Everything you Need to Know about New Whistleblower laws in effect from 1 July
Are you on top of new laws which affect business? Read this article to learn about the changes to whistleblower legislation which came into effect on 1 July.
Fraud and corruption have damaging impacts on society. One way to minimise the prevalence of such conduct is to encourage people within businesses to speak out about it. This is called ‘whistleblowing’ because the person ‘blows the whistle’ on the conduct. In order to encourage whistleblowers who expose corruption, Australia has passed new whistleblower laws. In this article, we’ll summarise what the new laws are and what they may mean for your business.
What are the Objectives of the New Law?
The Treasury Laws Amendment (Enhancing Whistleblower Protections) Act 2019 (Cth) applies public sector whistleblower standards to the private sector. It does this to expose and further deter corruption in businesses because this conduct has many negative effects on Australians.
When Do New Whistleblower Laws take Effect and Who Does it Apply to?
The law took effect on 1 July 2019 and it applies to foreign and domestic businesses that operate under Australian law. Additionally, public companies and large proprietary companies must have a compliant whistleblower policy before 1 January 2020. Large proprietary companies are defined as those which satisfy two or more of the following:
- The consolidated revenue for the financial year of the company and any entities it controls is $25 million or more;
- The value of the consolidated gross assets at the end of the financial year of the company and any entities it controls is $12.5 million or more;
- The company and any entities it controls have 50 or more employees at the end of the financial year.
What are the Main Reforms?
Changes to what is Reportable Conduct
The new law has broadened the types of conduct that people can report and that fall under the new whistleblower protections. Previously, only contraventions of the Corporations Act 2001 (Cth) were reportable conduct. However, now any misconduct or an ‘improper state of affairs’ is reportable conduct. This can include any conduct that presents a danger to the public or financial system.
Changes to Who Can Make a Disclosure?
The new law has increased the number of people that can make a disclosure. Previously, only current employees could make disclosures. Conversely, now anyone who has had a relationship with the business can make a disclosure about it. For example, this could include former employees, contractors, suppliers, or spouses or relatives of any such people.
Changes to Who Can Receive a Disclosure
Similarly, the new law has also broadened the number of people that can receive a disclosure. Now a disclosure can be made to any manager or supervisor of the whistleblower.
The new law includes several other reforms. For example, the new law allows whistleblowers to make disclosures anonymously. Similarly, whistleblowers can make disclosures on objectively reasonable grounds rather than in ‘good faith’. Additionally, there are also greater penalties for any breach of confidentiality requirements or victimisation of a whistleblower.
In summary, the new law has broadened the process of disclosing and increased the protection of whistleblowers. The Government has subsequently taken a stance against corruption and misconduct in larger businesses, with the law being updated to reflect this and encourage employees to blow the whistle. If you’d like further guidance on how to make sure you comply with these changes, it is worth consulting a business lawyer.
Jackie is the Content Manager at Lawpath and manages the content team. She has a Law/Arts (Politics) degree from Macquarie University and is an admitted solicitor in the Supreme Court of NSW. She's interested in how technology can help shape the future legal landscape.