Is Legal Professional Privilege Still Relevant for Workplace Investigations in 2026?
Updated for 2026: New Case Law and Practical Lessons
This article has been updated to include recent Federal Court commentary, Fair Work Commission decisions and practical guidance for councils, government agencies and SMEs conducting workplace investigations where legal professional privilege may be in issue. Original article can be read here
Many councils, government agencies, and employers still believe that hiring lawyers to carry out a workplace investigation automatically protects the process with legal professional privilege.
That idea is still risky.
Australian courts and tribunals keep confirming that simply having a law firm involved does not create privilege. The crucial question is whether the investigation is mainly to get legal advice or to get ready for a lawsuit.
By 2026, this problem has become more important because investigations now more often include:
- psychological and social risks
- accusations of bullying and harassment
- complaints about unwanted sexual behaviour
- reporting of wrongdoing by an insider
- code of Conduct breaches
- conflicts of interest
- fraud and corruption allegations
- unfair dismissal proceedings; and
- workers’ compensation and workplace conflicts
Employers who do not understand privilege may accidentally reveal sensitive information during lawsuits, Commission hearings, court reviews, and investigations.
The Key Legal Principle
The High Court’s decision in Esso Australia Resources Ltd v Commissioner of Taxation (1999) 201 CLR 49 is still the fundamental rule. Privilege applies only when the main reason for the communication or document is to get or give legal advice, or to use it in current or expected legal cases.
Who the investigator is does not matter.
If the primary goal of the investigation is to find out if rules were broken, if bad behaviour happened, or if someone should be disciplined, then privilege might not protect the information.
The Fair Work Commission Warning Employers Still Ignore
One of the most important workplace investigation decisions is Gaynor King [2018] FWC 6006.
The City of Darwin hired Minter Ellison to look into bullying claims. The Council later said the report was confidential because lawyers carried out the investigation.
Commissioner Wilson did not accept that argument.
The Commission looked into the real reason for the investigation and found that the main goal was to see if workplace behaviour rules and Council policies were broken, not to get legal advice.
The Commission also looked at how the employer acted: employees were told about the investigation, the accusations, and the results. Sharing this information weakened the claim of privilege.
That decision is still very important in 2026 because many organisations still organise investigations in ways that do not protect privilege.
Why Some Investigation Reports Remain Protected
Privilege applies when the investigation is done mainly to get legal advice.
In the cases Bowker, Coombe and Zwarts v DP World Melbourne Ltd [2015] FWC 7312 and Kirkman v DP World Melbourne Ltd [2016] FWC 605, the Fair Work Commission agreed that certain information was protected because the investigators were hired specifically to help lawyers give legal advice.
The Commission examined:
- the exact words used in the retainer
- the role of the lawyers
- the reason for the investigation
- how documents were managed
- whether findings were broadly disclosed; and
- whether the employer kept things confidential as they should
Privilege is determined by how things are organised, their goals, and how people behave—not by job titles or guesses.
Recent Federal Court Commentary (2023–2026)
The Federal Court’s decision in Diawara v National Australia Bank Limited [2023] FCA 1048 provides one of the most important recent clarifications. (Australasian Lawyer)
The case was about a claim of privilege over a cultural review report created during a discrimination dispute. The Court confirmed that:
- the dominant purpose test remains the central inquiry
- the focus is on why the person made or obtained the document
- the party claiming privilege must prove the necessary facts; and
- privilege can apply even if the document is used for secondary or additional purposes
The Court looked at the agreement between Herbert Smith Freehills and Wise Workplace Solutions and agreed that the main reason for the report was to help the lawyers legally advise NAB.
This decision confirms that privilege can be kept, but only when the evidence clearly shows that the main reason was legal advice.
Recent Oversight Commentary
A 2022 external review by the South Australian Ombudsman highlighted the importance of the dominant purpose test when evaluating claims of privilege over investigation materials. The Ombudsman said that if investigations mainly focus on gathering facts about employee complaints or policy violations, claims of privilege might fail unless the evidence clearly shows the investigation was for obtaining legal advice.
The Ombudsman also emphasised that labelling a document “privileged and confidential” does not make it privileged. Courts and oversight agencies will focus on the true nature of the work and the actual reason for the investigation.
Why This Matters for Local Government
The problem is especially serious for councils.
Local government investigations often include:
- councillor behaviour
- allegations against a senior executive
- code of Conduct matters
- complaints about bullying
- procurement concerns
- allegations of corruption
- protected disclosures; and
- conflicts of interest
Many councils believe that hiring outside lawyers guarantees privacy.
That assumption becomes a problem when things get to:
- The Fair Work Commission
- NCAT
- ICAC
- The NSW Ombudsman
- Legal process
- Public interest disclosure investigations; or
- Judicial review.
If privilege doesn’t apply, sensitive information might be exposed, including:
- draft findings;
- internal communications;
- witness credibility assessments;
- legal assumptions;
- procedural weaknesses; and
- governance failures.
The Practical Lessons for Employers in 2026
Organisations should not automatically assume they have special rights just because lawyers are investigating.
The safer approach is to separate:
- factual investigations
- disciplinary decision-making
- witness evidence collection; and
- legal advice.
Employers should get advice early on how to organise the investigation before choosing investigators.
- Retainer documents are important.
- How the investigation is carried out is important.
- How findings are shared is important.
- How reports are shared is important.
- How the organisation uses the report later may decide if the privilege continues.
Often, the best protection isn’t a privilege.
The best way to protect yourself is by carrying out investigations that are:
- procedurally fair
- impartial
- based on evidence
- properly documented; and
- capable of withstanding external scrutiny
The main lesson from the Commission, the Federal Court, and oversight authorities is still the same.
In 2026, organisations that still do not understand legal professional privilege may find out too late that their supposedly confidential investigation materials can be revealed during lawsuits or regulatory checks.
