The Treasury Laws Amendment (Enhancing Whistleblower Protections) Act 2019, which came into effect on July 1, 2019, provides a strengthened whistleblower protection regime covering the corporate, financial, and credit sectors.
Purpose of the Treasury Law
The purpose of the treasury law is to:
- amend the Corporations Act 2001 to consolidate and broaden the whistleblower protection regime for the corporate and financial sector;
- amend the Taxation Administration Act 1953 to create a whistleblower protection regime for disclosures of information by individuals regarding breaches of tax laws or misconduct and in relation to an entity’s tax affairs; and
- repeal the whistleblower protection regimes in the Banking Act 1959, Insurance Act 1973, Life Insurance Act 1995 and Superannuation Industry (Supervision) Act 1993.
What Does the New Treasury Law Do?
Expansion of whistleblower protection
The treasury law extends protections and remedies to whistleblowers, including making it simpler for a whistleblower to bring a claim for compensation when he or she has been victimized (including victimization by a third party) as a result of their report.
Additionally, the treasury act significantly broadens the range of individuals covered by whistleblower protections and those who can receive protected disclosures.
Requirement to have a whistleblowing policy
The treasury act requires public companies, large proprietary companies and trustees of a registerable superannuation entity to have a whistleblower policy in place.
In accordance with the provisions of the treasury act, the whistleblowing policy must outline:
- the protections available to whistleblowers, including the protections available under the legislation;
- how and to whom an individual can make a disclosure;
- how the company will support whistleblowers and protect them from detriment;
- how the company will investigate disclosures that qualify for protection under the legislation;
- how the company will ensure fair treatment of employees who are mentioned in whistleblower disclosures; and
- how the policy will be made available.
Failure to comply with this requirement is a criminal offence.
The treasury act also increases civil and criminal penalties for disclosing a whistleblower’s identity or victimizing a whistleblower in line with recent reforms intended to strengthen corporate penalties.
For companies, the maximum civil penalty is the greater of (a) 50,000 penalty units (i.e., currently $10.5 million), (b) three times the benefit derived or detriment avoided, or (c) 10 percent of annual turnover (up to 1 million penalty units, i.e., currently $210 million).
There are also significant penalties for individuals who disclose a whistleblower’s identity or cause detriment to a whistleblower (of up to $200,000).
What Should Companies Do?
Employers may want to consider whether they are required to implement a whistleblowing policy and consider ways in which to comply with the requirements of the treasury act to avoid attracting penalties.
Written by James Sanders and Renee Karakinos of MST Lawyers and Roger James of Ogletree Deakins
© 2019 MST Lawyers and Ogletree, Deakins, Nash, Smoak & Stewart, P.C.