Defamation in the workplace: what you need to know

Updated: 21 August 2024

It’s common for employees to complain about colleagues, their bosses, and customers. At some point – and if they’re not careful – an employee’s rant can turn into a defamatory statement. 

This can result in anguish, distress, and a damaged reputation for their target. Meanwhile, the person who made those statements could be sued. If they lose, they could end up paying hundreds of thousands of dollars in damages. 

In this article, we’ll take a closer look at defamation in the workplace. We'll share some real-life examples to guide you. We’ll also discuss the roles that employees, HR managers, and employers play in creating a defamation-free workplace.

What is defamation?

Defamation is the act of publishing material that harms a person’s reputation. Published material refers to:

•  anything that’s written including print, email, social media posts, and online comments
•  anything that’s said
•  an act or gesture

 These all involve having a third party see, hear, or read the defamatory material. 

 For published material to be defamatory, it must:

• be a false statement
• identify the person
• cause damage to the person’s standing in society, resulting in hurt or ridicule 

There are 7 possible defences to defamation, one of which is qualified privilege. We’ll explain that in more detail later.

Australia has been called the defamation capital of the world, with 577 defamatory cases logged from 2014 to 2018. Before 2005, each state or territory had their own defamation legislation. Because of inconsistencies, uniform defamation legislation was introduced in 2005. Further amendments to defamation laws were made in 2020 and 2023.

Here’s a video that talks about these amendments:

Curious to know how the top names in HR deal with defamation in the workplace? Contact anyone from our list of the best HR executives in Australia in HRD’s Hot List 2024.

What constitutes defamation in the workplace?

Defamation in the workplace happens when published material causes a person harm. Published material could be anything printed, spoken, or published online. Some examples:

• an email shared among work friends speculating how someone got promoted
• a photoshopped image of a manager, created as a joke and shared with peers
• gossip about a colleague’s personal life

When does water cooler chit-chat turn into defamation in the workplace?

“Anybody is entitled to say anything they like about a fellow employee or an employer, provided that it is said to the correct person, and it is not said with malice. That’s where it oversteps the line,” said Barry Goldsmith, principal of Australian Defamation Lawyers.

Goldsmith touched on one of the defences to defamation: qualified privilege. A statement made about a colleague falls under qualified privilege if the third party had a right to know. Some examples:

• statements made to a manager as part of a workplace investigation
• feedback shared about a colleague during a performance review
• complaints made through the proper channels

Any complaints or allegations should be made to the appropriate person in the company, said Goldsmith.

“If someone wants to make a complaint to the directors, for example, the directors would always have a legitimate interest in knowing about allegations against any employee. Ultimately, the directors are responsible for everything that goes on within the company.”

Case studies: notable workplace defamation cases 

Cases of defamation in the workplace serve as cautionary tales for managers and staff. Here are two noteworthy workplace defamation case studies:

‘I Quit’ email calls manager a liar, a thief, incompetent

In Bristow v Adams, an employee named Tracy Adams sent her resignation email to her manager Alan Bristow. She also sent it to HR and others in the company. In that email, she called Bristow a liar, a thief, and an incompetent manager.

Goldsmith acted as Bristow’s lawyer. “One of his subordinates was about to leave and in her final afternoon, she sent an email to all and sundry, including interstate employees. Had she just confined that email to the directors or my client’s superior, then she would have been protected by the defence of qualified privilege.”

The court ruled in Bristow’s favour, saying Adams’ email was defamatory. The court also awarded $10,000 in damages to Bristow.

Email costs prankster $100,000 in defamatory damages

The case of Kirkham v Tassone involved two employees at the Adelaide Remand Centre. Stephen Kirkham sent a prank email from Cosimo Tassone’s email when Tassone was away from his desk. The email said that Tassone was a homosexual and was “looking for likeminded people to share a good time with.” Around 1,200 co-workers, including other State Department employees, received the email.

The statement wasn’t true, but it caused Tassone such distress. He went on sick leave and was later diagnosed with stress and anxiety. He also made a workers’ compensation claim.

The court ruled in Tassone’s favour, awarding around $100,000 in damages.

Impact of workplace defamation on employers and employees

Looking at the case studies we shared, it’s clear how defamation can have long-term effects on both employers and employees. Let’s take a closer look at the impact on each of them:

Effects on victims

Victims of workplace defamation often suffer mental anguish and emotional distress. This impacts their mental health and well-being, affecting their quality of life and productivity. 

As we have seen in Kirkham v Tassone, a victim of defamation may have to take medical leave.  In extreme cases, they will have to file for workers' compensation.

Defamation can also lead to a damaged reputation in the workplace. The victim could end up feeling isolated, ridiculed, and judged by their colleagues.

Incidents of defamation in the workplace can strain professional relationships. This makes it difficult for the victim to work well with colleagues, clients, or business partners.

News travels fast, so any allegations can spread to the wider industry the victim works in. This could have an impact on opportunities for pay raises, promotions, or job offers.

Effects on the workforce

The effects of defamation in the workplace are not limited to the victim. These affect the wider workforce, too. Cases of defamation can lead to a divisive workplace, with employees taking sides. It might fuel further gossip which could affect productivity and morale.

Effects on employers

While the focus should be on the employees who are hurt, there are impacts to businesses:

• Low employee morale and productivity are bound to hurt the bottom line.
• High absenteeism and missed deadlines affect the company’s finances.
• The organisation’s reputation is at stake as well. News reports or social media posts about defamation cases at work can hurt a company’s image. 

Defamation in the workplace needs to be addressed as soon as possible. Doing so will help avoid any further economic losses or reputational harm to the company. Most importantly, dealing with these defamation issues will help ensure mental health safety at work.

Employer responsibilities and preventative measures

According to Safe Work Australia, employers are responsible for managing risks to mental health in the workplace. We’ve seen a clear link between workplace defamation and mental stress, anxiety, and a sense of isolation. It falls to the employer to ensure that the workplace is free from defamation.

An organisation’s leadership and HR teams should come up with policies to help prevent and address incidents of defamation. Some follow-up action would be:

• supporting and promoting these policies through communication plans and training
• including training sessions on defamation in the company’s compliance measures
• setting the example by being mindful when speaking to and of others

The role of HR in addressing defamation claims

HR managers and their teams play a role in addressing defamation in the workplace. Here are some steps to take:

1. Establish clear policies on complaints handling.

Have robust policies in place. Convey them well to avoid any incidents of workplace defamation.

Start with a policy on complaints handling. That way, employees know what guidelines to follow if they have grievances or complaints. Airing their complaints at the proper venue can help reduce incidents of defamation. 

Policies on defamation should be in place, too. These should define what defamation is and outline the effects on others.

Visibility is key, so share these policies in onboarding packs and bulletin boards. Talk about them in staff meetings and team huddles. 

2. Provide training to raise awareness of defamation and its impact.

Most employees aren’t even aware of how damaging defamatory comments can be. Many think they’re harmless gossip, a way of letting off steam. It’s a fine line, and HR practitioners can help define that line. Creating awareness around defamation through training is an important first step.

Training programs can cover different areas such as:

• mindful communication
• how to share feedback
• professional conversations in the workplace
• defamation and its impact in the workplace

3. Monitor communications.

Keep an eye on written and verbal communication at work, including social media posts. Call out defamatory language when you see it. This is not about “naming and shaming”; it’s about bringing awareness to behaviour that could be considered defamatory.

Having a social media policy is important as well. Read this article for tips on what your social media policy should include.

Creating a respectful and defamation-free workplace

Having a safe, defamation-free workplace starts with a culture of respect and empathy. To build and maintain this culture, there are 3 action points that leaders and HR managers can take:

1. Set the example

Leaders set the tone for any corporate culture. If the top levels of management commit to uphold respect and consideration for others, the rest of the workforce will follow suit.

What does this look like?

• endorsing respect and zero tolerance for defamation

• communicating, reinforcing, and modelling these values (“walking the talk")
• promoting sessions on ethical leadership and accountability

A recent study has shown a link between corporate culture and unethical behaviour. It’s important to build a strong workplace culture based on respect, kindness, and empathy.

2. Engage employees in building a respectful workplace

Getting employees involved in this issue is just as important as leadership buy-in. Getting staff on board with creating a defamation-free workplace fosters a sense of ownership and accountability. Inclusive practices ensure that all voices are heard and valued, reducing the likelihood of defamatory behaviour.

Developing emotional intelligence (EI) in the workplace is at the heart of this strategy. High EI fosters empathy, self-awareness, and mindful communication. 

3. Recognise and celebrate positive behaviour

Celebrate the big and small wins whenever possible. Rewarding positive speech and action helps foster a culture of respect. This won’t happen overnight, so taking small and steady steps makes a huge difference.

Slow, steady action in curbing defamation in the workplace

When faced with a setback, take stock and assess: what could be done better? Was there a gap somewhere? Be prepared to make some difficult decisions if it comes to that point. Taking civil action is always an option for a defamation victim. Find out how the organisation can best support them, if appropriate.

Creating a defamation-free workplace calls for intentional and careful action. It all starts with creating awareness, building a culture of respect and empathy, and modelling positive behaviour. Take quick action with any missteps. Any positive change, no matter how small, goes a long way.

How does your team deal with defamation in the workplace? Share your experience in the comments