The Treasury Laws Amendment (Enhancing Whistleblower Protections) Bill 2017 (“Whistleblower Bill”) is currently before the Senate.  The Senate Economics Committee has recently issued its report into the Whistleblower Bill and recommended it be passed.

Once passed, the Whistleblower Bill will consolidate and enhance the whistleblower protections that apply to the private sector in the Corporations Act 2001, changing the way the private sector approaches whistleblowers.

The most significant amendments will:

  • broaden the types of corporate “misconduct” about which disclosures can be made to include an ‘improper state of affairs or circumstances’ along with the contravention of any law administered by ASIC and APRA e.g. the Corporations Act, the Banking Act;
  • significantly expand the group of people who can make disclosures;
  • expand the range of people to whom a whistleblower can make a disclosure – to include a person’s “immediate supervisor”, managers, officers of the company and auditors;
  • remove the current requirement that a whistleblower must be acting in “good faith” to gain protection, with the lesser requirement for the whistleblower to have “objectively reasonable” grounds to suspect wrongdoing. Malicious intend will be irrelevant;
  • allow anonymous disclosures and make it a civil penalty contravention to disclose a whistleblower’s identity (maximum penalty of $200,000 for an individual and $1 million for a corporation);
  • strengthen the immunities for whistleblowers in legal proceedings;
  • create new avenues for whistleblowers to be compensated if they are “victimised” – including monetary compensation, orders for apologies, injunctions and reinstatement of terminated employees;
  • reverse the onus of proof when a whistleblower seeks compensation, once they have established that they suffered a detriment;
  • in extreme cases, a protected disclosure can be made to the media or members of parliament; and
  • require public and large proprietary companies to have a compliant policy, with penalties for non-compliance. The Whistleblower Bill includes mandatory content requirements for the policy.  (The legislation will still apply to other companies.)

Employers will face some new challenges including the practical difficulty or receiving and investigating protected disclosures since in some instances it may be very difficult to investigate an anonymous disclosure.  Restrictions on disclosing the identity of a whistleblower may also inhibit the proper conduct of an investigation into the alleged wrongdoing, including fulfilling the obligation to afford fairness to the respondent in an investigation.

Further, there will be challenges in identifying whether the alleged wrongdoing qualifies as a “disclosable matter” that is covered by the new provisions.

Where a complaint is made about “misconduct” or “an improper state of affairs or circumstances” careful consideration will need to be given to ensure a complaint is dealt with under the appropriate policy.  For example, a company may consider certain personal complaints of sexual harassment are best dealt with under the company’s Sexual Harassment Policy, while other complaints of sexual harassment signal a more endemic corporate issue and should be investigated and dealt with under its Whistleblower Policy.

Since disclosures can be made to a person’s manager or supervisor, training will be needed to equip them to identify and handle a relevant disclosure.

If the Whistleblower Bill is passed in its current form, public and “large proprietary companies” (defined by the legislation to be companies with (A) a turnover of $25m or more; or (B) with gross assets of $12.5m or more; or (C) with 50 or more employees) will have until 1 January 2019 to implement a compliant policy, although the new legislation will apply from an earlier date.

Consequently, once the Bill has been passed, it will be time to consider reviewing and updating any existing Whistleblower Policy before 1 January 2019, preparing a Whistleblower Policy if you do not have one and providing first responder training to “immediate supervisors” and managers to ensure compliance with the new legislation.

We are following the Bill and will be ready to assist clients with drafting their Whistleblower Policies and amending other complaints policies when the legislation is finally passed.