Proposed amendments to whistleblower laws – what’s new?

Articles Written by Jan Dransfield (Partner), Yoness Blackmore (Senior Associate)

The Treasury Laws Amendment (Enhancing Whistleblower Protections) Bill 2017, which is currently before the Senate, consolidates the existing whistleblowers’ regime in the corporate and financial sectors and also substantially strengthens and broadens the protections and remedies.

The new regime aims to bring the protections of whistleblowers in the corporate and financial sectors closer to that which is currently available to whistleblowers in the public sector under the Public Interest Disclosure Act 2013.   

This will provide support for good governance in the private sector which is becoming a public priority, particularly in light of the recent fallout from the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry. 

The changes are due to commence on 1 July 2018 and will apply to disclosures made on or after that date. 

Key elements of the new whistleblower regime in the private sector

The new private sector whistleblowers’ regime will have a number of key elements. 

It applies to all constitutional corporations, which are defined in the new regime as “regulated entities”.

The class of persons who are afforded protection has been considerably expanded. Whistleblowers can be current and former employees, suppliers and associates of the entity, as well as any of their relatives, dependants or spouses.

The scope of disclosable matters has been significantly expanded to include, for example, misconduct or an improper state of affairs. There is no longer a requirement of honesty and good faith. Disclosures must only have been made on reasonable grounds. Malicious intent is irrelevant. 

Disclosures may also be made to a wider scope of persons, including to a person’s ‘immediate supervisor’.  Anonymous disclosures are also permitted.

Penalties for breaching the confidentiality of the whistleblower’s identify and/or for any victimising conduct of a person connected with the disclosure have been significantly increased – up to $200,000 for an individual and $1million for a corporation. 

Emergency disclosures of some matters may also be made to members of parliament or journalists where an entity does not deal with the disclosure within a reasonable time period.

A reverse onus of proof applies for compensation claims for victimisation and breaches of confidentiality. In addition, adverse costs orders will only be made in limited circumstances; namely where the whistleblower is found to have vexatiously initiated the proceedings or has unreasonably caused the other party to incur costs.

Irrespective of any contractual arrangements, a whistleblower will not be subject to criminal, civil or administrative liability for a protected disclosure but may be liable if, for example, they were complicit in the disclosed misconduct.  

Public companies, large proprietary companies and companies that are trustees of superannuation entities must have a compliant whistleblower policy in place by 1 January 2019. The policy must also be made available to employees and officers of the company.

Implications for corporations

These changes, if passed, will have far-reaching implications for corporations.

In particular, the inclusion of “misconduct” as a disclosable matter may adversely impact on the operation of existing policies and procedures. Care must be taken to ensure that any complaint is directed to the appropriate policy or employees could potentially choose the most suitable policy based on what provides the best outcome. For example, from the company’s perspective, claims of sexual misconduct may be more appropriately dealt with through its bullying and harassment policy rather than through a whistleblower process.

It will also be difficult for companies to ensure that all supervisors have the skills to competently handle a disclosure. This creates risks for the corporation in terms of penalties and orders for compensation, and also for the individual employee or officer of the company who has accessorial liability.

The reverse onus of proof, which applies to victimising conduct and breaches of confidentiality, is likely to be problematic. Similar to general protections claims, a company will need to be able to provide evidence that its decision-making in relation to any detrimental treatment is based on a reason that is not connected to a protected disclosure. It will also need to demonstrate that it has taken reasonable steps to ensure compliance in this regard.

What should companies do?

If the new laws are passed, corporations should give careful consideration to the following:

  • implementing a whistleblower policy that complies with the new laws and complements other policies dealing with issues such as misconduct; for example, bullying and harassment policies or policies dealing with conflicts of interest;
  • providing appropriate training for “immediate supervisors”;
  • putting in place frameworks for the proper escalation and resolution of complaints;
  • having appropriate processes to effectively manage any allegations of detrimental conduct, including to protect the confidentiality of the identity of the whistleblower; and
  • ensuring appropriate records are kept having regard to the reverse onus of proof requirements.
Important Disclaimer: The material contained in this article is comment of a general nature only and is not and nor is it intended to be advice on any specific professional matter. In that the effectiveness or accuracy of any professional advice depends upon the particular circumstances of each case, neither the firm nor any individual author accepts any responsibility whatsoever for any acts or omissions resulting from reliance upon the content of any articles. Before acting on the basis of any material contained in this publication, we recommend that you consult your professional adviser. Liability limited by a scheme approved under Professional Standards Legislation (Australia-wide except in Tasmania).

Related insights Read more insight

Workplace delegates’ rights and other employment changes from 1 July 2024

Under changes to the Fair Work Act 2009 (Cth) (which were part of the Closing Loopholes amendments) enterprise agreements voted on by employees on or after 1 July 2024 must include a term regarding...

Closing Loopholes No 2 Bill – new laws regarding casuals, contractors and the right to disconnect

The second round of the Federal Government’s “Closing Loopholes” amendments to the Fair Work Act 2009 (Cth) (FW Act) were passed by Parliament on 12 February 2024 and received Royal Assent on 26...

Recent work health and safety developments

All employers should now have implemented measures to discharge their obligation to take reasonable steps to eliminate sexual harassment and other unlawful conduct in the workplace given the...