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Norman Waterhouse

Time is almost up; does the requirement for Mandatory Whistleblower Policies apply to your entity?

By 1 January 2020 the following organisations must have in place a specific whistleblower policy:

  • all public companies (including charities and not for profits);
  • large proprietary companies; and
  • corporate trustees of registrable superannuation entities (excluding trustees of self-managed superannuation funds).

Large proprietary companies are those which meet at least two (2) of the following criteria:

  • consolidated revenue of $50 million or more;
  • consolidated assets controlled of $25 million or more, or
  • 100 or more employees.

All other companies will be required to comply with new whistleblower obligations, but will not be required to have in place a specific whistleblower policy.

Incorporated associations may be required to comply with the new law if their trading or financial activities are a significant portion of their overall activities.

These reforms are contained in amendments to the Corporations Act 2001 (Cth) and the Taxation Administration Act 1953 (Cth) which commenced on 1 July 2019 (the commencement date). They provide for an expanded scheme for corporate whistleblowing and a new tax affairs whistleblowing scheme. They are aimed at protecting whistleblowers and encouraging the exposure of fraud and corruption and the promotion of integrity and accountability.

These reforms are not to be confused with the new Public Interest Disclosure Act 2018 (SA) which applies to State and Local Government in South Australia, (which you can read more about here), or similar legislation in other States or Territories.

When is a new whistleblower policy required?

If your organisation is one that fits into one of the categories outlined above, it will have until 1 January 2010 to implement a compliant whistleblowing policy.

Whistleblowing policies that were created before these amendments are unlikely to comply with the new requirements and accordingly, will need to be updated. In the interim, organisations will need to advise their officers and employees that they are updating their policy and provide contact details for queries.

The whistleblower policy, whether new or updated, will need to be provided to officers and employees of the entity.

What are the other changes introduced by the new laws?

A number of changes have been made to existing protections including the following:

  • Disclosures made to journalists and parliamentarians are now protected in particular limited circumstances of public interest and emergency.
  • Whilst the strict requirement to keep the identity of a whistleblower secret is maintained, there will be some limited flexibility in respect of the investigation of disclosures.
  • Whistleblowers:
    • now include former employees, associates and relatives;
    • are no longer required to identify themselves;
    • are now able to report to senior managers;
    • are able to report when they have reasonable grounds to suspect misconduct or an improper state of affairs;
    • will no longer have to prove the whistleblower protections apply to them;
    • will more easily be able to claim compensation if they are victimised as a result of their whistleblowing activities.
    • A broader range of remedies and tougher penalties for both individuals and companies failing to comply with the new laws will apply.

When will the new laws apply?

The new laws will apply to all disclosures made after the commencement date even if the conduct disclosed occurred before that date. However, the new anti victimisation and compensation provisions will only apply if the relevant conduct occurred after the commencement date.

What should be included in a Whistleblower Policy

A whistleblower policy must:

  • Provide protections for whistleblowers, including protections under the Corporations Act;
  • Outline who can receive protected disclosures and how such disclosures can be made;
  • Outline how whistleblowers will be supported and protected;
  • Set out how the company will investigate protected disclosures;
  • Outline how the company will ensure employees mentioned in protected disclosures will be treated fairly; and
  • Make it clear how the policy will be made available to officers and employees.

Are there penalties for non-compliance?

Failure to comply with these new laws may result in fines ranging from $12,600 to $10.5 million. Certain failures or breaches will also be a criminal offence.

Tax Affairs Whistleblowing Scheme

The changes made to the Taxation Administration Act also came into effect on 1 July 2019, and protect disclosures made about misconduct and improper conduct in respect of tax affairs.

The changes have a broader affect and apply to individuals and all kinds of businesses, including sole traders, companies, partnerships, superannuation funds, trusts and unincorporated associations. They apply to both internal disclosures to the relevant business and external disclosures to the Commissioner for Taxation.

For more specific information on any of the material contained in this article please contact Johanna Churchill on + 61 8 8210 1236 or jchurchill@normans.com.au or Stefanie Magliani on +61 8 8217 1373 or smagliani@normans.com.au.

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