When is an employee complaint also a whistleblower complaint? What’s the difference and why does it matter?

An employee complaint can also be a whistleblower complaint, even if an employee doesn’t name it as such. Failing to recognise a whistleblower complaint can put a business in ‘hot water’ legally, and can also allow an employee to lever for better financial outcomes in employment termination scenarios.

The whistleblower protection provisions in the Corporations Act 2001 (Corporations Act) apply to all corporate entities doing business in Australia, with additional obligations for big business and listed entities in relation to having whistleblower policies. The provisions afford certain important protections to whistleblowers – particularly by requiring that their identity remain strictly confidential (unless consent is otherwise provided) and by protecting them from any detriment inflicted by the corporation or individuals because of their complaint. Very substantial criminal and civil liabilities can be incurred for contraventions of these provisions, both for the corporation and for individuals involved in contraventions.

This article will focus on what a whistleblower complaint is and is not and includes key takeaways for businesses caught by the whistleblower provisions in the Corporations Act.

Criteria for a whistleblower complaint

The first step is to look at the key criteria to determine what constitutes a whistleblower complaint under the Corporations Act. There are three main considerations:

1. The complainant must be an ‘eligible whistleblower’ – this captures a fairly broad range of potential complainants and includes current and former employees and officers, individual suppliers to a corporation, employees of suppliers, an associate of a corporation, or a relative or dependent of any of these individuals.¹ There is no requirement for a complainant to identify themselves in order to be an eligible whistleblower – a key concept in these provisions is that complainants can choose to remain anonymous.
2. The complaint must be made to a particular person (‘eligible recipient’) within or related to the corporation – this includes an officer or senior manager, an auditor or actuary, a person authorised to receive disclosures (e.g. in a whistleblowers’ policy), the Australian Securities and Investment Commission (ASIC), or the Australian Prudential Regulation Authority (APRA).² In certain circumstances, it can also include disclosure to a journalist or a member of Commonwealth or State/Territory Parliament.³ 
3. The complaint must relate to ‘disclosable matters’ in relation to the corporation. 

Whether a complaint is a ‘disclosable matter’ can be the most difficult to determine.  The definition is broad, and there has been very little case law to date to provide guidance. 

Essentially the Corporations Act says it is where a discloser has reasonable grounds to suspect that the complaint concerns ‘misconduct’ or an ‘improper state of affairs’ in relation to the corporation or a related body corporate. Misconduct includes (but is not limited to) fraud, negligence, default, breach of trust and breach of duty.  

There is no specific definition of an ‘improper state of affairs,’ which potentially means it could include any variety of different transgressions related to the entity. As an example, it could potentially extend to subjecting employees to a workplace environment that is hostile on the ground of sex – recently made unlawful by an amendment to the Sex Discrimination Act 1984 (Cth), covered in our recent article on the ‘Respect at Work’ bill passing Australian Parliament. ⁴

The Corporations Act does state that a disclosable matter specifically includes conduct that:

1. contravenes the Corporations Act, the ASIC Act or various other finance-related federal legislation;
2. is a Commonwealth offence punishable by 12 months imprison or more; or
3. represents a danger to the public or the financial system.⁵

Importantly, there is no requirement that a complaint is named as a ‘whistleblowing’, nor that a complaint is made in ‘good faith’.⁶  However, the whistleblower must have reasonable grounds to suspect the misconduct or improper state of affairs. This has been held to require that the whistleblower must have some personal knowledge of the grounds (but need not be able to prove them), and, that those grounds manifest a ‘reasonable’ basis for suspicion.⁷ 

What is not a whistleblower complaint

A complaint will not be a whistleblower complaint under the Corporations Act if:

1. the complaint is not made to an eligible recipient (e.g. the complaint is made to a line supervisor or HR officer who is not a senior manager and is not otherwise authorised to receive a complaint) – although, please note that a complainant can easily rectify this by making a further complaint to an eligible recipient;
2. the complaint is not about conduct ‘in relation to’ the corporation or a related entity. For example, we recently advised on a matter where the complainant, an employee of a supplier, was informing a corporation of misconduct by the supplier (i.e not misconduct by the corporation or a related entity);
3. it doesn’t meet the criteria outlined above;
4. it relates to a ‘personal work-related grievance’.  

Arguably, for managers and HR professionals, the ‘personal work-related grievance’ is the most important exception to the whistleblower protection regime.

A personal work-related grievance concerns a grievance about the discloser’s employment or former employment having implications for the discloser personally. Examples includes interpersonal conflict; decisions relating to terms and conditions of employment, engagement, transfer or promotion of the complainant; or disciplinary, suspension or termination decisions.  

These are the more common of employee complaints. However, a more serious personal work-related complaint which has significant implications beyond the complainant may still qualify as a whistleblower complaint – as an ‘improper state of affairs’. An example might be where a complaint relates to a supervisor who is bullying or sexually harassing numerous people within an organization, or a complaint relates to bullying and some other kind of inappropriate conduct. 

Key takeaways

It is important that all senior managers and other ‘eligible recipients’ are trained on recognising and dealing with whistleblower complaints. Not recognising a whistleblower complaint can lead to inadvertent disclosure of a complainant’s identity (which may be as simple as telling the HR Manager the identity) or causing or leading to some kind of detriment to the complainant – both of which are unlawful under the Corporations Act and can lead to civil and criminal prosecution.

A further option, which is recommended by ASIC,⁸  is for corporations to consider authorising an independent whistleblowing reporting service to receive complaints. 

HopgoodGanim Whistleblower Reporting Service

HopgoodGanim can provide you with a confidential whistleblower reporting service for your employees and other third parties, to assist you to perform your obligations under Australia’s whistleblower protection laws. As part of our HopgoodGanim Whistleblowing Reporting Service, we can:

• take and document reports or complaints made under your own whistleblowing policy;
• for that purpose, maintain dedicated phone and email channels to which reports and complaints might be made.  The service contemplates that you will incorporate these into your own whistleblowing policy and/or complaint/reporting mechanisms;
• provide you, in suitable form, with the detail of reports or complaints made through the service; and
• liaise, as appropriate, with whistleblowers.

Along the way we will make sure to keep complaints and reports confidential and secure and, as legally required, help you to protect the confidentiality of whistleblowers’ identities.

Other whistleblowing services

Outside or additional to the HopgoodGanim Whistleblower Reporting Service, we can also:

• train your relevant personnel about the basics of Australia’s whistleblower protection laws;
• help you develop a compliant whistleblower policy;
• investigate complaints or reports made under the policy;
• advise you how to manage such complaints or reports and the individuals affected by them.

For further information about our Whistleblower Reporting Service, please contact our Workplace and Employment team or your usual HopgoodGanim or Effective Governance advisor, or send us a note to [email protected]. 

Our Workplace and Employment team at HopgoodGanim are also well positioned to provide legal expertise across wider employment, industrial relations and workplace health and safety matters. Our team can assist clients with compliance with regulation, optimising workforce engagement and outcomes, and managing and containing exposure to possible disputes or litigation.

1. See section 1317AAA of the Corporations Act for a full list. 
2. See section 1317AAC of the Corporations Act.
3. See section 1317AAD of the Corporations Act.
4. See below exception for ‘personal work-related grievances’ – section 1317AADA of the Corporations Act.
5. See section 1317AA of the Corporations Act for further detail.
6. This obligation on complainants was removed in the 2019 reforms.
7. Quinlan v ERM Power Ltd & Ors [2021] QSC 35.
8. Regulatory Guide (RG 270, November 2019).