It’s important to have compliance embedded in management from the top down, especially as your business grows. Luis Izzo, Managing Director – Sydney Workplace, Australian Business Lawyers & Advisors explains what new whistleblower laws mean for your business.
Written by Luis Izzo, Managing Director – Sydney Workplace, Australian Business Lawyers & Advisors.
New whistleblower laws were recently passed by Federal Parliament and will take effect from 1 July 2019. The laws introduced:
- expanded whistleblower protections for all Australian companies.
- a requirement for larger Australian companies to introduce a whistleblower policy.
- new penalties for breaches of whistleblower protections, ranging up to $10.5 million.
Who can make whistleblower disclosures under the new laws?
Employees, officers and suppliers of companies, as well as their family members, can make disclosures under the new laws. They can now also be made anonymously.
Who are covered by the laws?
- companies registered under the Corporations Act 2001
- life insurance companies
- superannuation entities or trustees.
What types of disclosures are protected?
- Misconduct or an “improper state of affairs or circumstances” regarding any of the entities covered by the laws or their related bodies corporate.
- Conduct that breaches the Corporations Act 2001 or conduct that breaches the ASIC Act or a range of specified insurance, life insurance and superannuation statutes.
- Conduct that relates to an offence against any law of the Commonwealth which is punishable by imprisonment for 12 months or more.
- A danger to the public or the financial system.
Importantly, disclosures about personal work-related complaints are not generally protected by the laws. This includes disclosures about:
- Matters affecting the discloser’s employment that impact upon the employee personally.
- Interpersonal conflict between a discloser and another employee.
- Decisions relating to promotions, demotions and terms and conditions of employment.
- Decisions about taking disciplinary action against a discloser (including decisions about suspension and termination of employment).
Who can disclosures be made to in order to be protected?
- officers of a company
- senior managers
- auditors of a company
- actuaries of a company
- trustee’s of a superannuation entity.
If a discloser has taken a number of steps to previously disclose the information and has reasonable grounds to believe action is not being taken to address the relevant issue, there is capacity (subject to certain pre-requisites being met) to make protected disclosures to a journalist or member of State or Federal Parliament.
New requirement for whistleblower policy
The laws require all public companies to introduce a whistleblower policy. This also applies to companies with:
- consolidated ‘Group’ revenue in excess of $50 million
- consolidated gross assets of more than $25 million or more
- 100 or more employees at the end of the financial year.
The whistleblower policy must be in place before 1 January 2020 or else companies may face fines of up to $12,600.
What are the penalties that apply for breaching the laws?
If an individual or company breach the confidentiality of a whistleblower’s identity, fines of up to $1.05 million apply to individuals and up to $10.5 million apply to companies engaged in the breach.
The same fines apply if an individual or company victimises or threatens to victimise a whisleblower.
If this article raised any issues for your business, get in touch on 1300 565 846 or email email@example.com.
ABLA is providing businesses with whistleblower policies compliant with the new laws at a reduced standard fee of $500 (excluding GST) until the introduction of the laws on 1 July 2019.
A version of this article first appeared on Australian Business Lawyers & Advisors website.