On 12 March 2019, the Treasury Laws Amendment (Enhancing Whistleblower Protections) Bill 2019 (Cth) received Royal Assent (the Bill). The Bill provides greater protections for eligible whistleblowers who report wrongdoing in the corporate context. While the changes took effect from 1 July 2019, the new protections will also apply to some disclosures where the wrongdoing occurred before that date.
What are the new protections?
In summary, the Bill expands the existing whistleblower framework by:
- allowing for anonymous disclosures;
- extending the scope of people who are eligible to make protected disclosures to include former officers, employees and suppliers of the entity in question, and the family members of these people as well;
- amending the range of people who are eligible to receive protected disclosures to include officers or senior managers of the company, the company’s auditors, actuaries or another person authorised by the company and removing the person’s managers or supervisors;
- broadening the range of conduct which can be reported and receive protection to include bribery, corporate corruption, money laundering, fraud and terrorist financing;
- allowing for ‘emergency’ or ‘public interest’ disclosures to be made directly to the media or parliament in extreme cases;
- removing the requirement that the disclosure is made in ‘good faith’, provided that the whistleblower has objectively reasonable grounds to suspect misconduct or a contravention or an improper state of affairs or circumstances;
- reversing the onus of proof where an individual seeks compensation, once they have established that they suffered detriment; and
- expanding the remedies available to whistleblowers who suffer backlash by improving access to compensation.
These protections came into effect on 1 July 2019.
Do you need a whistle blower policy?
With the introduction of the Bill, the following entities must have a compliant whistleblower policy by 1 January 2020:
- public companies;
- large proprietary companies; and
- proprietary companies that are trustees of a registrable superannuation entity.
To determine whether your company is a ‘large proprietary company’ that will require a whistleblower policy, from 1 July 2019, your company will have satisfied at least two of the following paragraphs for a financial year:
- the consolidated revenue for the financial year of the company and any entities it controls is $50 million or more;
- the value of the consolidated gross assets at the end of the financial year of the company and any entities it controls is $25 million or more; and
- the company and any entities it controls have 100 or more employees at the end of the financial year.
Following 1 January 2020, a failure by such companies to have a whistleblower policy will be a criminal offence. The maximum penalty for not having a whistleblower policy will also be $126,000.
If your company does not meet at least two of the above criteria, it is considered ‘a small company’ and does not strictly require a whistleblower policy, although you are permitted to voluntarily implement one.
Even though these companies are not required to have a whistleblower policy before 1 January 2020, given the enhanced protections as outlined above apply from 1 July 2019, we recommend such companies act immediately to implement a new policy which addresses these changes.
Such companies should also consider providing additional training to ensure that potential eligible recipients of disclosures know how to identify a whistleblower report and what to do if or when they receive one.