Whistleblower Protections In The Private Sector

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Home > Blog > Whistleblower Protections In The Private Sector

There are a number of reasons why a whistleblower may decide to make a protected disclosure, including to expose unlawful activity or bring to light conduct that may be harmful to the environment or public at large.

In the private sector, there are protections in place so that whistleblowers cannot lawfully experience ramifications due to their decision to expose unlawful or harmful conduct. Here is what you need to know about these protections.

Protected disclosure schemes

Protected disclosure schemes exist to provide whistleblowers with protections in an effort to encourage people to report misconduct and wrongdoing.

The Corporations Act governs this area of the law and mandates that large, privately-owned companies and publicly listed companies must have in place a whistleblower policy that outlines the relevant information about protections available, what the company will do to support and protect whistleblowers, and the investigations process for protected disclosures.

Who are whistleblowers?

Under the Corporations Act an eligible whistleblower includes anyone who is:

  • an employee, associate or officer;
  • the spouse, relative or dependent of an employee, officer, supplier or contractor; and/or
  • a supplier or contractor to the business, or the employees of a supplier or contractor.

Who can disclosures be made to?

Protected disclosures must be made to an ‘eligible recipient’ which, under the Corporations Act includes:

  • an officer (such as a company secretary or director);
  • an auditor or actuary;
  • ASIC or APRA; or
  • others within the business who are authorised to receive disclosures, such as a senior manager.

What can a whistleblower disclose?

Whistleblower disclosures must pertain to serious misconduct or systemic issues, including those that pose a threat to the public or are otherwise against the law.

Protection is afforded to whistleblowers who make disclosures about entities that are regulated, such as:

  • companies;
  • corporations;
  • authorised deposit-taking institutions (including banks and credit unions); and
  • some superannuation entities, insurers and trustees.

Personal grievances (such as interpersonal conflict) are not considered protected disclosures, however, they are not mutually exclusive and a whistleblower may also have a personal, work-related grievance as a result of unlawful conduct or a systemic issue.

Under the Corporations Act, a whistleblower must have reasonable grounds to believe that the disclosure pertains to a business’ misconduct or improper circumstances whilst conducting business. The whistleblower does not need to be able to prove the misconduct, but some protected disclosure schemes will require the whistleblower to have reasonable grounds to suspect the disclosure if true and correct.

What protections are in place for whistleblowers?

A key feature of many protected disclosure schemes is the obligation to protect the identity of whistleblowers and prohibit their victimisation.

Under the Corporations Act, the victimisation of a whistleblower is categorised as causing detriment or threatening to cause detriment due to a whistleblower’s disclosure or suspected disclosure. ‘Detriment’ in this context includes:

  • termination of employment;
  • demotion or a change in the employee’s duties, which is to their disadvantage;
  • discrimination, harassment or intimidation;
  • physical and/or psychological harm and/or damage, including to the whistleblower’s financial position or reputation.

Whistleblowers are also protected from any civil, criminal and administrative liability arising from making the disclosure, but they will not necessarily be protected from liability for any conduct revealed by the disclosure.

In any criminal or civil proceedings brought against the whistleblower, information obtained through a protected disclosure is not admissible in evidence.

Other protections exist for whistleblowers including protections against a contractual or other type of remedy being enforced or exercised against the whistleblower because they made the disclosure. For example, the whistleblower cannot be accused of breaching a term in their employment contract because they made the disclosure.

Some protections may require additional qualifying criteria to be satisfied, such as the ability to make an emergency disclosure or an anonymous public interest disclosure to a journalist or member of parliament.

Whistleblowers who are victimised may be able to seek compensation for damages incurred.

What penalties exist for people who breach whistleblower protections?

Civil and criminal penalties exist in many protected disclosure schemes victimising a whistleblower and/or breaching confidentiality obligations.

Criminal penalties include up to six months imprisonment for an individual who discloses a whistleblower’s identity and civil penalties include fines of:

  • up to $13,750,000;
  • three times the benefit that was derived or the detriment avoided because of the disclosure; or
  • 10 percent of the company’s annual turnover (capped at $687,500,000).

Do whistleblower protections exist outside of the private sector?

Yes. There are protections in place across jurisdictions, industries and sectors (public, private and not-for-profit); all of which share similar principles but are not identical. It is important to ascertain which protected disclosure scheme applies so that the whistleblower’s employer is aware of how the whistleblower is protected. The nature of the misconduct being disclosed will also play a part in determining which scheme applies.

If you are considering making a disclosure, you have already done so and would like to understand how you will be protected going forward or you have been victimised as a result of making a disclosure and would like to seek compensation, our experienced employment lawyers in Cairns can assist.

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