17 Jun WHISTLEBLOWER POLICY – ARE YOU FAMILIAR WITH THE CHANGES?

Recently, Australia’s whistleblowing laws have undergone a major revamp as the Commonwealth Government has passed the Treasury Laws Amendment (Enhancing Whistleblower Protections) Act 2019 (Cth) which amends several pieces of legislation including the Corporations Act 2001 (Cth) (“Corporations Act”).

When do the changes to the law commence?

Changes to the whistleblowing laws are set to commence as at 1 July 2019, however public companies, large proprietary companies and corporate trustees of registerable superannuation entities will have until 1 January 2020 to implement a compliant whistleblower policy.

Failure to implement a whistleblower policy in accordance with the required timeframe may attract a large penalty of up to $126,000.00.

What effect do the new whistleblower laws have?

The amendments to the whistleblower laws aim to harmonise the protections and remedies available to whistleblowers.  Some of the key changes to the whistleblower laws are set out below:

• The definition of an eligible “whistleblower” has been expanded. Previously, only current officers, employees, contractors and suppliers qualified for protection.  But now the definition includes former officers, employees, contractors and supplies and the relatives or dependents of those people.
• Whistleblowers are no longer required to provide their name when making a complaint as complaints can now be made anonymously.
• Whistleblowers will be provided with immunity from civil, criminal or administrative liability.
• Civil and criminal penalties may be imposed for breaching a whistleblower’s anonymity and engaging in detrimental conduct towards a whistleblower.
• There is no longer a requirement for the whistleblower to act in “good faith”.
• There is now a reverse onus of proof where an individual establishes that they have suffered detriment. This means that the respondent has to prove that the disclosure was not in any part a reason for their conduct.
• Whistleblowers will be protected from adverse costs orders being made against them where they seek compensation (unless the proceedings are instituted by them vexatiously or without reasonable cause).

Who is required to have a whistleblower policy?

As a result of the amendments to the Corporations Act, public companies, large proprietary companies and corporate trustees of registerable superannuation entities will now be required to have a whistleblower policy.  If they have an existing whistleblower policy in place, they will also be required to ensure that their policy is compliant with the new whistleblower laws, otherwise it will be considered to be non-compliant.

A company will be defined as “large proprietary company” in accordance with the Corporations Act, if it satisfies at least two of following thresholds within a financial year:

• an annual consolidated revenue in excess of $25 million;
• the value of consolidated gross assets are in excess of $12.5 million;
• 50 or more employees.

These thresholds are going to double from the commencement of the 2019-2020 financial year.

What type of disclosures can be made?

Previously, protected disclosures were limited only to contraventions of the Corporations Act.  The new whistleblower laws apply to the disclosure of information which a whistleblower has reasonable grounds to suspect “concerns misconduct or an improper state of affairs or circumstances in a corporate organisation”.  The types of disclosable matters that are protected include:

• conduct that amounts to an offence or contravention of corporations or financial services legislation;
• any other offence under Commonwealth law that is punishable by imprisonment for a period of 12 months or more; and
• conduct that represents a danger to the public or financial system.

Disclosures regarding personal work-related grievances (i.e. grievances which concern a whistleblower’s current or former employment) are excluded from protection. This may include, for example, an interpersonal conflict between a whistleblower and another employee or a decision to suspend or terminate a whistleblower or otherwise discipline them.

Who can disclosures be made to?

Whistleblower disclosures can be made to:

• officers or senior management of a company or related body;
• ASIC, APRA and other prescribed Commonwealth authorities;
• an auditor or actuary of the business; and
• any other person who is authorised to receive disclosures.

In certain circumstances, disclosures can also be made to members of parliament or journalists where it is in the public interest or in circumstances of emergency.

What does a whistleblower policy require to make it compliant?

The laws require a whistleblower policy to contain the following:

• information about how the policy will be made available to officers and employees;
• who can receive qualifying disclosures and how they can be made;
• how the whistleblower making the disclosure will be protected and how the company will support them;
• how the company will ensure fair treatment of employees who are mentioned in protected disclosures; and
• the investigative actions the company will take.

If you would like advice regarding how the new changes may affect you or you require assistance implementing or updating a whistleblower policy to ensure you are compliant with the requirements of the new laws, please contact us for comprehensive advice tailored to your company.

The content of this article is intended to provide a general guide to the subject matter.  Specialist advice should be sought about your specific circumstances.