Corporate whistleblowers to get better protection from 1 July 2019
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Corporate whistleblowers to get better protection

Corporate whistleblowers to get better protection

From 1 July 2019 new whistleblower legislation comes into effect creating better protection for whistleblowers under the Corporations Act 2001(Cth), Taxation Administration Act 1953 (Cth), Banking Act 1959 (Cth) and Insurance Act 1973 (Cth).

The changes apply to current and former employees and suppliers of public companies or large proprietary companies[1] making disclosures about wrongdoing by the entity. The protections extend to disclosures by family members of employees or suppliers and the range of misconduct about which a disclosure may be made will also broadened.

However this does not mean that all persons or disclosures will be protected. Litigation in this area to date often involves attempts to invoke whistle-blower protection for matters that are better described as workplace disputes or “personal work-related grievances” that should properly be addressed within the workplace. The new laws preserve this distinction while increasing the protections for eligible persons who make a protected disclosure about a regulated entity. 

One such case is currently before the Federal Court[2] involving an ex-employee of the Commonwealth Bank of Australia who claims that he was retrenched because of disclosures he had made under the protections provisions of the Corporations Act. The disclosures related to allegations of a scheme in which other employees were making false claims in order to boost their bonuses and bullying complaints about his manager. The CBA denies the bullying allegations and claims that the former employee does not qualify for whistleblower protections. The parties have been ordered to attend mediation so the case has not yet been determined.

There are significant implications for companies that breach the new laws, both in terms of financial penalties and rectification orders (such as reinstatement).

The legislation also provides that companies to whom the laws apply must have a policy in place (by 1 January 2020) that sets out information about whistleblower protections, including information such as[3]:

  • the protections available to whistleblowers
  • how and to whom protected disclosures may be made
  • how the company will support whistleblowers and protect them from detriment
  • how the company will investigate disclosures
  • how the company will ensure fair treatment of employees
  • how the policy is to be made available to officers and employees of the company

     

    While not all companies have to comply with the new laws, all employers should have a company policy that addresses reporting of corrupt or illegal conduct. For small to medium size businesses this policy can be very simple and be easily incorporated into a suite of existing policies.  A simple but effective whistle blower policy is one that clearly defines what whistle blowing is, how it will be actioned or escalated and how employees raising such issues will be protected from victimisation.

     

Lessons for employers

  • Understand whether the new laws apply to your organisation
  • Put procedures in place to identify an eligible whistleblower, what constitutes a protected disclosure and to whom the disclosure should be made
  • For all employers – whether or not the laws apply- ensure you have a comprehensive whistleblower policy
  • If unsure seek advice

 

 

 


[1] Large Proprietary Company: A proprietary company is a large proprietary company for a financial year if it satisfies at least 2 of the following at the end of the financial year: (a) consolidated revenue of $50 million or more; (b)  consolidated gross assets of $25 million or more; (c)  100 or more employees.

[3] Section 1317AI (5) Treasury Laws Amendment (Enhancing Whistleblower Protections) Act 2019

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