The Treasury Laws Amendment (Enhancing Whistleblower Protections) Act 2019 introduces amendments to the Corporations Act, the Taxation Administration Act and a range of other legislation. These amendments are effective from 1 July 2019 and support improved whistleblower protections and set new obligations for the management of whistleblowers.
All companies are covered by the new legislation, however public companies, large proprietary companies and proprietary companies that are trustees of registerable superannuation entities, are specifically required to have a whistleblower policy in place by 1 January 2020.
Whistleblowers may make disclosures on a confidential basis to eligible recipients including officers, senior managers or auditors of the company. In the event they do not have reasonable grounds to believe that timely action is being taken to address the matter, they may also make disclosures in the public interest to members of parliament and the media.
Eligible whistleblowers now extend to current and former officers, employees, suppliers of goods or services, associates, relatives, and dependents of these individuals. Disclosures may be made where the whistleblower has reasonable grounds to believe that the information to be disclosed:
The recently released 4th edition of the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations also refers to whistleblowing. Recommendation 3.3 states that that a listed entity should have and disclose a whistleblower policy and that material incidents reported under the policy be reported to the board. The following policy content is recommended:
Failure to comply with the requirement to have a whistleblower policy is a criminal offence and may result in fines of up to $12,600 for individuals, or a maximum of five times more for corporations. There are also hefty civil penalties for not protecting whistleblowers, including breaching their confidentiality. For companies, the maximum civil penalty is set at the greater of $10.5 million, three times the benefit derived or detriment avoided, or 10% of annual turnover up to $210 million.
We recommend that organisations:
Please contact Mertons if you would like advice or support with the updating or drafting of your Whistleblower Policy: email@example.com | (03) 8689 9997.