In a landmark development, a significant expansion of Australian whistleblower protections is now in full effect after the Treasury Laws Amendment (Enhancing Whistleblower Protections) Bill 2018 was passed earlier this year.
The provisions within this bill led to specific amendments to the Corporations Act 2001 (Cth) alongside amendments to several other Commonwealth Acts including:
- Taxation Administration Act 1953
- Banking Act 1959
- Insurance Act 1973
- Life Insurance Act 1995
- Superannuation Industry (Supervision) Act 1993.
The amendments are designed to provide greater protection and ability for whistleblowers who report information about alleged misconduct or an improper state of affairs in relation to companies and/or company officers.
The big changes
There are several notable amendments that you need to be aware of when reviewing or implementing your businesses whistleblower policies.
- The categories of informants who are protected by legislation has been extended to both current and former employees, contractors and suppliers as well as their family members.
- Whistleblowers can remain anonymous and retain their protection under this legislation.
- Making it a criminal offence and imposing heaving penalties (as much as $200,000 for an individual and $1 million for a body corporate) for disclosing the identity of a whistleblower without their consent, other than within the exceptions provided.
- While the disclosable conduct listed under the legislation has been expanded, a control has also been put in place limiting informants from reporting issues pertaining to personal work-related grievances.
- Restrictions have been added to specify those in an organisation who can receive reports of misconduct. These include senior managers, officers, lawyers, auditors, actuaries or other persons who have been authorised by the organisation.
- If deemed to be a matter of public interest or an emergency, whistleblowers may also make their disclosures to parliamentarians and journalists.
- The previous ‘good faith’ test has been replaced by the whistleblower only requiring ‘reasonable grounds’ to suspect wrongdoing.
- A requirement for public companies, large proprietary companies, and corporate trustees of superannuation funds to have a whistleblower policy from January 1, 2020.
What should be in your policy?
The amendments to legislation require several compulsory items are to be included in your organisation’s whistleblower policy for it to be compliant.
When drafting your company policy, you need to consider the following in accordance with section 1317AI of the Corporations Act 2001 (Cth):
- How are disclosures to be made and to whom?
- Which disclosures are protected?
- What support and protection is available to a whistleblower?
- How will the organisation investigate disclosures?
- What steps will the organisation take to ensure the fair treatment of any employees mentioned in the disclosure?
- Where the policy will be made available and maintained for use by employees and officers.
As best practice, you might also include the following:
- Define key terms within your policy such as ‘misconduct’, ‘protected matters’, ‘disclosure’, ‘fraud’ and other language that has specific legal meanings to ensure employees understand your policy.
- Highlight any auditing processes that your organisation undertakes to maintain transparency and protect against.
Failure to have a company policy in place from January 1, 2020 is a strict liability offence and carries a penalty of $12,600 for non-compliance. Corporations may also be liable for hefty civil penalties.
If you do not have a Whistleblower Policy in place or need to review it in line with these changes, you should do so as soon as possible.
When doing this, make sure your review is accompanied by:
- a reliable and anonymous reporting system to protect the identify of whistleblowers
- any measures available to ensure the identify of whistleblowers is protected
- training for personnel to ensure they can confidently respond to potential allegations in compliance with legislative requirements.
Any review and circulation of revised policies is likely to generate increase whistleblower activity.
It is a great opportunity for your organisation to show its commitment to best practice, transparency and a culture of integrity.
Ensure managers are equipped to answer questions relating to the policy and allow employees the opportunities to provide feedback on the changes if appropriate.
►For further information or queries on whistleblower policies, contact the CCIWA Employee Relations Advice Centre on (08) 9365 7660 or firstname.lastname@example.org.