Law firm alerts small business to whistleblower risks

HLB Mann Judd director Graeme Bailey noted the Treasury Laws Amendment (Enhancing Whistleblower Protections) Bill 2017 will afford whistleblowers access to compensation and enhanced protection against victimisation after 1 July 2018, irrespective of when the disclosure was made.

He said the obligations will extend to all public and large proprietary companies who will now have to implement a whistleblower policy by January 2019 for public companies and December 2019 for large proprietary companies.

When passed, the legislation will apply to protected disclosures made on or after 1 July 2018.

“Individuals and corporations who fail to set up a compliant whistleblower policy will be subject to penalties, and failure to comply with new confidentiality and victimisation provisions will be considered criminal offences,” Mr Bailey said.

In addition to harmonising existing protections, the new legislation is aimed at:

• A broader group of informants who fall within the protection regime, including former officers, employees and suppliers, associates of the entity and family members of employees;
• Introducing new statutory protections for whistleblowers in relation to consumer credit laws and taxation;
• Expanding current protections to take into account disclosures concerning corporate corruption, bribery, fraud, money laundering, terrorist financing or other serious misconduct; and
• Abolishing the ‘good faith’ requirement, effectively allowing anonymous disclosures and providing immunities to whistleblowers regarding the type of disclosure made,

Mr Bailey pointed to the original whistleblower legislation – the Corporations Act 2001 (Cth) under Part 4AAA – which had been in place for over 10 years.

He said recent high-profile examples, including the 7-Eleven underpayments scandal, highlighted deficiencies in the original legislation, including:

• The act was silent on how ASIC should handle information from whistleblowers;
• ASIC was not mandated or enabled to ensure the rights of whistleblowers are protected; and
• ASIC had difficulty legally resisting requests during litigation for whistleblower information, including the whistleblower’s identity.