Australia’s Raised Bar In Whistle-Blower Protection – New Time-Sensitive Requirement For Employers.

7 May, 2019

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Australia’s whistle-blowing laws and program launches on July 1st 2019. 

 

The expanded corporate whistle-blowing program provides Australian employees with potentially the highest level of disclosure protection globally.  Likewise, Australian employers will likely be setting a new standard.

 

While companies will have until January 1st, 2020 to implement a compliant whistle-blowing policy, best to prepare now as the amended laws will apply to disclosures even if the disclosed conduct occurred before the commencement date.  

 

These new provisions apply to protected disclosures made at any time, and if the victimization in respect of the disclosure occurs after the commencement date the new rules apply. Thus, the earlier commencement of the victimization provisions means that entities ought to update their whistle-blower policies and processes now to ensure no issues. 

 

The new law creates a consolidated and expanded whistle-blower protection regime, applying to all “regulated entities” in the corporate, financial and credit sectors[1] (meaning that it applies to essentially all employers). 

 

Broader range of disclosures:

 

• A broader range of conduct that can be reported and receive protection, meaning that conduct needs to concern “misconduct” or an “improper state of affairs”, (broadly defined);
• All disclosures can be made anonymously and do not need to be made in “good faith”, although the whistle-blower will need to have reasonable grounds for their concern;
• All disclosures about personal work-related grievances will only be protected in certain limited circumstances. This means that work-related complaints will only be protected if relating to systemic issues, or involving detrimental conduct to the whistle-blower. A disclosure of a work related complaint will also be protected if it is made to a legal practitioner to obtain legal advice or representation in relation to the whistle-blower provisions.

 

Broader range of who can disclose (is protected):

 

• Employees and officers;
• Contractors, suppliers and their employees;
• Individuals who are considered an associate (as defined in the Corporations Act) of the entity; and
• Spouses and relatives of any of the above. 

 

Well-articulated reporting channels:

 

• ASIC, APRA, and other prescribed Commonwealth authorities;
• Officers or senior managers of the entity;
• An auditor or actuary of the entity; and
• Persons authorized to receive disclosures (including a whistle-blowing hotline) 

 

More penalties for breaching anonymity, such as:

 

• $10,500,000 maximum fine, or
• 3 times that amount, or 10% of the annual turnover of the entity up to a maximum of $525 million (if proven that the benefit derived or detriment avoided because of the contravention)
• criminal punishment may also apply in certain cases

 

Specific corporate policy requirements, including published articulation of:

 

• How the policy will be made available
• How to make disclosures
• How the company will investigate
• How the company will prevent retaliation
• All protections to whistle-blowers

 

[1] The relevant whistle-blower disclosure laws in the Banking Act 1959, the Insurance Act 1973, the Life Insurance Act 1995 and the Superannuation Industry (Supervision) Act 1993 have been repealed and replaced by the new Corporations Act.

 

 

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