After a long time in the works, the Treasury Laws Amendment (Enhancing Whistleblower Protections) Act 2019 (Cth) (Whistleblower Act) finally came into effect on 1 July 2019 in an effort to strengthen protections for whistleblowers.
This article sets out what you need to know.
The Whistleblower Act makes a number of key changes to the Corporations Act 2001 (Cth) and the Taxation Administration Act 1953 (Cth) that will impact nearly all companies.
The main changes include:
- expanding the entitles that are caught (previously limited or related to governmental bodies and agencies);
- expanding the definition of an eligible whistleblower to cover individuals who are related to the company and wish to make a disclosure. This now includes relatives of employees, former employees and contractors etc.;
- expanding the topics that can fall within a protected disclosure (i.e. beyond criminal breaches);
- tightening the confidentiality controls imposed on companies regarding the identity and contents of any disclosure made by a whistleblower, and increased penalties for breaching these obligations;
- clarifying the prohibition on victimising whistleblowers in the workplace, and increasing penalties for a breach; and
- enabling managers and senior executives to act as whistleblowers and make disclosures in relation to company misconduct. Which business are affected? Nearly all. For example, the protections affect:
- life insurance companies; and
- superannuation entities and trustees.
We also note that public companies and large proprietary companies have an additional obligation to prepare and implement a whistleblower policy (discussed further below).
NB: A large proprietary company is defined as a company that has any two of the following: $25+ million in consolidated revenue; $12.5+ million or more in consolidated gross assets; or 50+ employees (inclusive of any entities it controls).
What are captured business required to do?
In order to ensure that your business complies with the new changes, we strongly recommend that you:
- train your employees on both their whistleblowing protections personally and their obligations as receivers of protected disclosures;
- review your current processes regarding whistleblowing and any policies that may overlap with whistleblowing (i.e. grievance policy etc.);
- prepare a whistleblower policy; and
- explore third-party whistleblower systems that could be utilised to receive disclosures.
NB: Although we recommend all businesses have one, public companies and large proprietary companies are legally required to implement a whistleblower policy by 1 January 2020, and to ensure that it covers particular elements set out in the Whistleblower Act.
Penalties for non-compliance
Breaches of the Whistleblower Act are very severe, with the possibility of both civil and criminal penalties being imposed for any contraventions. For example, breaching the confidentiality of an eligible whistleblower’s identity or exposing the contents of any disclosure they have made anonymously include a penalty:
- for individuals – up to $1.05 million and / or maximum two years’ imprisonment; and
- for companies – up to $10.5 million, or 10% of its annual turnover (up to $525 million).
In light of the above, this is not an area that you want to risk contravening. Next steps In the coming months prior to the compliance date of 1 January 2020, Law Squared will be preparing a precedent whistleblower policy for all AMCA members.
This policy document will cover your obligations (where members are covered under the new Whistleblower Act) but it is important that members tailor this document to suit your own business.
If you would like to talk with a lawyer to determine whether your business is captured under the new laws, please contact Catherine Brooks at email@example.com.