On 1 July 2019, the whistleblower protection regime in Australia was expanded to include the corporate, financial and tax sectors. In this article Kayla Scott discusses the implications of these recent changes.
The Treasury Laws Amendment (Enhancing Whistleblower Protections) Act 2019 makes significant reforms to the Corporations Act 2001 (Cth) and the Tax Administration Act 1953 (Cth) affecting almost all companies. This will include not for profit organisations that are structured as public companies limited by guarantee.
reforms that are of key importance include:
- Protected disclosures may relate to more than just criminal breaches, such as breaches of tax, ASIC and APRA laws. Conduct that is not illegal but demonstrates universal issues will also be disclosable. However, the protections will not extend to disclosures about personal employment or workplace grievances, such as interpersonal conflicts, transfer, promotion or disciplinary decisions.
- The classifications of people who can be ‘eligible whistleblowers’ has increased, and now includes anyone who has ever been in a relationship with a company (such as former employees, contractors, employees of contractors, associates, and relatives of such individuals).
- The classifications of people who can be ‘eligible recipients’ of disclosures has also increased, including senior managers, directors and auditors; and in certain circumstances, even journalists and politicians.
- There are now stronger protections for whistleblowers, including increased immunities against prosecution, anonymity, and protection against detriment through victimisation. Whistleblowers are no longer required to act in good faith to be protected (although they need to have reasonable grounds to suspect misconduct).
civil and criminal penalties will apply to employers who breach those
protections, and courts are empowered to make orders for relief against a
company if they fail to fulfil a duty of care to protect a whistleblowing
employee from detriment.
The maximum penalties imposed under the new regime for breaching confidentiality of an eligible whistleblower’s identity or causing or threatening detriment include:
- individuals: up to $1.05 million (5,000 penalty units)
- companies: $10.5 million (50,000 penalty units), or 10% of the annual turnover (up to $525 million or 5 million penalty units).
To ensure compliance by 1 January 2020, public companies, large proprietary companies, and corporate trustees of APRA-regulated superannuation entities are required to have a whistleblower policy that is compliant with the new section 1317AI of the Corporations Act 2001 (Cth). Despite only certain companies requiring a whistleblower policy, we strongly recommend that all companies regulated under the new regime create or update their whistleblower policy. Due to the complex nature of the new whistleblower legislation and the severe penalties that apply, many clients are working with us to prepare whistleblower policies now so that they can properly deal with disclosures from 1 January 2020.
implementing a whistleblower policy carries a $12,600 penalty for
non-compliance and applies to public companies, large proprietary and
registerable superannuation entities.
What should be included in your policy?
comply with section 1317AI, your whistleblower policy must include the
- the protections available to whistleblowers
- how and to whom an individual can make a disclosure
- how the company will support and protect whistleblowers
- how investigations into a disclosure will proceed
- how the company will ensure fair treatment of employees who are mentioned in whistleblower disclosures
- how the policy will be made available.
We recommend that employers provide training to ‘eligible recipients’ that covers the process set out in the company’s whistleblower policy to respond to disclosures, and training for all staff setting out how the whistleblower regime works under the Treasury Laws Amendment (Enhancing Whistleblower Protections) Act 2019.
that if you have a current policy that it is up to date.
we strongly encourage that all companies action their policies well before 1
How can we help?
Our team has significant experience across all aspects of employment and whistleblower laws and can provide you with solutions that will assist you to confidently comply with the Treasury Laws Amendment (Enhancing Whistleblower Protections) Act 2019.
If you would like to find out more about the new whistleblower regime contact our Business Law team on 02 6285 8000 or by email.