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Time to Whet your Whistle
Date : 15 May 2019
Author/s : Laura Hartley, Julie Allen
Type : Focus Paper
 

 

Sailing through parliament, the impending whistleblower amendments are due to commence on 1 July 2019. But stormy seas abound for public and large proprietary companies, who will be required to amend their existing whistleblower policies to comply with the new legislation.


History


Federal Whistleblowing legislation was introduced into the Australian landscape in 2013 to provide protection for an insider (being an officer, an employee or a contractor) after they notified their organisation of alleged misconduct within their organisation.


There has been considerable dissatisfaction within the rank and file over the years as to the shortfalls within the legislation. After a long debate and considerable public consultation, the Treasury Laws Amendment (Enhancing Whistleblower Protections) Bill 2018 was introduced, to plug the holes in the legislative suite.


The amendments expand the protection for whistleblowers in the private sector, and increase penalties applicable if retribution is meted out against whistleblowers. There are also new obligations which must form part of whistleblower policies for any regulated entity.


Who is an eligible whistleblower now?


The expanded definition of “whistleblower” is quite broad to include any person who is, or has been:

 

  • an officer or employee (paid or unpaid);
  • an individual who supplies goods or services (paid and unpaid).


It also includes any relatives of those individuals.


Anonymous disclosures are now also allowable.

 

Eligible recipient


The legislation allows eligible whistleblowers who make a “protected disclosure” to an eligible recipient (which is defined as an officer, senior manager, auditor, actuary, lawyer, regulator or other person who is authorised by the entity) to be eligible for protection provided they are reporting about “misconduct or an improper state of affairs or circumstances”. This term is not limited to particular types of conduct and is much broader than the previous protection, which was limited to Corporations Act breaches.


Interestingly, the Senate has amended the original Bill to exclude certain “personal work related grievances” from protection. This was largely in response to concerns that disgruntled employees would otherwise be overly empowered by the legislation for matters which concerned their own employment issues and performance. This exception however, does not include victimisation which may have occurred due to being a whistleblower, which is clearly within the scope of the legislation.


The legislation also removes the requirement to act in good faith. This means the motivation of the whistleblower is no longer relevant to determining as to whether a disclosure is protected. To be protected, a whistleblower only needs to have “reasonable grounds to suspect” wrongdoing.


Penalties and Legislation


Something that always commands attention of companies is the increase in penalties that may be payable. Notably, penalties for retaliation against whistleblowers and publishing the identity of a whistleblower have had a significant hike. An individual who either retaliates or discloses the identity of a whistleblower can be penalised up to $1.05m or three times the benefit derived or detriment avoided and a company can be penalised up to $10.5m, three times the benefit derived or detriment avoided or 10% of annual turnover (up to a maximum of one million penalty units).


The requirement to have a whistleblowing policy is a strict liability offence with a penalty of 60 penalty units (currently $12,600).


What do I need to do?


If you are working within a public or large proprietary company and you work in legal or compliance, you’re almost certainly going to need to update your whistleblowing policy to comply with the reforms.

 

  1. Update your policy
    Your policy should be reviewed and provide information about protections available to all whistleblowers, how to make a disclosure and how your company will ensure fair treatment for affected employees who are mentioned in the disclosure. The policy should also detail the procedures for investigation and how the policy will be communicated.
     
  2. Communicate your policy
    Making employees and officers aware of your policy is a vital step in ensuring an effective policy. Putting the updated policy in a prominent place on the intranet, or any supplier portals may also assist and following up with appropriate training.
     
  3. Start now
    Although the requirement for a compliant whistleblowing policy commences on 1 January 2020, employers must comply with the legislation from commencement on 1 July 2019. Accordingly, to ensure that any whistleblowing complaints are dealt with in accordance with the legislation, reviewing your policy and updating the procedures now is advisable.

Feel free to contact us if you need help in implementing any of these steps.
 

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