Under the whistleblowing regime in the Corporations Act 2001 (Cth) (CA), it is unlawful for someone to cause or threaten to cause detriment to, or victimise, a person because they believe or suspect that the person has made, may have made, or could make a whistleblowing disclosure (Whistleblower). Very substantial civil and criminal sanctions apply for both the individual engaging in detrimental conduct and the corporation that employs the Whistleblower and the antagonist.
The question for corporate employers is how to address issues with a Whistleblower’s work performance or conduct whilst avoiding contravention of the “no detriment” protection.
Section 1317ADA of the CA defines detriment as including, but not limited to, the following:
- injury of an employee in his/her employment;
- altering the employee’s position or duties to his/her detriment (eg demotion or change of location);
- being discriminated against;
- being subject of harassment or intimidation;
- harm or injury to a person, including psychological injury;
- damage to a person’s property, reputation, business, financial position; or
- any other damage.
Carrying out any sort of disciplinary process relating to an employee’s performance (eg. performance improvement plan, warnings) or an employee’s conduct (eg. counselling, warning) would amount to a detriment on the basis that it injures (impairs) a person in their employment. The potential outcomes of such processes (such as demotion or change of location) involve altering the employee’s position to their disadvantage.
So there is no doubt that addressing matters of performance or conduct with a Whistleblower involves that person being exposed to detriment.
The critical issue is the reason for the employer seeking to address performance or conduct concerns with the Whistleblower. This is because causing or threatening to cause detriment to a Whistleblower will only attract civil or criminal sanction where the person committing the relevant acts does so because the person believed or suspected that the Whistleblower has made, may have made, or could make a qualifying disclosure.
Where the action causing detriment is taken because the Whistleblower is guilty of some act of misconduct unconnected with the fact of having made a disclosure, or has failed to meet some accepted standard of performance, then the prohibition is not engaged.
In any proceedings, it would be for the Whistleblower or the party claiming through them to prove on the balance of probabilities that the action causing detriment was taken because the Whistleblower had made, or may have made, a qualifying disclosure. That said, it would be a rare case where the party taking the action could safely refrain from leading direct evidence of the process that led to the action being taken and the considerations adverted to throughout that process.
In light of those considerations, any employer undertaking disciplinary action against a Whistleblower for issues of conduct or performance should ensure the following:
- Ensure that all applicable policies and codes are followed when processing the conduct or performance issue. Any shortcuts or failures could give rise to an inference that the “real” reason behind the action was to cause detriment to the Whistleblower because they “blew the whistle”.
- Handle the performance or conduct issues in a way that is seen to be separate from the process relating to the qualifying disclosure. Maintain separate files and, if possible, different staff should be involved.
- Create and retain a paper trail that includes evidence to substantiate the problems of performance or conduct.
If in doubt, employers should seek legal advice or speak to us about strategies.