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What the New Whistleblower Protections Mean for Your Business

New Whistleblower Protections Mean for Your Business

The recent banking Royal Commission revealed that even in Australia’s largest, most reputable companies, there can be misconduct and illegal behaviour which it is in the public’s interest to know about.

Some of the evidence to the Royal Commission was provided by ‘whistleblowers’, people within the organisations that appeared before the Commission who provided information to regulatory bodies about certain practises which they thought were illegal, immoral, corrupt or harmful, and which they thought should be brought into the light.

In response to the Royal Commission and some other similar cases, the Federal government has passed new legislation – The Treasury Laws Amendment (Enhancing Whistleblower Protections) Act 2019 (Cth) – which alters and expands the protection of corporate whistleblowers in Australia, currently provided for in Part 9.4AAA of the Corporations Act 2001 (Cth).

Coming into effect from July 1, 2019, the changes include a new requirement that public companies, large proprietary companies or corporate trustees of registrable superannuation entities, implement a privacy policy which specifically addresses the protections of whistleblowers.

Whatever the type or size of your organisation, this article is designed to help you work out whether the amendments apply to your business, how to comply with them and what else you may need to do to appropriately manage whistleblowers.

The key changes

The new legislation:

  • Expands the definition of ‘whistleblowers’ to cover officers, employees (paid and unpaid), individuals supplying goods and services (paid and unpaid) and their employees, an individual who is an associate of the regulated entity, and the relatives and dependants of the above;
  • allows and protects anonymous disclosure by whistleblowers;
  • removes the ‘good faith’ disclosure requirement which previously meant whistleblowers could not expect protection if their disclosure was not motivated by good faith;
  • provides whistleblowers with immunity from civil, criminal, or administrative liability for protected disclosures:
  • provides protection for disclosure to journalists or Federal MPs in certain circumstances, namely where it is in the “public interest”, or the information concerns “a substantial and imminent danger to the health and safety” of people or the “natural environment”;
  • introduces civil penalties for victimising or breaching the confidentiality of a whistleblower;
  • specifically excludes ‘personal, work-related grievances’ from protection.

It’s important to note that the new law applies to disclosures made on, or after its commencement, but can relate to conduct which occurs or “occurred before, at or after commencement”.

Whistleblower policies

Public companies and proprietary companies that are trustees of a superannuation entity must have a compliant whistleblower policy in place by January 1, 2020. Large proprietary companies have a deadline that is dependent on their financial year.

To be considered a large proprietary company, an organisation must satisfy at least two of the following criteria:

  • The annual consolidated revenue of the company and its related entities exceeds $25 million;
  • the value of consolidated gross assets that the company and its related entities control exceeds $12.5 million;
  • the company and its related entities have 50 or more employees.

As is clear from these provisions, the new law does not protect whistleblowers in small companies or those who make disclosures related to personal work issues. Some state anti-victimisation, anti-discrimination or equal opportunity laws may protect whistleblowers in either of these situations.

A whistleblower policy must address:

  • the definition of a whistleblower;
  • how the provisions in the new law protect whistleblowers, including the provisions of the Corporations Act;
  • a list of people who can make disclosures, as well as the people to whom disclosures can be made and how they can be made;
  • the type of disclosures that can be made;
  • information regarding how the company will support and protect whistleblowers, and information about their rights;
  • how the company will ensure fair treatment of employees who are mentioned in protected disclosures;
  • information about how the policy is to be made available throughout the company;
  • what actions the company will take to investigate disclosures.

Companies must also ensure a whistleblower’s identity remains anonymous when disclosures are made or face significant penalties, as well as potential criminal charges, if this is not the case. Exemptions remain for disclosures made to legal practitioners, ASIC, APRA and the AFP.

The new law increases civil and criminal penalties for any breaches, including a more severe civil penalty for failure to implement a whistleblower policy (at all, or by the deadline) and civil or criminal penalties for breaching the confidentiality of a whistleblower, or victimising one or threatening to do so.

The amendments are all designed to offer more security to whistleblowers and, in doing so, better protect the public interest. South Geldard Lawyers in Rockhampton can help your organisation formulate a compliant whistleblower policy and facilitate understanding of other implications of the new Act. Alternative, if you have a query about whistleblowing or the protections, Rockhampton commercial litigation lawyers can assist you. Contact us today on (07) 4936 9100 if you have any questions or concerns about issues raised in this article.

It is important to seek specific advice regarding your circumstances as this fact sheet provides general information only and does not constitute legal advice.