As of 1 July 2019, the major provisions of the Treasury Laws Amendment (Enhancing Whistleblower Protections) Act 2019 (Cth) came into effect. These new whistleblower laws have been introduced to protect those who expose white-collar crime and other unethical business practices, as well as ensuring that employers who discourage whistleblowers are held accountable.
Employers in Cairns will need to be aware of these changes and the implications they could have on their policies in relation to whistleblowers.
What amendments have been made?
These changes provide stronger protections for whistleblowers. These include anonymity, increased immunities against prosecution, and protection against detriment through victimisation after making a disclosure. Specifically, some major amendments include:
- ‘Eligible whistleblowers’ may now include any person who has ever had a connection to a company, such as former employees or contractors, the employees of the contractors and even the relatives of those employees.
- The scope of who can be an ‘eligible recipient’ of disclosures has broadened and includes senior managers, directors and auditors.
- While the protections do not extend to disclosures relating to employment and workplace grievances, they may extend to breaches of tax laws, ASIC laws or APRA laws and this includes matters that are not necessarily illegal but that expose systemic cultural issues.
Under the new law, other changes mean that whistleblowers now only need to have “reasonable grounds” to suspect “misconduct or an improper state of affairs or circumstances”.
The legislation also provides for whistleblowers being able to make a protected disclosure to the media or members of parliament if no action is taken within 90 days, however, this is under limited circumstances.
Are there penalties for breaching a whistleblower’s anonymity?
Severe civil and criminal penalties for breaching a whistleblower’s anonymity, threatening to expose the whistleblower or engaging in detrimental conduct towards a whistleblower or potential whistleblower apply.
A company found in breach of the new laws could be liable for a fine of up to $10,500,000, with individuals facing fines of up to $1,050,000. A failure to comply with the provisions regarding confidentiality and detrimental conduct is punishable by fines and even imprisonment.
What does this mean for employers?
Public companies, large proprietary companies and proprietary companies that are trustees of a registrable superannuation entity have until 1 January 2020 to implement a whistleblower policy that complies with the amended legislation. Although these companies may have an existing whistleblower policy, they will need to be reviewed as it is unlikely that they will comply with the new legislative requirements. Not having a policy will attract a maximum penalty of $126,000, however, ASIC will maintain the power to exempt certain entities from complying with this requirement.
Employers should be mindful that the amended laws also apply to disclosures where the conduct occurred prior to the commencement of the legislation, however, the provisions relating to victimisation and compensation are only applicable to a disclosure made after the commencement of the legislation.
Who is eligible to make a protected disclosure?
A new, broader group of individuals will be able to make anonymous protected disclosures to a broader group of eligible recipients. The expanded group of eligible whistleblowers includes former employees, suppliers, contractors and the family members of these people and they will be able to make anonymous protected disclosures to:
- ASIC, APRA, and any other prescribed Commonwealth authorities;
- an auditor or actuary of the entity;
- officers or senior managers of the entity; and
- any person who is authorised to receive disclosures, which could include an individual working a whistleblowing hotline.
What should public companies, large proprietary companies and proprietary companies do next?
Public companies, large proprietary companies and proprietary companies that are trustees of a registrable superannuation entity will need to develop a new policy or update their existing policies to ensure they are compliant with the updated legislation.
The policy should be easily available to officers and employees (on the intranet, for example), and include:
- the protections that are available to whistleblowers, including protections under the Corporations Act;
- an outline of who can receive protected disclosures and how they can be made;
- information about how the company will investigate protected disclosures;
- an overview of how the company will support whistleblowers and protect them from detriment;
- what the company will do to ensure the fair treatment of employees who are mentioned in protected disclosures;
- information on where to find the policy; and
- any other matters that will ensure the policy is compliant.
With only a few weeks left for this action to be taken, the time to have this policy created is now. Get in touch with Cairns Employment Lawyers for further information.