New Australian whistleblower laws are in effect
The new Legislation affects 'regulated' entities in the corporate, financial and credit sectors and aims to encourage ethical whistleblowing and discourage white collar crime, while holding employers accountable for protecting eligible whistleblowers.
Passed by the Australian Government earlier this year, the Treasury Laws Amendment (Enhancing Whistleblower Protections) Act 2019 was put in place to amend the Corporations Act 2001 (Cth) and the Taxation Administration Act 1953 (Cth) and deliver an expanded whistleblower protection regime.
What are the changes?
- A broader range of internal issues can be disclosed by whistleblowers. Please note however, that protections will not extend to disclosures regarding personal employment or workplace grievances.
- More people can be 'eligible recipients' of disclosures. This includes senior managers, directors, auditors, commonwealth authorities such as APRA and authorised persons including whistleblowing hotlines.
- Disclosures can be made by a wider group of people. This includes current and former employees, officers, contractors, suppliers, associates of the entity and spouses/relatives of any of the above.
- Whistleblowers can make disclosures anonymously
- Stronger protections for whistleblowers (in limited circumstances) if they disclose to a journalist or Member of Parliament. This can be for public interest and emergency disclosures.
- Public companies and large proprietary companies have until 1 January 2020 to establish and implement a compliant whistleblowing policy. It is unlikely that existing whistleblowing policies will comply with the amended legislative requirements.
- A regulated entity can be liable to pay compensation to whistleblowers should they experience detriment following their disclosure.
What are the penalties for non-compliance?
Severe civil and criminal penalties will apply to any employer who is found to have breached their whistleblower protection obligations under the Corporations Act 2001. The amended laws will apply to disclosures even if the conduct occurred before the commencement date.
Should a person cause or threaten to cause detriment to a whistleblower or breach a whistleblower's anonymity, the following penalties apply:
- For a body corporate, a maximum of the greater of $10.5 million
- For an individual, a maximum of the greater of $1.05 million
From 1 January 2020, should your company be found to have a whistleblower policy that does not comply with the new section of the Corporations Act 2001 (Cth), a penalty of $12,600 may be administered. This applies to public companies, large proprietary companies and registerable superannuation entities.
What does my whistleblower policy need to include?
To comply with the amended legislation, a whistleblower policy must contain:
- The protections available to whistleblowers
- How and to whom an individual can make a disclosure
- How the company will support and protect whistleblowers
- How investigations into a disclosure will proceed
- How the company will ensure fair treatment of employees who are mentioned in whistleblower disclosures
- How the policy will be made available
The new whistleblower legislation is complex and carries some significant risks for companies that do not adhere to their obligations. It is essential that businesses take the time to thoroughly review their current whistleblowing policies and make adaptations according to the current legal requirements.
Does your business have the right protection in place?
For personalised, expert risk advice and quality insurance cover for your business, please contact your local Coverforce insurance broker today.
The information provided in this article is of a general nature only and has been prepared without taking into account your individual objectives, financial situation or needs. If you require advice that is tailored to your specific business or individual circumstances, please contact Coverforce directly.
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