New reforms to the Australian Whistle-blower Legislation

On 19 February 2019, new reforms to the Australian whistle-blower legislation were passed through parliament. These changes provide greater protections to those who bring corporate misbehaviour to light, crystallises the obligations of corporations and expands the reportable issues that qualify for whistle-blower protections.

To get technical, two pieces of legislation have been amended:

  • The Corporations Act 2001, to include a whistle-blower protection regime for the corporate and financial sector; and
  • The Tax Administration Act 1953 (TAA), to include a whistle-blower protection regime for disclosures of non-compliance with tax laws or tax avoidance.

What do these changes look like in practice? In a nutshell, it looks like this:

  • The categories of whistle-blowers who qualify for protection now include former officers, employees, suppliers and associates, as well as specified family members of employees and officers, suppliers and associates of the entity to which disclosure is made. Previously, protections were only afforded to current employees or officers of a company or a current contractor.
  • Greater requirements are in place to protect a whistle-blower’s identity, with immunities afforded to whistle-blowers from civil or criminal liability in respect to the information they disclose.
  • The ‘good faith’ requirement for disclosures has been eliminated, which means the motivation of whistle-blowers cannot be taken into account when determining if a disclosure qualifies for protection or not.
  • The scope of conduct that qualifies for protected disclosures has been expanded.
  • Greater protections and remedies are in place for whistle-blowers who suffer victimisation in relation to a disclosure, including compensation for whistle-blowers who are the subject of such retaliation.
  • A mandatory requirement for all public companies and large proprietary companies to have a whistle-blower policy in place.

The new whistle-blower legislation comes into effect on 1 July and with this comes a strict deadline for when public companies and large proprietary Companies are to have adequate whistleblowing Policies in place. Existing companies have a six-month period for policies to be in place (1 January 2020), with new companies to have policies in place no later than six months after becoming a large proprietary company.

What should companies do:

1. Get to work now on reviewing your existing Whistle-blowing Policy to ensure it complies with the new amendments. Note a policy should entail:

    • the protections available to whistle-blowers;
    • the person/organisations to whom protected disclosures may be made;
    • how disclosures can be made;
    • how the company will protect whistle-blowers from victimisation;
    • how the company will investigate protected disclosures; and
    • how the company will ensure fair treatment of persons who are mentioned in protected disclosures.

2. Review any internal resources who receive and investigate protected disclosures and assess if your current processes for handling disclosures are appropriate.

3. Provide additional training/communications to ensure your leadership teams (and any other relevant personnel) know how to identify a whistle-blower report and what to do if they receive one.

Consequences of failing to have a Whistle-blower Policy?

Failure to comply with the requirement to implement a whistle-blower Policy (Corporations Act only) is a strict liability offence of 60 penalty units ($12,600).

In light of the new Australian whistle-blower legislation, this is a good time to contact Magnetic People who can assist you in the development of your Company’s whistle-blower Policy. info@magneticpeople.com.au

 

General Advice Warning:
The information provided above is general in nature. It does not consider the specific needs of a business or an individual’s circumstances. For specific advice please contact Magnetic People Pty Ltd.

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