Defamation in the workplace: references, complaints, investigations and gossip

Workplaces generate a constant flow of statements about people: references, performance reviews, complaints to human resources, investigation reports, emails about why a colleague has left, and gossip. Most could be defended if a claim were made. This article explains when a workplace statement is a publication, why qualified privilege does most of the work and where it stops, when absolute privilege applies, how far an employer is liable for what its staff say, and how defamation interacts with other workplace laws.

Section numbers are those of the Defamation Act 2005 (NSW), which Queensland, Victoria, South Australia and Tasmania share for the provisions discussed. The Australian Capital Territory and Northern Territory provisions are numbered differently, and Western Australia has not adopted the 2021 reforms.

Workplace statements are publications

Defamation requires publication: the communication of defamatory matter to at least one person other than the person defamed. The High Court confirmed in Fairfax Media Publications Pty Ltd v Voller that the common law has long treated anyone who participates in or intentionally lends assistance to the communication of defamatory matter as a publisher of it.¹ An email from one manager to another, a complaint lodged with human resources, a reference sent to a prospective employer and a report circulated to an investigation panel are therefore all publications. A “confidential” marking may be relevant to defences and to the extent of harm, but it does not prevent publication.

Tassone v Kirkham illustrates the point. A correctional officer sent an email from a colleague’s work account to departmental distribution lists reaching about 2,300 recipients, falsely presenting the colleague as soliciting sexual contact through his work email. The District Court of South Australia awarded $75,000 for hurt feelings and injury to reputation (which the Act calls damages for non economic loss), a figure that included aggravated damages, plus medical expenses and a period of lost wages.²

Serious harm in a small professional community

Since 1 July 2021 (later in Tasmania and the Northern Territory), in every jurisdiction except Western Australia, it is an element of the cause of action that the publication has caused, or is likely to cause, serious harm to the plaintiff’s reputation.⁴ The judge decides the question, and may do so before trial.⁴

Workplace publications are often made to a handful of people. That does not of itself defeat a claim, because the workplace audience is often the one whose opinion matters most: the people who decide on promotion, contract renewal or a reference. Courts applying the serious harm element accept that in a small scale publication the quality of the recipients rather than their number tends to determine the outcome, and that the “grapevine effect” within a close community can be relevant.⁵

Even so, the harm must be proved. In Zimmerman v Perkiss, a woman who helped run the dog grooming business where the plaintiff had worked sent private messages to the plaintiff’s new employer accusing her of theft. The District Court of New South Wales found that the sole recipient did not believe the allegation or spread it, that the plaintiff’s distress at being falsely accused was not evidence of harm to reputation, and that serious harm was not established; the claim was dismissed.⁵

Qualified privilege does most of the work

Most workplace statements are defensible because of qualified privilege. Two versions exist side by side. The common law defence is preserved by s 24 of the Defamation Act 2005, which makes the statutory defences additional to any defence available apart from the Act.⁶ The statutory defence in s 30 protects publication to a recipient who has an interest or apparent interest in information on a subject, where the matter is published in the course of giving that information and the publisher’s conduct was reasonable.⁷

Common law qualified privilege

At common law, the defence arises where the publisher has a legal, social or moral duty or a legitimate interest in making the statement and the recipient has a corresponding duty or interest in receiving it. The High Court in Bashford v Information Australia (Newsletters) Pty Ltd restated that “reciprocity of duty or interest is essential” and that the court must closely scrutinise the circumstances, the parties, their relations and the events surrounding the publication.⁸

Classic workplace occasions include a reference given to a prospective employer who asked for it, a complaint to a manager or human resources about a colleague, an investigator’s report to the person who commissioned it, and a performance review communicated to the employee and those who manage them. In each case the recipient has a real interest in receiving the information and the publisher a duty or interest in giving it.

Honest mistakes do not destroy the privilege. In Cush v Dillon, a board member of a statutory authority told the board’s chair that it was “common knowledge” within the organisation that the general manager and another board member were having an affair. The statement was false. The High Court held that because the occasion extended to raising the rumour as a governance concern, putting it as fact rather than rumour did not take the statement outside the privilege. The error in the statement did not defeat the privilege.⁹

The test is whether the defamatory matter is sufficiently connected to the privileged occasion. In KSMC Holdings Pty Ltd t/as Hubba Bubba Childcare on Haig v Bowden, a childcare centre emailed 35 parents that a former educator had left “due to disciplinary reasons” and had “not been truthful with us regarding his studies and some other issues”. The Court of Appeal held that parents had a critical interest in knowing who had cared for their children and why that person had left, that the explanation was sufficiently connected to that occasion, and that no malice was shown. A trial award of about $238,000 was set aside and the claim dismissed.¹⁰

Where the privilege stops

Qualified privilege has three limits that matter in workplaces.

First, the statement must stay within the occasion. Material that is irrelevant to the duty or interest served, or that goes well beyond what the occasion requires, is not protected.⁹ A complaint about a colleague’s conduct in an incident is one thing; adding unrelated allegations about their private life is another.

Second, the audience must be the right one. Circulating a complaint or investigation finding to staff with no role in the matter, or sending an “all staff” email about one person’s alleged misconduct, risks publishing to recipients with no reciprocal interest. The defence may then be lost for that wider publication, even though it would have protected a narrower one.

Third, the defence is defeated by malice: an improper purpose, such as spite or a desire to injure, rather than the purpose for which the occasion exists, and that purpose must be the dominant reason for the publication.³ Proof that the publisher knew the statement was false, or was reckless to the point of wilful blindness, is almost conclusive proof of malice. A mere lack of belief in its truth is only evidence of malice, to be weighed with the other evidence.^{3 10} The statutory defence is also defeated by malice, and the common law determines what malice means.⁶

The statutory defence and reasonableness

The s 30 defence requires the publisher to prove that its conduct was reasonable. The factors the court may consider include the seriousness of the imputation, whether the publication distinguished between suspicions, allegations and proven facts, the nature of the business environment, whether speed was appropriate and what steps were taken to verify the information.⁷ For an employer, those factors describe a sound investigation process.

Absolute privilege: courts, tribunals and police

Some workplace statements cannot found a defamation claim at all. Section 27 gives absolute privilege to matter published in the course of the proceedings of a parliamentary body, an Australian court or an Australian tribunal, including documents filed, evidence given and judgments.¹¹ “Australian tribunal” means a tribunal, other than a court, established under an Australian law with power to take evidence from witnesses on oath or affirmation.¹¹

The Fair Work Commission is established by the Fair Work Act 2009 (Cth) and may inform itself by taking evidence under oath or affirmation.¹² On that basis, witness statements, submissions and evidence in unfair dismissal, general protections and anti bullying matters before the Commission attract absolute privilege, as do proceedings in state industrial and anti discrimination tribunals with power to take sworn evidence.

A later round of reform (the Stage 2 Part B model amendments) extended absolute privilege to matter published to a police official acting in an official capacity, which covers a workplace report of suspected theft or assault. In New South Wales the provision is s 27(2)(b1), in force from 1 July 2024; in Queensland it is s 27(2)(ba), in force from 26 December 2025.^{11 13} Victoria, South Australia, Tasmania, the Australian Capital Territory and the Northern Territory have enacted the same model amendment; Western Australia has not.²⁰

Complaints to regulators are different. In Mann v O’Neill, the High Court held that a letter of complaint to the Attorney General about a magistrate’s fitness for office attracted qualified, not absolute, privilege, because absolute privilege is confined to situations of necessity and complaints to an investigating or prosecuting authority do not require it.¹⁴ A complaint to a professional board or safety regulator about a colleague will therefore usually attract qualified privilege, lost if made maliciously, unless a statute confers absolute privilege or the complaint is the required first step in an established procedure of a quasi judicial kind. The High Court in Mann v O’Neill accepted that a complaint of that kind can attract absolute privilege at common law.¹⁴ In New South Wales, Schedule 1 to the Act extends absolute privilege to bodies such as the Ombudsman, the Independent Commission Against Corruption and legal and medical complaint bodies; Queensland’s Act has no such schedule and relies on individual statutes.^{11 13}

When the employer is liable

An employer is a publisher in its own right of statements made with its authority, because all who participate in a publication are publishers of it.¹ Examples are an email sent by a director on behalf of the company, a reference signed in the company’s name, or a termination announcement approved by management.

An employer may also be vicariously liable for a defamatory publication made by an employee in the course of employment. The High Court confirmed in Bird v DP (a pseudonym) that vicarious liability in Australia depends on a relationship of employment and does not extend to independent contractors or relationships merely “akin to employment”.¹⁵ Whether a statement was made in the course of employment is a question of fact. A supervisor’s comments in a performance meeting almost certainly were; an employee’s personal social media post about a colleague on a Saturday night almost certainly was not.

Interaction with workplace laws

Workplace defamation disputes often overlap with claims under workplace laws. An employee who complains about a colleague or manager is usually exercising a workplace right under the Fair Work Act, which includes making a complaint or inquiry in relation to their employment, and an employer must not take adverse action against a person for exercising a workplace right.¹⁶ Suing or threatening to sue an employee over an internal complaint, or dismissing them for making it, can therefore raise an adverse action claim in addition to the qualified privilege that would usually protect the complaint.

A worker who reasonably believes they have been bullied at work may apply to the Fair Work Commission for an order to stop bullying, where an individual or group has repeatedly behaved unreasonably towards them in a way that creates a risk to health and safety; reasonable management action carried out in a reasonable manner is excluded.¹⁷ Repeatedly spreading false and damaging allegations about a colleague can fall within that description.

A dismissed employee may apply for an unfair dismissal remedy within 21 days of the dismissal taking effect.¹⁸ Where the dismissal rested on an investigation the employee says was defamatory, the two claims often run in parallel; evidence given in the Commission is absolutely privileged while the original investigation report is not.

Practical steps

For employers and investigators: confine complaints, interview records and findings to those who need them; record allegations as allegations until tested; give the person concerned a chance to respond before conclusions are circulated; explain departures neutrally and without gratuitous detail, as the Court of Appeal accepted in KSMC Holdings v Bowden; keep references factual and give them only to the person who asked.

For employees who believe they have been defamed, the first questions are who received the statement, what they did with it, and what evidence exists of harm to reputation rather than hurt feelings. Outside Western Australia, a concerns notice must be given before proceedings can be commenced, and the publisher then has 28 days to make an offer to make amends.¹⁹ Where the real grievance is unfair treatment rather than reputation, a Fair Work application may be the more direct remedy.

For employees accused of defaming a colleague, the questions are whether the statement was made on a privileged occasion, whether it stayed within that occasion and audience, and whether there is evidence of an improper purpose. A prompt, measured response to a concerns notice is usually better than silence.

Differences between jurisdictions

Western Australia has not enacted the 2021 reforms. As a result, there is no serious harm element, a concerns notice is not a precondition to suing, and the triviality defence continues to apply. The police absolute privilege provision is s 27(2)(b1) in New South Wales and s 27(2)(ba) in Queensland, and equivalent provisions have been enacted in every other jurisdiction except Western Australia. Where an Act has a Schedule 1 listing further bodies and publications that attract absolute privilege, the list is specific to that jurisdiction.^{11 13 20}

Getting advice

Whether a workplace statement is defensible depends on who said it, to whom, for what purpose and in which jurisdiction, and on what evidence exists of actual harm. Those questions are usually easier and cheaper to answer early, before a complaint circulates further.