New national Whistleblower laws came into effect from 1 July 2019.
All public companies and large proprietary companies have until 1 January 2020 to put into place a written policy with respect to the protection of whistleblowers. A penalty of up to $12,600 may be applied for non-compliance.
A large proprietary company is characterised by having any two of the following:
- $50m plus in consolidated revenue;
- $25m plus in consolidated gross assets;
- 100 or more employees.
To comply with Section 1317A1, the policy must contain:
- the protections available to whistleblowers;
- how and to whom an individual can make a disclosure;
- how the company will support and protect whistleblowers;
- how investigations into disclosure will proceed;
- how the company will ensure fair treatment of employees who are mentioned in whistleblower disclosures; and
- how the policy will be made available
In broad terms, the issue is one of corporate culture: all clients must have a policy in place and be prepared to foster a supportive and safe environment for staff. Ultimately, it is in the best interests of the corporation for breaches of the law to be brought to the attention of management before it is too late.
The overall aim of the legislation is to provide extended protection to whistleblowers in the corporate, financial and tax sectors. It aims to encourage ethical whistleblowing and discourage white collar crime. (A whistleblower must still act in accordance with the law: an example of unethical whistleblowing would be to use an unauthorised listening device to gather information).
The new protection extends beyond the exposure of criminal matters (eg fraud or the payment of secret commissions) to breaches of tax laws or ASIC and APRA laws and regulations.
The protection does not extend to matters deemed to be “personal” e.g. personal conflicts, disciplinary matters, transfer or promotion disputes and so forth.
The new legislation also extends the definition of persons to whom a disclosure can be made to include senior managers. In an urgent setting disclosure can be made to journalists or politicians if the matter is in the public interest.
In addition to the statutory codification, a company may owe a common law duty of care to its employees to prevent another employee from taking any action to a whistleblower’s detriment such as an act of vilification.
Penalties also apply for the disclosure of the whistleblowers identity. Further, any evidence disclosed by a whistleblower cannot used against them personally in a criminal investigation.
Training
Training should be provided for “eligible recipients” which includes senior managers, officers, and anyone else authorised by the company to receive disclosures from whistleblowers (such as Compliance officers). The training should cover the processes set out in the company’s whistleblower policy to respond to disclosures. Special attention should be paid to the importance of protecting the whistleblower’s right to anonymity during the investigation unless they consent to their identity being disclosed.
A second training program should be given to all staff. It should set out how the whistleblower regime works under the Act, and how the whistleblower policy provides a process for disclosing and investigating certain matters. It should also detail the protections that are to be provided to eligible whistleblowers.
With over 100 years of combined experience, Know Compliance experts are well-placed to assist clients with the drafting of their new Policy.