Whistleblower bill – “…a move in the right direction”?

Author: Abigail McGregor Publication | April 3, 2018

Introduction

The Australian Government’s proposed whistleblowing laws are one step closer to becoming reality, with the Senate Economics Legislation Committee (the Committee)recommending that the Treasury Laws Amendment (Whistleblowers) Bill 2017 (the Bill)be passed, despite numerous stakeholders expressing concern about aspects of the Bill.  For more details of the Bill’s contents, refer to our December update.

In acknowledging stakeholder concerns, the Committee has recommended that the Bill explicitly provide for review of its provisions. The Committee considers this will ensure that recommendations of the Parliamentary Joint Committee on Corporations and Financial Services (PJC)that have not been implemented2 in the Bill will remain under active consideration. Unfortunately, the commitment to review the legislation may only result in more uncertainty for business, as they undergo the culture shift required to implement the new regime, while keeping one eye on the horizon for further changes.   

The only other amendment that appears likely to be made to the Bill is to clarify that a journalist (who can be the recipient of an emergency disclosure) will include public broadcasters.

As noted in the Committee’s Report, key recommendations that have not been implemented are development of a single private sector Act, the introduction of a rewards scheme for whistleblowers, and the establishment of an independent Whistleblower Protection Authority. The Report notes that the government is considering all the recommendations of the PJC.

What next?

The Government currently looks on track to meet its proposed legislative timetable of a commencement date of 1 July 2018. The Bill might still come under scrutiny in its legislative passage, with the Labor Senators noting they will continue to consult with stakeholders on the Bill, and calling on the Government to release its response to the PJC report as soon as possible. Senator Patrick (NXT) provided a dissenting report, and stated that “perfect is the enemy of good, but this ain’t even good”. The Greens have also expressed concerns that the Bill did not go far enough.

What does this mean for business?

As it looks increasingly likely that the legislation will commence on 1 July (albeit with some minor tweaks), companies3 that do not have whistleblower policies will need to start work on developing a compliance plan, and companies with existing policies will need to review and update them to ensure they comply with the new provisions.

The protections in the Bill apply to broader scope of disclosures, and employees will be able to make protected disclosures much further down the hierarchy to their immediate supervisor or line manager. The Committee noted the difficulties this may create but felt that companies would develop ways of handling this, such as designating more senior managers as the reference point for disclosures. Complaints may also be able to made by non-employees, such as contractors, suppliers and family members.

Companies will be subject to penalties for failing to set up a compliant whistleblower policy, and both individuals and companies may be subject to substantial civil and criminal penalties for breaching a whistleblower’s anonymity and for victimising or threatening to victimise a whistleblower. However, a company will be not be vicariously liable for the acts of its employees, if it can establish it took reasonable steps and exercised due diligence to avoid the victimising conduct.

Therefore, a simple tick the box policy will not be enough to ensure compliance with this legislation, or to establish that an employer has exercised due diligence to avoid the victimising conduct. Companies will need to ensure they implement training at all levels of their organisation, to enable supervisors and managers to recognise a whistleblower complaint and deal with them appropriately, and implement systems to closely monitor the understanding and application of their policy and procedures.

Norton Rose Fulbright is a global law firm, with more than 50 cities worldwide, including cities across Europe, the USA, Canada, Latin America, Asia Pacific, the Middle East and Central Asia. We advise corporates, financial institutions and senior executives extensively on the implications of international business ethics and anti-corruption best practice standards, wider developments in the legislative and corporate landscape, and in relation to internal and government-led investigations. A particular focus of our advice has been on the concept of adequate procedures and the broader issues of risk management and compliance.

For more information, contact Abigail McGregor  to discuss how the new whistleblower protection regime may impact your business.
 

 


  • 1 The Senate Economics Legislation Committee report states that “On balance, the committee is satisfied that the bill is a move in the right direction and will be a valuable contribution to whistleblower protection.” (at 3.86)
  • 2 As noted in the Committee’s Report, key recommendations that have not been implemented are development of a single private sector Act, the introduction of a rewards scheme for whistleblowers, and the establishment of an independent Whistleblower Protection Authority. The Report notes that the government is considering all the recommendations of the PJC.
  • 3 This will apply to public companies, large proprietary companies and companies that are trustees of superannuation entities.
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