Changes to whistleblower laws
July 08, 2019
Whistleblowers play an important role in identifying and calling out misconduct and harm to consumers and the community. Whistleblowers are generally people who report unlawful activities of a company or organisation. The Corporations Act 2001 (the Act) gives certain people legal rights and protections as whistleblowers.
From 1 July 2019, the whistleblower protections in the Act have been expanded to provide greater protections for whistleblowers, and widen the group of businesses who are required to have a whistleblower policy.
Businesses who are incorporated should take note of the key reforms, to ensure they are meeting their obligations under the Act.
- An expansion of the category of persons who can make disclosures, covering both current and former company employees, officers, and contractors, as well as their family members.
- Requirement to have Whistleblower Policy: Public companies, ‘large proprietary companies’, and corporate trustees of superannuation funds are required to have a whistleblower policy from 1 January 2020.
Large proprietary companies, are those companies which have at least two of the following:
Increasing of penalties: significant penalties apply for both corporations and individuals for noncompliance. Civil penalties for corporations can result in the greater of $10.5m, three times the benefit derived or detriment avoided, or 10% of annual turnover (up to $525m). Failure to have a policy is a strict liability offence and carries a penalty of $12,600 for non-compliance.
Reverse onus of proof: there is now a reverse onus of proof when a person seeks compensation, once they have established they have suffered detriment.
- Consolidated ‘Group’ revenue in excess of $50m;
- Consolidated gross assets of more than $25m; or
- 100 or more employees at the end of the financial year
Compliant Whistleblower policies
A whistleblower policy must include information about:
- the protections available to whistleblowers, including protections under the law
- to whom disclosures that qualify for protection under the law may be made, and how they may be made
- how the company will support whistleblowers and protect them from detriment
- how the company will investigate disclosures that qualify for protection under the law
- how the company will ensure fair treatment of employees of the company who are mentioned in disclosures that qualify for protection under the law, or to whom such disclosures relate
- how the policy is to be made available to officers and employees of the company
- any matters prescribed by the regulations (no regulations have yet been prescribed)
Businesses should take necessary steps to ensure that:
- Compliant Whistleblower policies are in place
- Appropriate procedures are in place to deal with disclosures
- Training has been provided to staff on the organisation’s Whistleblower policy, and to ‘eligible recipients’ on receiving / responding to disclosures.
If you have any further questions, please contact a HIA Workplace Adviser on 1300 650 620