The Treasury Laws Amendment (Enhancing Whistleblower Protections) Bill 2018 (Cth) received Royal Assent on 12 March 2019, introducing strengthened and consolidated whistleblower protections for the corporate and financial sector.
These laws seek to improve corporate governance practices within Australian businesses and are aimed at providing greater protection for whistleblowers who assist in the early detection and prosecution of corporate or tax misconduct.
The Legislation commences on 1 July 2019 and applies to regulated entities, which include companies registered under the Corporations Act 2001 (Cth). It also includes a requirement for certain companies to have a compliant whistleblower policy in place by 1 January 2020.
Summary of the new whistleblower protection laws
The new laws will change and expand the previous whistleblower protection framework by:
- Broadening the types of disclosures that qualify for protection under the Corporations Act, including disclosures regarding misconduct or an improper state of affairs in relation to a regulated entity (e.g. corporate corruption, bribery, fraud, money laundering and terrorist financing).
- Removing the requirement for an individual to make a disclosure in good faith. Under the new regime an individual must simply have reasonable grounds to suspect misconduct or an improper state of affairs in relation to a regulated entity.
- Broadening the types of individuals who are eligible for whistleblower protection to current and former officers, employees, contractors and suppliers of the regulated entity, as well as any relative or dependent of those individuals.Changing who is eligible to receive protected disclosures to officers, senior managers, auditors and actuaries of a regulated entity, as well as regulators such as ASIC or APRA.
- Amending the Taxation Administration Act 1953 (Cth) to include specific protections for whistleblowers who disclose information regarding actual or suspected misconduct or an improper state of affairs in relation to an entity’s tax affairs.
- Permitting anonymous disclosures and the inclusion of an offence prohibiting the disclosure of an individual’s identity who has made a protected disclosure, or information likely to lead to their identification.
- Introducing emergency disclosure provisions that allow individuals who have already made a protected disclosure to report their concerns to a member of Parliament or a journalist subject to certain requirements having been satisfied.
- Excluding personal work-related grievances from protection under the regime. This covers matters regarding the discloser’s employment or former employment and includes any decision to suspend, discipline or terminate the discloser’s employment.
- Increasing civil and criminal penalties for individuals and body corporates who disclose a whistleblower’s identity without authorisation or victimise a whistleblower.
- Expansion of the types of orders a court may make to address any detriment suffered by a whistleblower to include compensation, apologies, granting of injunctions, and reinstatement of employment.
Whistleblower policies
The new laws require public companies and large proprietary companies to have a compliant whistleblower policy in place by 1 January 2020. There are significant penalties for companies that fail to comply with this requirement.
To satisfy the requirements of the legislation and be deemed compliant, a whistleblower policy must include the following information:
- The protections available to whistleblowers.
- How a person can make a protected disclosure.
- The persons and organisations eligible to receive protected disclosures.
- How the company will support whistleblowers and protect them from detriment.
- How the company will investigate disclosures that qualify for protection at law.
- How the company will ensure fair treatment of employees of the company that are mentioned in disclosures that qualify for protection at law.
- How the whistleblower policy is to be made available to officers and employees of the company.
What do you need to do?
The new whistleblower protection laws will apply to disclosures made on or after 1 July 2019, but may relate to matters that occurred before commencement of the new legislation.
Public and large proprietary companies must ensure they have a compliant whistleblower policy in place as soon as possible and by no later than 1 January 2020 to avoid penalties under the new legislation.
All companies need to be aware of the new whistleblower protection laws and provide their employees with appropriate and relevant training, particularly to officers and senior managers who will be eligible to receive protected disclosures under the new regime.
If you have any questions about the new laws or would like further information, please contact us as we would be happy to assist.
