Written by: Edwin Choi
In December 2007, a bill was introduced into parliament amending Australia’s private sector whistleblowing laws. In particular, the Treasury Laws Amendment (Enhancing Whistleblower Protections) Bill 2017 (‘the Bill’) proposed to amend the Corporations Act 2001 to strengthen and consolidate whistleblower protections.
Some key amendments that should assist to promote corporate accountability in the private sector include:
- Allowing whistleblowers to make anonymous disclosures. Arguably, a whistleblower’s biggest fear is being discovered. Once their identity is revealed, they are exposed to losing their job, reputation damage and employment difficulties. Thus, disclosing potentially detrimental information about a corporation is risky, as it may impair their personal and financial lives. Allowing whistleblowers to disclose information anonymously through their lawyer or other trusted intermediaries will encourage more people to step forward without fear of being discovered.
- Protections for whistleblower’s identity. This will encourage whistleblowers to come forward as their identity and disclosure of any information capable of revealing their identity will be subject to confidentiality measures. Protecting a whistleblower’s identity can be important for preserving the quality of the revealed information as the discloser has requisite protections to do so.
- Replacing the current ‘good faith’ test with an objective test requiring that the whistleblower has reasonable grounds to suspect misconduct. Removing this requirement will introduce an objective test, transitioning the test away from the discloser’s motives to the quality of the information. This provision would also align Australia’s private sector whistleblowing legislation with the equivalent public-sector legislation, as well as other global best-practices approaches. Both the Fair Work (Registered Organisations) Amendment Act[1] and Public Interest Disclosure Act[2] in Australia do not require disclosures to be made in good faith to qualify for protection.
- Expanding the category of qualified whistleblowers for protection to include former officers, employees or contractors, a relative or dependent of such persons; and in some instances, journalists. Increasing the protection to include these sub-groups should encourage more people to disclose misconduct.
- Requiring all public companies, large proprietary companies and registerable superannuation entities to include whistleblowing policy. Companies that fail to apply these policies will face penalties. Australian law firms have recommended companies review their existing whistleblowing regimes to ensure whistleblowers are treated fairly, in accordance with the requirements of the new proposals.[3]
Recently, the Senates Economics Legislation Committee (‘Senate Committee’) completed its inquiry into the Bill and recommended it be passed. In short, their recommendations can be summarized in three key points:
- Single Private Sector Act. They emphasise that a Single Act will prevent whistleblowers having to determine whether they should submit their complaint to the APRA, or to ASIC or to the AFP. The Senate Committee also stress ‘the more pieces of legislation that are caught up and involved, the more risk there is of a loss of uniformity’.[4]
- The Senate Committee considers that the introduction of a rewards scheme for whistleblowers will encourage more to come forward.
- Independent Whistleblower Protection Authority. Recommendations were made about the benefits for a company of having disclosures investigated by an independent investigator.[5] The Senate Committee also highlighted the importance of giving one clear protection authority for the whistleblower.
Leading law firm MinterEllison expects that the Bill will be passed based on the Senate Committee’s report and recommendations. For corporations, the implications of this Bill going into force means they would have until 1 January 2019 to review existing whistleblower policies to ensure compliancy. Some proposed amendments will impact a company’s compliance obligations. Thus, corporations may also wish to consider training for executives and other staff to deal with the new legislation.
[1] Fair Work (Registered Organisations) Amendment Act 2016 (Cth).
[2] Public Interest Disclosure Act 2013 (Cth).
[3] http://www.rk.com.au/insights/whistleblower-reform/ ; https://www.minterellison.com/articles/whistleblower-bill-update-april-2018
[4] Page 15
[5] http://parlinfo.aph.gov.au/parlInfo/download/committees/commsen/5ee9c6cd-7ab2-437c-8330-6ef4904511a9/toc_pdf/Economics%20Legislation%20Committee_2018_03_06_5966.pdf;fileType=application%2Fpdf#search=%22committees/commsen/5ee9c6cd-7ab2-437c-8330-6ef4904511a9/0000%22