On 19 February 2019, the Treasury Laws Amendment (Enhancing Whistleblower Protections) Bill 2018 passed the House of Representatives and will now become law. Whistleblowing regimes are now in place to legally enforce protections for people who make disclosures
Past legislations were inadequate, as Whistleblowers were discouraged from making disclosures due to the fear of personal and/or professional reprisals.
The new legislation has changed this by bridging the gap in the corporate and financial sectors, improving protections offered for Whistleblowers and harmonising the laws with those in the public sector.
The new Bill has amended:
- The Corporations Act 2001 to create a Whistleblower protection regime for the corporate and financial sector
- The Tax Administration Act 1953 (TAA) to create a Whistleblower protection regime for disclosures of non-compliance with tax laws or tax avoidance.
Before the changes, any person could make disclosures to the Australian Taxation Office (ATO), however, there was no specific regime protecting Whistleblowers in relation to tax disclosures.
Following this, there will be amendments to numerous Acts including the Banking act 1959, Insurance Act 1973, Life Insurance Act 1995 and the Superannuation Industry (Supervision) Act 1993.
The new legislation will:
- Make clearer the obligations of corporations and other entities
- Make clearer the legal rights and protections of Whistleblowers
- Extend the subject matter of disclosures qualifying for protection to include breaches of all laws administered by ASIC and APRA.
The amendments will:
- Expand the categories of Whistleblowers’ qualifying for protection to include former officers, employees and suppliers as well as associates of the entity in relation to which disclosure is made and specified family members of employees, officers and others. Previously, you had to be a current employee or officer of a company or a current contractor
- Expand the scope of conduct that may be the subject of protected disclosures
- Eliminate the ‘good faith’ requirement for disclosures so that the motivation of Whistleblowers cannot be taken into account when determining if a disclosure qualifies for protection or not
- Allow anonymous disclosures
- Enhance requirements designed to protect a Whistleblower’s identity
- Provide immunities for Whistleblowers in respect of information they disclose
- Expand the range of persons or entities to which a Whistleblower may make a protected disclosure
- Expand the protections and redress for Whistleblowers who suffer reprisal or retaliation in relation to a disclosure
- Improve access to compensation for Whistleblowers who are the subject of such reprisal
- Imposes on public companies and large proprietary companies a requirement to have a Whistleblower policy.
The legislation requires that all public companies and large proprietary companies:
- Have a policy with information about the protections available to Whistleblowers, as well as how the company will ensure fair treatment of employees who are mentioned in Whistleblower disclosures, and any matters prescribed by regulation
- Make this policy available to people who may be eligible Whistleblowers in relation to the company.
This requirement applies to all public companies and all proprietary companies that have become large proprietary companies for any financial year on any day in any later financial year that is at least six months after the last day of the first financial year.
Failure to comply with this requirement to have a Whistleblower policy is an offence of strict liability with a penalty of 60 penalty units (currently $12,600 for an individual). This will be enforced by ASIC.
These amendments will apply to Whistleblower disclosures made on or after 1 July 2018, including disclosures about events occurring before this date. They also apply to the victimisation of Whistleblowers that occurs after 1 July 2018, even in relation to disclosures made prior to this date.
In order to give public companies and large proprietary companies sufficient time to comply with the legislative requirement to have a Whistleblower policy, it will apply on or after 1 January 2019, or no later than 6 months after a proprietary company first becomes a large proprietary company.
Are you ready?
In light of these recent changes, it is a good time to consider your internal whistleblower program. See how BDO can help: