Whistleblower legislation to become law on 1 July 2019

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.