In brief - Public companies and large proprietary companies will need to comply, but all employers would be wise to have a compliant policy in place and consider training

The Treasury Laws Amendment (Enhancing Whistleblower Protections) Bill 2018 has passed through the Senate and is expected to be approved by the House of Representatives in mid-February 2019, introducing significant new whistleblower laws to the private sector. 

These reforms aim to help protect those who "blow the whistle" or make disclosures about corporate, financial or tax misconduct.

It is generally acknowledged that whistleblowers perform a vital role in the community in exposing fraud, corruption and other misconduct. Whistleblowing ensures that corporate entities and organisations are held to account and operate within the confines of the law. It is therefore necessary to protect whistleblowers and promote open, transparent and accountable practices within the public and private sectors.

Key elements of the proposed whistleblower laws

If enacted, the key elements of the legislation include:

  1. Expansion of whistleblower protection to current and former officers and directors, employees, contractors, suppliers, unpaid workers, and an employee's relatives or dependants.

  2. Expansion of the types of disclosures that will be protected in relation to corporate whistleblowers, including disclosures about "misconduct" or "an improper state of affairs or circumstances".

  3. Introduction of a whistleblower protection regime for protection of individuals who disclose breaches of tax laws and tax avoidance.

  4. Expansion of the group of people eligible to receive a disclosure, which now includes an officer or senior manager of the entity, an auditor, actuary, or regulators such as ASIC or APRA. 

  5. Replacement of the current "good faith" test with an objective test requiring that the whistleblower has "reasonable grounds to suspect" the wrongdoing.

  6. Employers will be comforted to know that “personal work-related grievances” will be excluded from protection. 

  7. Introduction of an "emergency disclosure" concept which provides protections for whistleblowers who report concerns to members of Parliament or to the media.

  8. A requirement that certain entities must have a whistleblower policy (see below for further information). 

  9. Allowing anonymous disclosures.

  10. Increased civil and criminal penalties for disclosing a whistleblower's identity (without consent) or victimising a whistleblower. 

  11. Expansion of the orders that can be made by a court in favour of a whistleblower suffering detriment to include apologies, injunctions, financial compensation and reinstatement. 

  12. Any whistleblower seeking court orders for detriment suffered bears the initial onus of proof to point to evidence that suggests a reasonable possibility that detriment has occurred. 

Certain entities must have a whistleblower policy that contains specific requirements

The legislation will require public companies and large proprietary companies to have a whistleblower policy in place. Failure to comply with this requirement is a criminal offence and significant penalties may apply.

The policy must contain: 

  • the protections available to whistleblowers, including the protections available under the legislation

  • how and to whom an individual can make a disclosure

  • how the company will support whistleblowers and protect them from detriment

  • how the company will investigate disclosures that qualify for protection under the legislation

  • how the company will ensure fair treatment of employees who are mentioned in whistleblower disclosures, and

  • how the policy will be made available

What should employers do to prepare for the new whistleblower laws?

Employers are encouraged to have a compliant policy in place in the lead up to the commencement of the new laws in early 2019, this includes reviewing any existing policies to ensure compliance with the changes or implementing a comprehensive new policy. 

Employers are also encouraged to consider appropriate training to deal with the new legislation, particularly for managers and supervisors who will be classified as recipients of a disclosure.

This is commentary published by Colin Biggers & Paisley for general information purposes only. This should not be relied on as specific advice. You should seek your own legal and other advice for any question, or for any specific situation or proposal, before making any final decision. The content also is subject to change. A person listed may not be admitted as a lawyer in all States and Territories. © Colin Biggers & Paisley, Australia 2024.