The Treasury Laws Amendment (Enhancing Whistleblower Protections) Bill 2017 is currently before the Senate and aims to strengthen and consolidate whistleblower protections in the corporate and financial sector.
Key Features of the Bill
The Bill aims to make the following key amendments to the current whistleblowing regime:
- Expanding the types of disclosures that will be protected under the whistleblower framework in relation to corporate whistleblowers;
- Expanding the categories of persons that will be protected if they make a disclosure in accordance with the whistleblower framework;
- Imposing obligations to maintain the confidentiality of a whistleblower’s identity;
- Enabling ’emergency disclosures’ permitting whistleblowers who have previously made disclosures to make an immediate disclosure to a federal or state parliamentarian or journalist in certain circumstances;
- Enhancing the remedies and processes available for whistleblowers, including extending immunities for whistleblowers and expanding protection from victimisation;
- Requiring public companies, large proprietary companies and proprietary companies that are trustees of registrable superannuation entities to have or implement a whistleblower policy; and
- Introducing a comprehensive regime in the Taxation Administration Act 1953 (Cth) for the protection of individuals who report breaches of tax laws or misconduct by corporations.
Expansion of the entities and type of conduct that may qualify for protection
Regulated Entities
Pursuant to the Bill, eligible whistleblowers may make protected disclosures about the following ‘regulated entities’:
- Corporations;
- Foreign corporations, and trading or financial corporations formed within the Commonwealth;
- Authorised deposit-taking institutions and non-operating holding companies, and their subsidiaries;
- General insurers and their subsidiaries;
- Life insurance companies and their subsidiaries; and
- Superannuation entities and trustees of superannuation entities.
Eligible whistleblowers
The Bill has expanded the categories of persons that may make qualified and protected disclosures about regulated entities. These persons are deemed ‘eligible whistleblowers’ and include the following:
- Officers, associates or employees of regulated entities;
- Individuals who supply services or goods to regulated entities (whether paid or unpaid), or employees of that individual;
- For regulated entities that are superannuation entities, individuals who are trustees, custodians or investment managers of the superannuation entity;
- Officers of body corporates that are trustees, custodians or investment managements of superannuation entities; or
- Relatives or dependents of any of the persons listed above.
The current whistleblower regime precludes former directors, officers and employees, contractors and closely related persons from making protected disclosures. However, pursuant to the Bill these categories of individuals will be able to make disclosures if they were formerly in an eligible whistleblower relationship with a regulated entity.
Further, the motivation of the eligible whistleblower when making a disclosure will not be considered relevant.
Eligible recipients
The Bill also aims to expand the persons to whom protected disclosures can be made to. These persons are deemed ‘eligible recipients’ and include:
- Officers of the regulated entity;
- Auditors, or a member of an audit team conducting an audit on the regulated entity;
- An actuary of the regulated entity;
- A person authorised by the regulated entity to receive disclosures; and
- A person who supervises or manages the eligible whistleblower making the disclosure.
Eligible whistleblowers who have previously made disclosures, may also make immediate disclosures to a federal or state parliamentarian or journalist in circumstances where the whistleblower has reasonable grounds to believe that ‘there is an imminent risk of serious harm or danger to public health or safety, or to the financial system’.
Further, eligible whistleblowers may make disclosures to ASIC, APRA or relevant Commonwealth authorities, and a disclosure may be made to a legal practitioner for the purpose of obtaining legal advice or legal representation.
Conduct
The conduct that may be the subject of a qualifying disclosure by an eligible whistleblower has been expanded to include actual or suspected conduct by a regulated entity that is:
- Misconduct, or an improper state of affairs or circumstances in relation to a regulated entity;
- Contravention of any law administered by ASIC and/or APRA;
- Conduct that represents a danger to the public or the financial system; or
- An offence against any other law of the Commonwealth that is punishable by imprisonment for a period of 12 months or more.
Enhanced protections and remedies for whistleblowers
Confidentiality of the whistleblower’s identity
The Bill aims to increase the level of protection provided to whistleblowers by strengthening the requirements of confidentiality of a whistleblower’s identity.
Consequently, whistleblowers are no longer required to identify themselves when making a disclosure, and persons, including regulators cannot disclose the identity of a whistleblower to a Court or Tribunal without a court order.
Prohibition against victimisation of whistleblowers
The Bill also aims to strengthen the immunities provided to whistleblowers by ensuring that information disclosed by a whistleblower will not be admissible evidence against them in a prosecution.
Further, the Bill enhances the protections provided to eligible whistleblowers or other individuals who suffer victimisation following the making of a protected disclosure. Victimisation is defined under the Bill as any conduct that causes any detriment or constitutes the making of a threat to cause such detriment.
If an eligible whistleblower or other individual suffers victimisation in relation to a protected disclosure, the Court may make the following orders:
- That compensation be paid to the whistleblower or other individual affected, with maximum penalties being $200,000 for an individual and $1 million for a corporation;
- That an injunction be granted to prevent, stop or remedy the effects of the victimising conduct;
- That an apology be made to the whistleblower or other individual effected; and
- That the whistleblower or other individual be reinstated if their employment was terminated.
Whistleblower policies
Pursuant to the Bill, public companies, large proprietary companies and proprietary companies that are trustees of registrable superannuation entities must have or implement a whistleblower policy that is to be provided to officers and employees of the company by 1 January 2019.
In particular, the Policy must include the following:
- Information about the protections available to whistleblowers;
- Information about the persons and entities to whom disclosures may be made, and how they can be made;
- Information about how the company will support whistleblowers and protect them from detriment;
- Information about how the company will investigate disclosures that qualify for protection;
- Information about how the company will ensure fair treatment of employees of the company who are mentioned in disclosures or to whom such disclosures relate; and
- Information about how the policy is to be made available to officers and employees of the company.
Potential impacts of the Bill on employers
The changes outlined above will commence on 1 January 2019 if the Bill is passed during the Spring sitting of parliament.
Relevant employers should, therefore, ensure that all employees, directors and officers receive training and have an understanding of how the new whistleblowing regime will operate, particularly those who may be managers and immediate supervisors.
Further, if the bill is passed in it’s present form, employers should ensure that their whistleblower policies comply with the requirements outlined in the Bill and deal with issues such as misconduct.
Companies will also need to implement a framework for dealing with and handling any protected disclosures made by eligible whistleblowers, including implementing processes that will protect the confidentiality of the identity of any whistleblowers.
The reforms will improve practices within Australian businesses, particularly in the areas of corporate governance and integrity, and will promote a more ethical culture as individuals will be aware that there is a greater likelihood that misconduct will be reported.
HWL Ebsworth will continue to provide updates pertaining to the Treasury Laws Amendment (Enhancing Whistleblower Protections) Bill 2017. If you would like more information in regards to the impacts of this Bill, please contact one of our team members.
This article was written by Brad Swebeck, Partner and Jessica Lim, Graduate-at-Law.
Brad Swebeck
P: +61 2 9334 8781
E: bswebeck@hwle.com.au