By Dan Pearce and Hannah Pelka-Caven -
Snapshot
- The Treasury Laws Amendment (Enhancing Whistleblower Protections) Act 2019 (Cth) has significantly expanded and strengthened the protection for Australian whistleblowers seeking to expose corporate misconduct.
- Companies covered by the law are required to have a whistleblowing policy by an applicable statutory deadline (for most companies, 1 January 2020), and must provide the policy to all staff.
- Businesses should be aware of applicable deadlines and ensure that appropriate internal management frameworks are in place to support the scheme.
The protections for corporate whistleblowers in Part 9.4AAA of the Corporations Act 2001 (Cth) (‘Corporations Act’) have been expanded and strengthened. The Treasury Laws Amendment (Enhancing Whistleblower Protections) Act 2019 (Cth) (‘Whistleblowers Act’) has amended the Corporations Act and the Taxation Administration Act 1953 (Cth) (‘Taxation Act’) to afford significant rights and remedies to eligible whistleblowers if they report criminal conduct, misconduct, corruption, fraud, tax evasion or tax avoidance to eligible recipients.
Background
The corporate insider has long been a primary source of evidence for the agencies responsible for prosecuting criminal conduct and misconduct in business organisations. The information sourced from whistleblowers created the community groundswell that led to the institution of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.
The federal government believed more needed to be done to protect the disclosers of corporate wrongdoing. The original preconditions to access the Corporations Act protections were considered to be unduly complex and burdensome. For instance, the requirement that the discloser be acting in good faith meant the protection could be lost if personal interests motivated the passing on of information. The obligations to ensure anonymity and sanctions for contravention also needed to be stiffened.
The whistleblower protections now apply more broadly across the corporate and financial sectors and have replaced the previous scattered regulation, which received substantial criticism for being inadequate and difficult to navigate. A broader class of persons can now access these protections, beyond officers, employees and contractors, to now include consultants, suppliers and ex-staff. The new regime now also protects whistleblowers who disclose breaches of taxation laws, tax-related misconduct or breaches of Australia’s consumer credit laws.
The legislation does not deal with the public sector. In the Commonwealth public sector whistleblowing is primarily regulated under the Public Interest Disclosure Act 2013 (Cth), which played a role in shaping the new private sector regime. There are also state and territory-based public sector disclosure regimes.
Scope
The new regime is governed by provisions in the Taxation Act which regulate disclosures of tax law breaches and tax misconduct by whistleblowers, and new provisions in the Corporations Act which consolidate whistleblower regimes in other finance sector related legislation including the Banking Act 1959 (Cth), the Insurance Act 1973 (Cth), the Life Insurance Act 1995 (Cth) and the Superannuation Industry (Supervision) Act 1993 (Cth).
