I Will Survive: Whistleblower Protections under Australia's Corporations Act

At first I was afraid, I was petrified

Thinking I could live without you by my side

And after spending nights

Thinking how you did me wrong

I grew strong And I learned how to get along

[and how to raise a valid whistleblower complaint under the Corporations Act]

I Will Survive by Gloria Gaynor

The Australian regulatory landscape has evolved significantly to protect those who speak up against corporate wrongdoing. Part 9.4AAA of the Corporations Act 2001 (Cth) outlines protections for whistleblowers that raise acts of misconduct if they meet the criteria.  People who have raised concerns of misconduct have found themselves in difficult and stressful situations, risking their careers and at times, personal safety, to raise issues.

These protections protect whistleblowing disclosures if:

1)    The disclosure is made by an eligible whistleblower; and

2)    It concerns a disclosable matter; and

3)    The disclosure is made to:

a.    An eligible recipient within an entity; or

b.    A regulatory body such as the Australian Securities and Investments Commission (ASIC), Australian Prudential Regulation Authority (APRA) or another Commonwealth entity; or

c.     A legal practitioner for the purposes of obtaining legal advice.

Separately, emergency and public interest disclosures are permitted to be made to politicians and journalists in narrow circumstances which are not discussed in this article.

Who is protected by the Whistleblower provisions?

Whistleblower protections apply to current and former:

• Employees

• Officers

• Contractors

• Suppliers

• Associates

• Relatives of the above individuals

  
  

This is a broad group of people and extends far beyond the traditional “employee whistleblower”.  As it also relates to relatives of the above individuals, this includes parties that are external to an organisation.  However, it does not cover disclosures by competitors or clients or customers of an organisation.

This disclosure must relate to a company, bank, provider of general or life insurance, a superannuation entity or trustee or an incorporated association that is a trading or financial corporation (that may include some not for profit entities).

Who is an eligible recipient?

An eligible whistleblower must make a disclosure to an eligible recipient.

An internal eligible recipient can include:

·         An officer or senior manager of the organisation;

·         someone authorised to receive disclosures in you organisation;

·         An auditor or member of the audit team or the organisation;

·         an actuary of the organisation’

·        a legal practitioner, to obtain legal advice or representation in relation to these provisions.

Disclosures may also be made externally to certain organisations such as ASIC, APRA and the Commissioner for Taxation.

What types of disclosures are protected?

A “disclosable matter” is information that concerns “misconduct, or an improper state of affairs or circumstances” in relation to an entity regulated by the Corporations Act, or their related bodies corporate.

Broadly speaking, the discloser has to have reasonable grounds to suspect that the information indicates that a regulated entity, body corporate or office or employee of the regulated entity has engaged in conduct that covers the following:

• Misconduct or improper circumstances relating to the company

• Breaches of the Corporations Act

• Breaches of other financial sector laws

• Offences punishable by imprisonment for 12 months or more

• Conduct representing a danger to the public or financial system.

These tend to relate to serious issues across an organisation.  They do not apply to personal work related grievances.

A personal work-related grievance is:

1)    A matter that relates to the discloser’s employment and has implications for the discloser personally; and

2)    The information does not have significant implications for the regulated entity and does not concern a contravention of a law or present a danger to the public or the financial system.

Examples of personal work-related grievances includes interpersonal conflict between the discloser and another person, a decision relating to engagement, transfer or promotion of the discloser, terms and conditions of employment or engagement of the discloser or a decision to suspend, discipline or terminate the engagement of the discloser.

However, what about serious allegations of sexual harassment or bullying that cross multiple teams?  Or underpayment of wages of a whole section of the organisation? These situations may amount to more than personal work-related grievances, may suggest “systemic misconduct” and may therefore constitute a disclosable matter.  With the increased focus on work health and safety, with penalties that do involve imprisonment, these matters could start as a personal work related grievance and then escalate to protected whistleblower matters.  These issues will need to be assessed on a case by case basis.

Protection for whistleblowers - Protection of Identity

A whistleblower's identity (or information likely to lead to the identification of the whistleblower) cannot be disclosed without consent, except in limited circumstances.  These limited circumstances include that the disclosure is reasonably necessary for the purposes of investigating a matter, to certain regulatory bodies, or involving a disclosure to a legal practitioner for the purposes of seeking legal advice.

Remedies Against Retaliation

The Corporations Act makes it unlawful for someone to cause or threaten detriment to an eligible  whistleblower who has, may have made, proposed to make or could have made a whistleblower disclosure.

Detriment includes disciplinary action and threats to cause detriment, which includes psychological harm, impacts to reputation, damage to property and financial and non-financial impacts.

If a whistleblower claims that they have been subjected to detriment as a result of raising an eligible whistleblower disclosure, courts are empowered to make broad orders including compensation, damages, injunctions, reinstatement, a requirement to apologise or “any other order the court thinks appropriate”.

Mandatory Whistleblower Policies

Since January 2020, public companies, large proprietary companies, and corporate trustees of APRA-regulated superannuation entities must maintain a whistleblower policy.  This requirement ensures that organizations establish clear channels for reporting that help whistleblowers navigate the disclosure process with confidence that they “will survive”.

What can employers do?

Employers should already have a policy in place if required to do.  Employers not covered by these provisions may wish to consider if a policy would suit their organisation.

The key issue is to review any potential disclosure that will have implications beyond an individual, as to whether they could amount to “systemic misconduct” and fall within the whistleblower protections.  If so, there are strict requirements in relation to confidentiality and the protection against any detriment or retaliation.   Employers must be aware of the whistleblower regime so that they know what to do if they receive a protected disclosure.

Go on and go, walk out the door

Turn around now

You're not welcome anymore

You're the one who tried to hurt me with goodbye

Thinkin' I'd crumble

Did you think I'd lay down and die?

No, not I, I will survive

Long as I know how to love [and raise a valid whistleblower complaint under the Corporations Act]

I know I'll stay alive

I've got my life to live, and all my love to give

And I will survive

I, I will survive

Remotely Legal can assist employers and boards on all aspects of employment law, including advising on difficult people issues, reviewing policies and assisting with enterprise bargaining.  Remotely Legal can train your boards and management teams on how to deal with incidents and investigations.  Remotely Legal can also be your fully outsourced HR and people legal team.

RL Investigations, part of Remotely Legal, are a team of highly experienced and qualified lawyers and investigators, who can function as your independent, external investigation team providing fast, comprehensive and reliable investigation reports, workplace culture reviews and suggestions for organisational improvement. RL Investigations can also help your internal HR or investigation team to improve their investigations and assist decision makers in considering the right factors when making key decisions.

This blog is general advice only.  Please obtain legal advice in relation to your specific circumstances.  This blog was written by a human so please seek permission if you wish to copy any of it.