Recent changes to the Australian Whistleblowing landscape

The Treasury Laws Amendment (Enhancing Whistleblower Protections) Act 2019 received Royal Assent on 12 March 2019 and became law on 1 July 2019.   The legislation imposes a number of significant compliance obligations on all Australian corporations with additional obligations for publicly listed and large proprietary companies. 

One of the most significant changes to be introduced by the new Act is the type of conduct that, if reported by an eligible whistleblower, will trigger whistleblower protection obligations by the corporation.   Under the existing legislation, only contraventions (by the corporation itself or an officer or employee of the corporation) of a “provision of the Corporations legislation” would qualify for protection.  For example, a report by an employee of a straight forward case of occupational theft would not qualify for whistleblower protection because, on the face of it, theft would not represent a breach of the Corporations legislation.  

Disclosures that qualify for protection will be much broader in the amended Corporations Act and will include “misconduct, or an improper state of affairs or circumstances, in relation to the regulated entity” (Section 1317AA)    This means that any report of behaviour that would be considered ‘misconduct’ by an ordinary person would be likely to qualify for protection (Section 1317AADA provides an exception to this general principle for information provided by a discloser about “personal work-related grievances”).

Some of the other new provisions include:

• Broadening the classes of people a corporation must protect as whistleblowers to include suppliers and relatives of eligible whistleblowers and now including people who were formerly in those classes (Section 1317AAA);
• Mandating protection of a whistleblower even if the whistleblower seeks to remain anonymous – under the current provisions, the discloser must give his / her name prior to making the disclosure in order to qualify for protection (Section 1317AA);
• Creating a public interest and emergency disclosure option that provides for protection of an eligible whistleblower who makes a qualifying disclosure to a member of parliament or to a journalist in circumstances where the discloser believes, on reasonable grounds, that a previous report has not been acted upon (Section 1317AAD); 
• Making a corporation liable to pay compensation for detrimental conduct by an employee in defined circumstances – under the current provisions, only the individual engaging in the detrimental conduct is liable to pay compensation (Section 1317AD);
• Providing for a range of other orders that can be made by a court including: an order for an injunction to stop the detrimental conduct, an order that a person engaging in detrimental conduct make an apology to the person subjected to the detrimental conduct and an order for reinstatement of an eligible whistleblower who has been terminated (Section 1317AE);
• Providing a defence for corporations who are sued by an eligible whistleblower who has been subjected to detrimental conduct if the corporation ‘”took reasonable precautions, and exercised due diligence, to avoid the detrimental conduct” (Section 1317AE).

The new provisions require publicly listed and large proprietary companies to develop and communicate a whistleblower policy.   By 1 January 2020, corporations in those categories will be required to have such a policy and “make that policy available to officers and employees of the company”. (Section 1317AI). 

A company that is required to have a whistleblower policy but which fails to do so will commit an offence under the Corporations Act.  

The Act is specific about what is to be included in a whistleblower policy:

• Protections available to whistleblowers
• To whom disclosures that qualify for protection may be made
• How a qualifying disclosure may be made
• How the company will support whistleblowers and protect them from detriment
• How the company will investigate disclosures that qualify for protection
• How the company will ensure fair treatment of employees of the company who are mentioned in disclosures that qualify for protection
• How the whistleblower policy is to be made available to officers and employees of the company

The Act does not specify any requirement as to the channels by which a qualifying disclosure can be made to an eligible recipient other than in the framework for a whistleblower policy at Section 1317AI which stipulates such a policy must include “information about to whom disclosures that qualify for protection under this Part may be made, and how they may be made”.   While not therefore a compliance issue, it makes logical business sense for there to be a range of reporting options including:

• Internal reporting through the normal organisational structure in the ordinary course;
• One or more alternative internal reporting channels (e.g. to Legal, Internal Audit, HR or Compliance); and
• One or more external reporting channels.

RightCall is an independent, externally operated misconduct reporting service for Business, Government and Not-for-profit sectors.

It aims to provide employees and other relevant stakeholders an alternative to reporting misconduct concerns internally where:

• They do not believe such a report would be acted upon,
• Similar reports in the past have not been acted upon;
• The person to whom they would make such a report is suspected of involvement in misconduct; or
• They fear retribution by the organisation or a workplace colleague.

Many of RightCall’s clients use the name RightCall for their external misconduct reporting service. Some clients however prefer to use their own proprietary name and this is readily accommodated.

RightCall is a registered trading name of Newlan Investments Pty Ltd ATF the Newlan Family Trust ABN 48 764 861 786. Director of RightCall is Dean Newlan, a forensic accounting specialist with more than 30 years’ experience. Dean has consulted extensively in whistleblowing and misconduct reporting for more than 20 years.