The Treasury Laws Amendment (Enhancing Whistleblower Protections) Act 2019 was passed by the House of Representatives on 20 February 2019 and received Royal Assent last week. On becoming law on 1 July 2019 it will introduce several significant whistleblower protection changes to the Corporations Act. It will:
- require all public companies and large proprietary companies to have a whistleblower policy in place by 1 January 2020;
- broaden the definition of ‘disclosable matters’ which will in turn expand the types of reports where whistleblower protection provisions will apply;
- broaden the classes of people a corporation must protect (to include family members of eligible whistleblowers and suppliers);
- provide for protection of a whistleblower even if the whistleblower seeks to remain anonymous;
- make corporations liable to pay compensation in defined circumstances if there is detrimental conduct against a whistleblower by an employee of the corporation; and
- provide a defence for corporations who are sued by a victimised whistleblower if the corporation ‘took reasonable precautions, and exercised due diligence, to avoid the detrimental conduct’.
ASIC is likely to issue an update to its Whistleblowers – company officeholder obligations guidance in the coming months but corporations should start thinking now about what they need to do in order to ensure they are compliant by 1 July.
Strict compliance with the new provisions is only one part of a company’s whistleblower regime. Corporations need to look beyond mere compliance and recognise the compelling good governance business case for having an effective whistleblower protection program that:
- encourages more people to come forward with reports of corporate wrongdoing;
- encourages people who would have come forward in due course to come forward earlier;
- more effectively protects people who come forward as part of the company’s Human Resources and Occupational Health and Safety obligations.
The new legislation represents a major step forward in the more effective control of misconduct within Australian corporations and misconduct by Australian corporations.