Whistleblower New Laws 1 July 2019
Whistleblower New Laws – 1 July 2019
Whistleblower protection laws aim to encourage disclosures that are in the public interest. In response to increased public desire for companies to be more accountable for their activities, the Australian government has acted to widen the scope of the federal whistleblower protection laws. As a result, the whistleblowing scheme in Part 9.4AAA of the Corporations Act 2001 (Cth) has recently been revamped by the passing of the Treasury Laws Amendment (Enhancing Whistleblower Protections) Act 2019 (Cth) (the “Amendments”).
What are the key changes of the Amendments?
The key changes include:
- Expanding the definition of ‘whistleblower’ accordingly to cover a broader group of informants including officers, employees, individuals supplying goods and services(whether paid or unpaid) and their employees (whether paid or unpaid), associates, and the relatives and dependents of any of the above mentioned;
- Allowing and protecting anonymous disclosures;
- Allowing the identity of whistleblowers to be protected;
- Providing immunity to whistleblowers from civil, criminal or administrative liability (such as disciplinary action) for making protected disclosures;
- Providing protection for disclosure to the media or a member of parliament in certain circumstances (emergency or public interest disclosures);
- Eliminating the requirement to make a disclosure in “good faith” so that motivation of whistleblowers cannot be taken into account when determining protected disclosure;
- Introducing civil penalties for victimising or breaching the confidentiality of a whistleblower;
- Introducing a reverse onus of proof where a whistleblower seeks compensation , once they have established they suffered detriment;
- Requiring public companies and large proprietary companies to entrench mandatory whistleblower policies with mandatory content; and
- Excluding ‘personal work-related grievances’ from protection.
What entities are affected?
The Amendments make it mandatory for all public companies, large proprietary companies and corporate trustees of registrable superannuation entities to have a whistleblower policy and to make that policy generally available to officers and employees of the company.
What is a large proprietary company?
A ‘large proprietary company’ is defined under section 45A(3) of the Corporations Act 2001 (Cth) as a company that meets or passes two of the three following thresholds:
- $25 million or more in consolidated revenue;
- $12.5 million or more in consolidated gross assets;
- 50 or more employees.
However, from 1 July 2019, new regulations at 1.0.02B of the Corporations Regulations 2001 (Cth) will redefine ‘large proprietary company’ as a company that meets or passes at least two of the following thresholds:
- $50 million or more in consolidated revenue;
- $25 million or more in consolidated gross assets;
- 100 or more employees.
This higher threshold effective from 1 July 2019 is intended to reduce the compliance and cost burdens of small proprietary companies.
What do you need to include in your whistleblower policy?
The Amendments require a whistleblower policy to contain information about the following:
(a) protections available to whistleblowers in general;
(b) to whom disclosures that qualify for protection may be made and how they may be made;
(c) how the company will support whistleblowers and specifically protect them from detriment;
(d) henceforth how the company will investigate disclosures that qualify for protection;
(e) how the company will ensure fair treatment of employees of the company who are mentioned in the disclosures that thereafter qualify for protection or to whom such disclosures relate; and
(f) also, how the policy is to be made available to officers and also employees of the company.
What are the penalties?
If a company breaches the confidentiality of a whistleblower’s identity or victimises or threatens to victimise a whistleblower, in effect fines of up to $1 million apply to companies engaged in the breach.
Companies that fall within the thresholds are advised to review their existing whistleblower polices to ensure compliance with the Amendments from 1 July 2019. Also, if they have not had a whistleblower policy in place, it is now time to implement a compliant whistleblower policy. In fact, failure to have a compliant policy in place by 1 January 2020 may incur a penalty of up to $12,600, to be enforced by ASIC.
Please contact us here if you would like assistance in drafting your compliant whistleblower policy or training your responsible employees or officers on the regulatory framework to ensure compliance with the new whistleblower laws.[porto_info_box icon=”fas fa-cloud-download-alt” icon_size=”32″ icon_color=”#ff7713″ icon_style=”circle” icon_color_bg=”#e8e8e8″ icon_border_radius=”500″ title=”Download Article in PDF Format” subtitle=”Click Here to Download” read_more=”box” link=”url:http%3A%2F%2Fkoffels.com.au%2Fpubs%2FWhistleblower-JH.pdf||target:%20_blank|” hover_effect=”style_2″]