Full Federal Court confirms threshold for whistleblower victimisation claims

In Reiche v Neometals Ltd [2026] FCAFC 53, the Full Federal Court has delivered its first authority on the enhanced whistleblower protections under Part 9.4AAA of the Corporations Act 2001 (Cth). The Court affirmed the primary judge’s findings and set clear boundaries on when detrimental conduct against a whistleblower will constitute unlawful victimisation, including confirming what a person must suspect or believe when making a decision that adversely affects a whistleblower in order to be liable for potential civil and criminal penalties.

Key takeaways

While Mr Reiche has now sought special leave from the High Court to appeal the Full Federal Court's decision, as it stands, the decision in Neometals will provide some welcome clarity to directors, officers and other eligible recipients on when detrimental conduct against a whistleblower will amount to unlawful victimisation - in particular, the requisite state of mind and causal connection required.

Relevantly, the Full Federal Court found that:

• A decision-maker will be guilty of unlawful victimisation only where they:

  • subjectively believe or suspect that an alleged whistleblower has raised, is raising or may raise concerns, and that those concerns relate to misconduct or an improper state of affairs in relation to the entity (for the purposes of the Corporations Act);

  • subjectively believe or suspect the whistleblower had reasonable grounds to raise those concerns; and

  • those concerns are a substantial and operative factor in their decision to engage in detrimental conduct rather than mere context or background to a decision.

• It does not matter if a disclosure does not actually attract legal protections under the regime – unlawful victimisation can still arise where a decision-maker believes or suspects that it does.

• If a whistleblower's concerns obviously pertain to an improper state of affairs or circumstances, or reasonable grounds for the concerns objectively exist, these may be relevant factors to be taken into account when assessing the state of mind of a decision-maker.

• Where concerns raised do not obviously or readily engage or assist the regulatory functions (compliance, enforcement and/or discipline) of ASIC, APRA or another Commonwealth authority in relation to a regulated entity (or a related body corporate), it may be easier for a decision-maker to establish an absence of the requisite belief or suspicion that a disclosure qualifies for protection.

• Although they employ different terminology, the Corporations Act whistleblower regime and the Fair Work Act 2009 (Cth) (Fair Work Act) general protections regime are relevantly indistinguishable in respect of the causation standard. Circumstances that are contextual to a decision but not a substantial and operative factor will not give rise to the requisite causal link.

The Court did not displace the trial judge's view that strategic or commercial risks raised in the ordinary course of a person's role do not obviously or readily involve the disclosure of information about misconduct or an improper state of affairs or circumstances for the purposes of the Corporations Act.

Background to the first instance decision

The respondent, Neometals Ltd, operates a business focused on sustainable processing solutions in the mining industry. The appellant, Mr Reiche, was engaged in October 2023 as Head of Recycling. His role had an external dimension, representing Neometals' interests on the management board of Primobius, a jointly-owned subsidiary through which Neometals and a German partner carried out a joint venture to design and construct a lithium-ion battery recycling plant.

Over the course of his employment, Mr Reiche made a series of disclosures that he maintained were apt to engage the protections against victimisation under Part 9.4AAA. These included: concerns raised at Neometals board meetings in February and March 2024 relating to governance risks in the Primobius joint venture and conflicts with the German partner's interests; a concern raised with Neometals' CEO in April 2024 about alleged reverse engineering of third-party components and misuse of confidential information; concerns about an allegedly forged signature on a purchase order; and a formal letter dated 9 July 2024 addressed to Neometals' general counsel consolidating the previous disclosures and identifying itself as a disclosure to which Part 9.4AAA applied.

Mr Reiche's role was made redundant following a board resolution on 21 August 2024 approving a restructure plan. On 4 September 2024, Mr Reed (CEO) resolved to terminate Mr Reiche's employment with immediate effect.

By an originating application dated 13 September 2024, Mr Reiche sought injunctive and declaratory relief, statutory compensation and damages under Part 9.4AAA. That application was dismissed on 28 February 2025.

The primary judge found that Neometals had discharged its onus of proving that Mr Reiche's claim was not made out. Specifically, in the case of the redundancy and termination, Neometals proved that when it engaged in the detrimental conduct it either did not believe or suspect that Mr Reiche had made or could make a qualifying disclosure, or, if it did so believe or suspect, that belief or suspicion was not the reason or part of the reason for the detrimental conduct.

The appeal: grounds and the Court's reasoning

The construction of "belief or suspicion"

One of the primary issues on appeal was what a person must believe or suspect in order for detrimental conduct to be taken because of a prohibited reason under the Corporations Act.

While Mr Reiche identified three potential constructions of section 1317AD(1)(b) which houses the victimisation provisions under the Corporations Act), the Full Court held that the belief or suspicion that must exist in the mind of the putative wrongdoer is subjective in two senses: first, that there has been or might be a disclosure about something; and second, that the subject matter of that disclosure aligns with that of a protected disclosure (i.e. misconduct or an improper state of affairs or circumstances asserted on reasonable grounds). However, this does not require that the putative wrongdoer appreciate that the disclosure attracts the legal protections set out in Part 9.4AAA of the Corporations Act.

The causation standard: "The reason, or part of the reason"

The Court rejected Mr Reiche's contention that the primary judge had applied too narrow a causation test. In essence, Mr Reiche argued that the whistleblower regime should be easier to invoke than the general protections regime under the Fair Work Act. He contended that because the Corporations Act uses the phrase “the reason, or part of the reason” when considering if a prohibited circumstance contributed to a decision that affects a whistleblower – rather than simply asking whether conduct was engaged in “because” of a prohibited circumstance – any connection at all between a disclosure and detrimental conduct, no matter how minor, should suffice to establish liability. However, the Court did not accept this argument.

It was held that the Corporations Act and the Fair Work Act use different words but impose the same causation test for unlawful victimisation. Specifically, a whistleblower’s disclosure will only be treated as “the reason, or part of the reason” for detrimental conduct if it was a substantial and operative factor in the decision – meaning it actually drove or materially influenced the outcome. If a decision-maker was merely aware of a disclosure at the time of making a decision, but that awareness played no real part in motivating the decision, the causal link will not be established and that awareness will simply be viewed as a contextual matter.

Corporate attribution of state of mind

The Court also clarified how the state of mind of individual officers may be attributed to a company. Where a decision is made by a corporate body (here, the Neometals board), the relevant inquiry is directed at the individuals who actually effected the decision. The states of mind of other officers – even senior ones – cannot simply be attributed to the company at large if those officers played no role in making the decision in question.

In practice, this meant that each member of the Neometals board was required to give evidence as to their reasons for approving the restructure, because it was the board that resolved to approve the restructure that ultimately resulted in Mr Reiche’s role being made redundant. In addition, Mr Kelsall and Ms Di Virgilio – who prepared the board papers and recommended the restructure but did not themselves make the decision – were also examined as to their motivations. The Court accepted this approach because their preparatory conduct and recommendations were capable of being attributed to Neometals insofar as they influenced the board’s ultimate decision. However, the primary judge found that neither Mr Kelsall’s nor Ms Di Virgilio’s belief or suspicion regarding a whistleblower disclosure motivated their recommendations.

The decision highlights the importance of ensuring that individuals who recommend a particular course in relation to a whistleblower, as well as those ultimately responsible for making a decision that affects a whistleblower, must not be motivated by an actual or potential whistleblower disclosure. If even one person involved in a decision has such a motivation, this can taint the decision in its entirety.