Ready-set-go for the new whistleblower law

Background

The new whistleblower law is starting soon on 1 July 2019.  Companies affected should make sure they are on the starting line when it begins.

The Treasury Laws Amendment (Enhancing Whistleblower Protections) Act 2019 (Cth) amends the Corporations Act 2001 (Cth) (Corporations Act) and the Taxation Administration Act 1953 (Cth) (TAA). It expands the existing whistleblower protections in the Corporations Act and amends the TAA to enable disclosure to be made about misconduct and improper conduct in relation to tax affairs.

The new whistleblower provisions will apply to whistleblower reports made before 1 July 2019, if a whistleblower’s confidentiality is breached or the whistleblower suffers detriment on or after 1 July 2019.

Requirement for whistleblower policy by 1 January 2020

Public companies, large proprietary companies and proprietary companies which are trustees of registered superannuation funds will have until 1 January 2020 to implement a compliant whistleblower policy and make it available to all officers and employees of the company.

A “large proprietary company” is a proprietary company which satisfies at least 2 of the following for a financial year:

  • the consolidated revenue for the financial year of the company and any entities it controls is $25 million or more;
  • the value of the consolidated gross assets at the end of the financial year of the company and any entities it controls is $12.5 million or more;
  • the company and any entities it controls have 50 or more employees at the end of the financial year.

For the 2019-20 financial year and later financial years, the amounts above are increased to $50 million revenue, $25 million assets and 100 employees respectively.

A small proprietary company that becomes a large proprietary company after 1 January 2020 will have an additional 6 months to establish a whistleblower policy.

Failure to have a compliant whistleblower policy by 1 January 2020 is an offence of strict liability.

Content of a compliant whistleblower policy

A compliant whistleblower policy must set out the following information:

  • protections available to whistleblowers, including the protections available under the Corporations Act.  It will therefore be important to ensure that the policy tracks the protections contained in the legislation;
  • to whom disclosures that qualify for protection are to be made;
  • how a protected disclosure can be made;
  • how the company will support whistleblowers and protect them from detriment;
  • how the company will investigate protected whistleblower disclosures;
  • how the company will ensure fair treatment of employees who are mentioned in protected disclosures or to whom those disclosures relate; and
  • how the policy will be made available to officers and employees of the company.

Other elements of a whistleblower program

A whistleblower policy is just one part of an overall integrated whistleblower program. Other elements of an integrated whistleblower program can include:

  • a clear management statement of commitment from the Board and CEO;
  • technology assistance in setting up a whistleblower disclosure mechanism;
  • training of specialist staff to receive, deal with and investigate whistleblower disclosures;
  • awareness raising training for all staff;
  • training of senior management and Board on the policy;
  • specially targeted training for managers and supervisors on whistleblower rights and the company’s obligations;
  • alignment of the whistleblower policy with other compliance and reporting requirements; and
  • assurance and testing of the whistleblower program.

ASIC guidance

ASIC will develop guidance on the requirement for a whistleblower policy and will consult publicly in the second half of 2019.

Companies subject to the new law should review their whistleblower policy once the ASIC guidance is issued.

Things you can do now

Companies affected can start preparing now for compliance. Some of the things you can do include:

  • putting in place training for staff generally, and also for senior managers and directors who may have to manage whistleblower disclosures;
  • revising or replacing your existing whistleblower policy to meet the requirements of the new law;
  • drafting statements of commitment from the Board and CEO and publications to inform staff about your whistleblower policy; and
  • developing processes and employing technology for new whistleblower disclosure mechanisms.

How we can help

Dwyer Harris can assist you in complying with the new whistleblower law. We can provide:

  • a template whistleblower policy;
  • customisation of a whistleblower policy for your organisation;
  • reviews of staff procedures and publicity materials for your whistleblower policy;
  • face-to-face and web-based training for all levels in your business; and
  • compliance reviews of your whistleblower program.

We are also experienced in responding to whistleblower disclosures and can advise on how to respond to them as well as managing whistleblower investigations.

Please contact us to discuss your requirements.

Other resources

The following resources may also be useful in getting ready for the new whistleblower law:

  • Australian Banking Association (ABA), “Guiding principles- Improving protections for Whistleblowers” – available online here; and
  • Australian Stock Exchange (ASX), “ASX Corporate Governance Principles,” 4th Edition 2019, Principle 3, Recommendation 3.3 and suggested content for a whistleblower policy – available online here.

Kathleen Harris and Patrick Dwyer
Legal Directors