Whistleblower protections in the corporate sector have been bolstered by new amendments designed to encourage the disclosure of corruption, fraud, tax evasion, and misconduct. Most notably for industrial relations practitioners, the amendments have introduced mandatory requirements for larger companies to implement an appropriate whistleblowing policy by January 2020. It is expected that these changes will see an increase in the number of disclosures in the corporate, financial and credit sectors.
The key changes, including the new mandatory whistleblower policy rule, are detailed below.
Reduced burdens on the whistleblower
Previously, whistleblowers were required to show that disclosures were made in ‘good faith’ in order to be immune from legal action. This involved proving that disclosures were honest, genuine, and motivated by wanting to disclose misconduct.
The new laws now only require “reasonable grounds to suspect wrongdoing” for whistleblowers to gain immunity.
Increased protections for whistleblowers
Whistleblowers are entitled to have their anonymity maintained, and to be protected from individuals who may cause or threaten detriment.
In addition, eligibility to make protected disclosures (ie, genuine disclosures about improper conduct) has been expanded to include current or former employees to officers of a company that the disclosure is about (or a related company), along with contractors, a contractor’s employees and relatives of eligible whistleblowers.
Individuals may be fined up to $1.05m and companies may be fined up to $10.5m where they either:
- Breach the confidentiality of a whisleblower’s identity; or,
- Victimise or threaten to victimise a whistleblower.
Mandatory whistleblower policy
Large companies are now required to implement a whistleblower policy. These are defined as companies which meet at least two of the following criteria:
- Consolidated revenue of at least A$25m;
- Consolidated gross assets of at least A$12.5m; or,
- At least 50 employees within the company and the entity it controls.
This policy must cover all employees, contractors, suppliers and relatives of employees, both past and present. It should include information about the following:
- Protections available to whistleblowers;
- The person/organisations to whom protected disclosures may be made, and how they can be made;
- How the company or organisation will support whistleblowers and protect them from detriment;
- How the company or organisation will investigate protected disclosures;
- How the company or the organisation will ensure fair treatment of employees who are mentioned in protected disclosures, or to whom such disclosures relate;
- How the policy is to be made available to officers and employees of the company; and,
- Any other matters prescribed by the regulations from time to time.
The whistleblower policy must be in place before 1 January 2020, otherwise fines of up to $12,600 may be imposed.
If you require assistance understanding the implications of these new amendments for your company, or require assistance drafting a compliant whistleblower policy, contact JFMLAW on 02 9331 0266, or simply fill out the contact form below.