to have caused ‘detriment’ to an employee. Such records may be critical in establishing positive evidence of the reasons for the decision and discharging the onus by disproving one or more of the elements of the cause of action set out in the table above.

Further, there are difficult questions which arise in circumstances where the detrimental conduct may be attributed to more than one person or to the board of directions as an organ of the company. In Reiche, the respondent company in effect accepted that if the decision of any one of the decision-makers was for a proscribed reason, then the whole decision was tainted by that reason for the purposes of the whistleblower protection provisions and so the state of mind of each of them was relevant.[17] For that reason, the company called both the CEO and non-executive Chair of the board, among other directors and executives, to give evidence in the proceeding. Whilst the Court did not have to decide this issue, Feutrill J at first instance noted High Court authority supporting this proposition[18] and proceeded on the basis that there would be liability if any one of the decision-makers had made their decision for a proscribed reason.[19]

Accordingly, if detrimental conduct has occurred, a respondent’s default position may need to be to call evidence from all persons involved in the decision in order to demonstrate that the relevant belief or suspicion was not held by any relevant person; or that, if it was, it was not the substantial and operative factor in the decision that was made by each of those persons.

While the Reiche judgment reinforces that detrimental conduct does not automatically lead to liability, it illustrates both the complexity of the whistleblower provisions and the degree of proof needed to discharge the reverse onus of proof. It also underscores the importance of good governance of each organisation’s whistleblower framework. In particular, we see as critical the delivery of practical and targeted training including as to the proper handling of potential whistleblower disclosures. This will help to ensure that protected (and unprotected) complaints can be promptly and accurately identified, relevant beliefs and suspicions formed based on a proper understanding of the legal framework, and decisions about employees taken and documented carefully and by the proper person(s) with appropriate knowledge of the facts.