Amendments to Commonwealth Whistleblower Protections

15 March 2019
Michael Owens, Partner, Brisbane

Changes to federal laws will significantly clarify and enhance whistleblower protections as well as require large companies to have formal whistleblower policies.

The Federal Parliament recently passed the Treasury Laws Amendment (Enhancing Whistleblower Protections) Bill 2018 and it will now become law.

The new laws primarily amend the current whistleblower protections found in the Corporations Act and create whistleblower protection for those who disclose breaches of tax laws.[1]  The amendments will flow onto a number of other federal legislation, particularly in the financial services sector.[2]

Generally, a whistleblower is a person working within an organisation who reports, or discloses, alleged dishonest or illegal conduct that has occurred in that organisation.

Key amendments

There are a number of amendments to the current whistleblower laws. The key amendments include:

  • Under the previous legislation, only current employees, officers or contractors of an organisation were protected.  Protection is now expanded to include:
    • former officers;
    • former employees;
    • suppliers of goods and services;
    • associates of the entity in relation to the organisation; and
    • specific family members of the whistleblower.
  • Expanding the confidentiality provisions to facilitate anonymous disclosure.
  • Eliminating the good faith provisions for making a disclosure.  This means that the whistleblower’s reasons for acting should not be a consideration when determining if they qualify for protection.
  • Clarifying when disclosures to third parties, such as a journalist or member of Parliament, will be protected, being ‘public interest disclosures’ and ’emergency disclosures’.[3]
  • Amending the definition of a ‘journalist’, for the purpose of emergency and public interest disclosure, to mean a person who is working in a professional capacity as a journalist for a national broadcaster.  For example, a journalist who is working for the Courier-Mail may fall within this definition.
  • Some ‘personal work-related grievances’ will not be protected. This might include interpersonal conflicts with other employees or transfer, promotion, engagement or disciplinary matters.
  • Eliminating the due diligence defence.  An organisation will not be able to rely on having taken reasonable precautions and exercised due diligence to avoid causing any detriment to the whistleblower However, due diligence may be considered by the Courts, if the whistleblower believes that they have been victimised, as a mitigating factor when assessing the organisation’s liability.
  • Whistleblowers who believe they have been victimised by a third party can make a claim for compensation against the organisation. For example, if an employee engages in adverse behaviour against the whistleblower because they (the whistleblower) made a disclosure, the organisation may be liable for the employees’ behaviour.
  • Requiring all public and large proprietary companies to have a ‘Whistleblower policy’ within six months of commencement of the new laws, meaning:
    • organisations currently operating without a whistleblower policy are required to implement one;
    • existing whistleblower policies should be updated within this timeframe; and
    • failure to comply with this requirement is an offence of strict liability with a penalty of 60 penalty units (currently $12,600 for an individual).
  • Increasing penalties on organisations and individuals who disclose the identity of or cause detriment to a whistleblower.
  • Orders of compensation, injunctions, reinstatement and an apology can be made by the Courts where the whistleblower has suffered detriment from an organisation or individual.

Organisations operating under state public interest disclosure or whistleblower legislation, for example the Public Interest Disclosure Act 2010 (Qld), will need to be mindful of the changes to the federal regime, particularly potential interactions with private sector disclosures.

Key takeaway

Significant enhancements to whistleblower protection will strengthen the enforcement prospects of the Commonwealth against rogue behaviour.  For large organisations, the formulation or updating of their whistleblower policies is mandatory.

 

[1] By changes to the Tax Administration Act 1953 (Cth)

[2] Other affected legislation includes the Banking Act 1959, Insurance Act 1973, Life Insurance Act 1995 and the Superannuation Industry (Supervision) Act 1993.

[3] Public interest disclosures are subject to a number of requirements including but not limited to at least 90 days have passed since the disclosure was made to the regulator and the whistleblower does not have reasonable grounds to believe that action has been, or is being, taken. An emergency disclosure includes when the whistleblower has reasonable grounds to believe that the information involves substantial or imminent danger to the health and safety of one or more persons or to the environment.

Authored by:

Michael Owens, Partner

Angela Szczepanski, Senior Associate

This update does not constitute legal advice and should not be relied upon as such. It is intended only to provide a summary and general overview on matters of interest and it is not intended to be comprehensive. You should seek legal or other professional advice before acting or relying on any of the content.

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