For companies, it is essential to consider how amendments to the Corporations Act 2001 concerning whistleblower laws will apply. A whistleblower is someone who works in an organisation and reports misconduct or illegal activity within the company. To encourage whistleblowers to come forward, the government introduced additional protections for whistleblowers in January 2019. As part of this, many employers need to revisit their whistleblower policy by January 2020. This article explains: 

  • who this legislation affects;
  • what the legislation protects;
  • whether you will need a whistleblower policy; and 
  • what the policy must include.

Who Do These Laws Affect?

If your business is a public company or a large proprietary company, you have until 1 January 2020 to implement a compliant whistleblower policy.

Whistleblower protections benefit a broad range of people, including current or former: 

  • employees, managers, current and directors (e.g. permanent, part-time, fixed-term or temporary employees, interns, secondees);
  • suppliers of services or goods (whether paid or unpaid) including their employees (e.g. contractors, consultants, service providers and business partners);
  • associates; and
  • relatives, dependents or spouses of the individuals mentioned above.

How Do These Laws Protect Whistleblowers?

1. The Whistleblower’s Identity Is Confidential

No one can disclose a whistleblower’s identity or information that is likely to lead to their identification. Under limited circumstances (for example, where it is required for an investigation), a whistleblower’s identity can be revealed to:

  • the Australian Securities and Investments Commission (ASIC), the Australian Prudential Regulation Authority (APRA), or a member of the Australian Federal Police;
  • a legal practitioner;
  • a person or body prescribed by the regulations; or
  • others with the consent of the whistleblower.

2. The Whistleblower Will Be Legally Protected

The law requires that no-one engage in conduct that is detrimental to the whistleblower (or another person) if the reason behind that conduct is that they:

  • know the whistleblower has made the disclosure; or
  • suspect the whistleblower could make a disclosure.

This protection also prohibits anyone from undertaking or threatening to undertake any detrimental conduct towards a whistleblower.

 Detrimental conduct includes: 

  • dismissing an employee;
  • altering an employee’s position or duties to their disadvantage; 
  • discrimination; 
  • harassment or intimidation;
  • harm or injury, including psychological harm; and
  • damage to property or a person’s reputation, business or financial position.

For example, an employer cannot dismiss an employee because they are concerned the employee may alert law enforcement to illegal behaviour within the business.

3. Whistleblowers May Receive Compensation

A whistleblower may seek compensation and other remedies through the courts if:

  • they suffer loss, damage or injury because of their disclosure; and
  • the company failed to take precautions that would protect the whistleblower from detrimental conduct.

4. Other Forms of Whistleblower Protection

A whistleblower is protected from any of the following in relation to their disclosure:

  • civil liability  (e.g. any legal action against the whistleblower for breach of an employment contract, confidentiality or another contractual obligation);
  • criminal liability (e.g. attempting to prosecute the whistleblower for unlawfully releasing information); and
  • administrative liability (e.g. disciplinary action for making the disclosure).

What Disclosures Are Protected?

A whistleblower can only benefit from these protections if they have reasonable grounds to suspect the information concerns:

  • misconduct relating to the company; or
  • an improper state of affairs relating to the company. 

Someone cannot expect to be protected if they do not have any reasonable grounds to suspect the company committed misconduct.

In short, the legislation will not protect people who make fanciful accusations.

Examples of matters that may be disclosed include:

  • fraud, money laundering or misappropriation of funds;
  • offering or accepting a bribe;
  • financial irregularities;
  • failure to comply with, or breach of legal or regulatory requirements; and
  • illegal conduct such as theft, dealing or use of illicit drugs, violence or criminal damage to property.

A whistleblower may also receive protection if they have reasonable grounds to suspect the information indicates the company, or an employee of the company, has engaged in conduct that:

  • constitutes an offence against the laws of the Commonwealth (not state or territory laws); or
  • represents a danger to the public or financial system.

The Act is clear that personal work-related grievances are not protected.

For example, if an employee harasses another, and the harassed employee discloses this to a company director, whistleblower protections do not apply. However, other protections, such as those under the Fair Work Act 2009, may apply.

Do You Need a Whistleblower Policy?

Not all companies will need a whistleblower policy. But, your company will be required to have a whistleblower policy by January 2020 if it is:

  • publicly listed;
  • a large proprietary company; or
  • within the superannuation industry.

A company will be considered a large proprietary company for a financial year if it satisfies at least two of the following conditions:

  • the consolidated revenue for the financial year of the company and the entities it controls is $25 million or more;
  • the value of the consolidated gross assets at the end of the financial year of the company and the entities it controls is $12.5 million, or more; and/or
  • the company and the entities it controls have 50 or more employees at the end of the financial year.

Within your whistleblower policy, you should include terms outlining:

  • information about whistleblower protections, including who can benefit from these protections and the kind of disclosures that are protected;
  • how disclosures must be made;
  • how the company will support and protect whistleblowers;
  • the company’s process of investigating any allegations;
  • how the company will ensure fair treatment of employees that are mentioned in disclosures; and
  • how the policy is available.

If you fail to have a whistleblower policy, you may receive a penalty of up to $12,600.

Key Takeaways

Whistleblower laws are crucial for protecting people who expose misconduct within companies. If someone makes a disclosure, you should respond carefully and ensure you afford them protection under the Act. Publicly listed companies and large proprietary companies must have a compliant policy by January 2020. If you need help responding to a disclosure or preparing a whistleblower policy, call LegalVision’s employment lawyers on 1300 544 755 or fill out the form on this page.

About LegalVision: LegalVision is a tech-driven, full-service commercial law firm that uses technology to deliver a faster, better quality and more cost-effective client experience.
Nathalie King

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