In November, we reported on the passage of the Fair Work
(Registered Organisations) Bill 2014 (RO Bill) and the significant
changes it was making to the whistleblower regime as far as unions
The legislation's passage was part of a deal reached with
minority senators; one which would require this more robust regime
to apply to government and Australian corporations more widely.
Part of the deal was that there would also be a Parliamentary
Committee given the task of reviewing Australia's whistleblower
regime. On this occasion, we're only considering the regime
insofar as it would apply to corporations.
This is an area where change – and significant change
– is a near certainty. These changes will also have impacts
on business' day-to-day operations, and their risk management
and compliance procedures.
This issue also has attracted ASIC's attention. The current
regime under the Corporations Act, which applies to all
corporations, only gives cover for disclosures of breaches of the
Corporations legislation. At a recent
seminar, Commissioner John Price stated ASIC's support for
a widening of the whistleblower scheme to cover a wider scope of
misconduct, and identified that real issues for consideration
the impact that bounty payments may have in directing
informants first to regulators, rather than the seeking to resolve
issues internally – and whether that is a good thing;
whether there should be any rules which govern a US-style
practice where a law firm will package up the complaint to the
regulator, in turn for a cut of any bounty that the whistleblower
whether whistleblowers be able to profit from their own
Businesses should now be taking the time to consider these
scenarios and establish whether your company (or industry
association) wishes to make any submission. Here's where we see
the key issues for your organisation to focus on:
ISSUES FOR CONSIDERATION
The implementation in the corporate, public and not for profit
sectors of whistleblower protections – taking into account
the scheme in the RO Bill (we set out below some of the differences
between the RO Bill scheme and the scheme under the Corporations
The types of wrongdoing that a whistleblower protections regime
A consideration of the compensation regimes that apply in other
jurisdictions – including the US-style bounty system –
which allow whistleblowers to receive payments where they come
forward with high quality original information that leads to
successful enforcement action. The Securities Exchange
Commission's webpage provides some
recent examples of those payments. The quantum of these payments is
significant, so they operate as a real incentive to informants. For
example, the most recent announcement, on 14 November 2016,
identified a US$20 million payment.
The definitions of prohibited detrimental or reprisal action
The obligations to ensure publication of, and application of,
the procedures to support whistleblowers, and corporations'
liability if they fail to comply.
The obligation on regulatory and enforcement agencies to ensure
the proper protection of whistleblowers and investigation of
The circumstances in which disclosures to third parties or the
media should attract protection.
Substantive differences between the RO Bill scheme and
the existing Corporations Act scheme
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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