Recent events such as the raids on the ABC and other journalists have brought into focus the risks faced by whistleblowers who leak evidence of corruption or other serious crimes.
It is therefore somewhat timely that the federal parliament recently passed the Treasury Laws Amendment (Enhancing Whistleblower Protections) Bill 2019, which substantially bolsters whistleblower protections within the private sphere.
Who do the new laws apply to?
The Bill amends the Corporations Act and other legislation (new laws) by imposing strict whistleblowing protection obligations on the following regulated entities:
- companies or constitutional corporations
- certain financial institutions
- insurers (including life insurance companies)
- superannuation entities and trustees
- any associated entities of the above
The new laws do not apply to government departments, nor do they increase the whistleblower protections for commonwealth employees.
Key Effects
In essence, the new laws:
- allow the making of protected disclosures about a wider range of misconduct such as corporate corruption, fraud, bribery and money laundering, as well as other serious criminal offences that pose a danger to the public or financial system
- expand the types of persons who can make protected disclosures and be eligible for protection (e.g. former employees and/or family members of employees)
- permit and protect anonymous disclosures
- expand the protections available to whistleblowers who suffer reprisal, and significantly increase the compensation and penalties payable for such reprisal
- provide a reverse onus of proof on claims of compensation once a whistleblower has established they have suffered detriment due to reprisal
Whilst disclosures made in relation to employment or workplace issues such as bullying do not constitute protected disclosures under the new laws, they may be protected in certain circumstances by the General Protections provisions in the Fair Work Act.
Mandatory Whistleblower Policy
The new laws also require all public and large proprietary companies to implement a compliant whistleblower policy by no later than 1 January 2020.
To be compliant, the policy must contain:
- information about the protections available to whistleblowers
- information about how and to whom protected disclosures may be made
- information about the ways the company will protect whistleblowers from detriment
- information about how the company will ensure fair treatment of other employees mentioned in protected disclosures that qualify for protection
- information about how the company will investigate the content of protected disclosures
Timeframe for Compliance
The new laws take effect from 1 July 2019 and will apply to disclosures made on or after that date even if the disclosure related to conduct which occurred at a prior time.
More importantly, remedies available under the new laws (including compensation) will apply to disclosures made prior to the new laws taking effect provided that the disclosure was one that would have been protected had the new laws been in force at the time.
As noted above, public or large proprietary companies have six months to implement a compliant whistleblower policy.
Penalties
The penalties include:
- for a breach of confidentiality of a whistleblower’s identity or other form of reprisal, a maximum civil penalty of up to the greater of:
- for an individual, 5,000 penalty units (currently $1.05 million) or for a company, 50,000 penalty units (currently $10.5 million)
- three times the benefit derived or detriment avoided by the conduct
- where a company fails to implement a compliant whistleblower policy prior to 1 January 2020, a maximum civil penalty of up to 60 penalty units (currently $12,600)
- for any person found engaging in serious forms of reprisal or breaches of confidentiality may face significant criminal penalties including imprisonment of up to 2 years
Take Action
Given the substantial increase in protections afforded to whistleblowers and the risk of significant penalties for contraventions of these protections, businesses and employers must:
- ensure they have a compliant whistleblower policy in place prior to 1 January 2020
- alert employees to the existence and contents of this policy
- provide management and senior employees with training on the new laws and the employer’s whistleblower policy
- seek legal advice as soon as a protected disclosure has been made against it
More Information
Please call the leading employment lawyers in Parramatta, the Matthews Folbigg Workplace Solutions employment law team on 9635 7966 to speak with one of our employment lawyers if you require any assistance or advice.
