New Whistlebower Protection Laws – Are you ready?
The Treasury Laws Amendment (Enhancing Whistleblower Protections) Act 2019 received royal asset on 12 March 2019 and commenced operation on 1 July 2019.
The new legislation provides greater protection and remedies for those who ‘blow the whistle’ on corporate, financial and/or tax misconduct.
Furthermore, the new legislation expands the scope of disclosable matters and increases the obligations on companies to comply.
Who does it affect?
The whistleblower legislation affects all companies, including foreign corporations, trading or financial corporations formed within the limits of the Commonwealth as well as ADIs, NOHCs, super funds and insurers (Regulated Entities).
What are the key changes?
The new laws introduce the following key changes:
- They expand the definition of ‘eligible whistleblowers’ to include current and former employees, officers, suppliers, contractors and employee’s relatives or dependants.
- Furthermore, the new laws allow protected disclosures to be made about a range of corporate misconduct or an improper state of affairs, but exclude most disclosures of personal work-related grievances from protection.
- The new laws also introduce an ’emergency disclosure’ concept which provides protections for whistleblowers who report concerns to members of parliament or the media.
- The protection for eligible whistleblowers has been increased by allowing anonymous disclosures and expanding the prohibition against victimisation or detriment towards them.
- Furthermore, the penalties for breaching whistleblower protections have increased, (currently up to $10.5 million). In addition, courts now have the power to make more wide ranging orders in favour of whistleblowers suffering detriment such as injury, dismissal and harassment. These additional orders may include apologies, injunctions, financial compensation and reinstatement.
- Finally, the new laws require certain companies to have a whistleblower policy.
Requirement to have a whistleblower policy
The new laws require only some Regulated Entities being public companies, large proprietary companies and proprietary companies that are the trustees of registrable superannuation entities to have a whistleblower policy.
The criteria for being a large proprietary company have recently been amended.
A proprietary company will be classified as large if it satisfies at least two of the following:
- Consolidated revenue per financial year of company and entities it controls $50 million or more
- Consolidated gross assets of company entities it controls $25 million or more
- Number of employees of company and entities it controls $100 million or more
A whistleblower policy must address and set out the following:
- The protections available to whistleblowers;
- To whom disclosures that qualify for protection may be made and how;
- How the company will support whistleblowers and protect them from detriment;
- How the company will investigate disclosures that qualify for protection;
- How the company will ensure fair treatment of employees of the company who are mentioned in disclosures that qualify for protection, or to whom such disclosures relate; and
- How the policy is to be made available to officers and employees of the company.
Failure to have a whistleblower policy in place by 1 January 2020 will be an offence under the new laws.
Whilst it is not mandatory for small proprietary companies that do not fall within the above mentioned categories to have a whistleblower policy in place, given that they are otherwise obligated to comply with the new laws, we strongly recommend that all Regulated Entities create or update their whistleblower policy.
I am a business owner, what should I do now?
First of all, you must ensure that your business understands its obligations under the new legislation, including what to do if a protected disclosure is made.
Public companies, large proprietary companies and proprietary companies that are the trustee of a registrable superannuation entity must and other companies should contact their solicitors in order to have their whistleblower policy reviewed and to assist them with the implementation of a whistleblower policy that is compliant with the new laws by 1 January 2020.
Important Disclaimer: The content of this publication is general in nature and for reference purposes only. It is current at the date of publication. It does not constitute legal advice and should not be relied upon as such. Legal advice about your specific circumstances should always be obtained before taking any action based on this publication.