FCX seminars put the new whistleblower provisions under the microscope

FCX recently hosted seminars in Sydney, Melbourne and Perth aimed at generating discussion and raising awareness of the new whistleblower protection amendments to the Corporations Act.  The seminars used a real-world case study inspired by a whistleblowing case that actually happened to highlight the more esoteric elements of the new whistleblower provisions.

In Sydney, FCX hosted an evening seminar featuring Griffith University’s Professor AJ Brown; ANZ Whistleblower Program Advisor, Christine Lui; University of New South Wales General Counsel, Elizabeth Grinston and Senior Manager with ASIC’s Office of the Whistleblower, Greg Hackett.

In Melbourne, FCX hosted a breakfast event at the RACV Club with the panel comprising Corrs Litigation Partner, Abby Gill; Professor Brown; ANZ Whistleblower Program Lead, Clare Molan; and ASIC Regional Commissioner for Victoria and National Head of the Office of the Whistleblower Warren Day.

In Perth, FCX hosted a round table lunch at our new office with attendees representing Perth based organisations from the public and private sectors. Over lunch the attendees were asked to consider the whistleblower case study.

These events presented the many nuances of the new whistleblower provisions for FCX subscribers and other attendees.   

Key takeaways for attendees included:

  • The new provisions apply to all Australian corporations regardless of size – all corporations have new whistleblower compliance obligations including not-for-profits, charities, sporting groups and many government agencies and state-owned enterprises with a corporate structure.
  • The parties to whom protection is to be afforded has been significantly broadened and now includes: business partners (such as customers, contractors and suppliers), volunteers and people formerly in those categories as well as their immediate families.
  • The test for conduct that, if reported, will trigger protection for the whistleblower specified in the expression “misconduct or an improper state of affairs or circumstances” is likely to be interpreted broadly by the courts – it does not apply, as believed by some, only to misconduct by the corporation itself, serious governance failure or institutionalised fraud and corruption. 
  • Whistleblower protection rights will be automatic – a person coming forward to make a report of corporate misconduct does not need to claim or apply for protection in order to be protected.
  • Disclosers who come forward to report what may seem relatively minor matters must still be protected as whistleblowers, subject to satisfying other requirements set out in the Corporations Act.
  • A company must protect a person who has not yet come forward but who could come forward as a whistleblower. This would include the situation where a worker makes mention to a colleague that they are considering making a report of misconduct and then, as a result, suffers detrimental conduct.
  • Unlike the previous Corporations Act whistleblower provisions, anonymous whistleblowers (and their anonymity) must also be protected – any breach of the duty to maintain the confidentiality of a whistleblower’s identity or the confidentiality of the information provided will be viewed seriously by the courts.
  • While the new provisions do not stipulate how whistleblowers would be compensated in the event they suffer detrimental conduct, the panel was of the view that the orders for compensation could be significant and more so for organisations who fail to demonstrate their implementation of a whistleblower protection program.
  • There is a strong business case for having a robust and effective whistleblower protection regime in Australian business – both panels were of the collective view that compliance with the legislation should be viewed as a foundation for Australian corporations.
  • It is common for tension to arise between issues of workplace grievance involving a whistleblower and the company’s obligation to protect the whistleblower. Separating these issues is critical to managing risk.

The seminars also heard that from 1 January 2020, public companies and large proprietary companies1 are required to have a whistleblower policy and to “make that policy available to officers and employees of the company”. Such a policy will need to include:

  • Protections available to whistleblowers
  • To whom disclosures that qualify for protection may be made
  • How a qualifying disclosure may be made
  • How the company will support whistleblowers and protect them from detriment
  • How the company will investigate disclosures that qualify for protection
  • How the company will ensure fair treatment of employees of the company who are mentioned in disclosures that qualify for protection
  • How the whistleblower policy is to be made available to officers and employees of the company

Management of a company’s risk under the new whistleblower regime requires both policy and a supporting program which is fit for purpose in its business. To be effective, such a program will require design, communication and training which enables employees (and others) to fully understand their rights and obligations and embeds the culture of “speaking up without fear”.

1 – A large proprietary company is defined in the Corporations Act as a company that meets at least two of: consolidated revenue of $50 million, gross assets of $25 million or more, and 100 or more employees