Australia: Whistleblowing and collecting the cash

The proposed amendments to Australia's whistleblower regime will enhance the protection of whistleblowers in both the public and private sectors, and provide a clear avenue for a whistleblower to escalate concerns.

Now more than ever it is time for Australian organisations to sharpen their focus on the management and protection of whistleblowers. A recent report on Whistleblower Protections published by the Parliamentary Joint Committee on Corporations and Financial Services sets out a roadmap for legislative change. When draft legislation is some months off, it may be tempting for organisations to take a "wait and see" approach. However the focus on internal procedure and culture in the Report warrant early and comprehensive engagement.

The Committee made a number of recommendations to enhance whistleblower protections across the public and private sectors, including a controversial recommendation to introduce a bounty system that could provide financial rewards to eligible whistleblowers - some of the highlights are discussed in more detail below.

The Committee is not the first to recommend reform of Australia's whistleblower regime. However there are a number of drivers in the current political landscape pushing for these reforms which did not exist in the past. The reforms have strong support from backbenchers. As part of its commitments as a member of the Open Government Partnership, Australia has also produced an Open Government National Action Plan, which lists the improvement of whistleblower protections in the tax and corporate sectors as a priority and schedules the introduction of new legislation in the corporate sector, with a parliamentary vote no later than 30 June 2018.

A new whistleblower oversight authority

The Committee has recommended the establishment of a Whistleblower Protection Authority (to be housed within a single body or an existing body) as a "one-stop shop" for both the public and private sectors. This "one-stop shop" approach is popular with the current government, who announced a similar "one-stop shop" for financial complaints in the Federal Budget which will be housed within the Australian Securities and Investments Commission. The Whistleblower Protection Authority would be prescribed with certain powers, such as:

  • investigating criminal reprisals against whistleblowers and making referrals to the Australian Federal Police and other prosecutorial bodies;
  • overseeing the investigations of non-criminal reprisal undertaken by other regulators or public sector agencies (public sector whistleblower protection oversight functions are currently the ambit of the Commonwealth Ombudsmen);
  • taking non-criminal matters to the workplace tribunal or courts and acting on behalf of whistleblowers who have suffered reprisals or detrimental outcomes;
  • paying a replacement wage commensurate to the whistleblower's current salary as an advance of reasonably projected compensation;
  • setting standards for internal disclosure procedures in the public sector (where internal disclosures are mandated before external disclosures are permitted) and the private sector (which may include mandatory internal disclosures for large organisations); and
  • producing annual reports to Parliament for both the public and private sectors.

Introduction of more comprehensive private sector legislation

The current private sector whistleblowing regime is fragmented and consists of a number of different Acts designed to cover specific industries or types of offences and many industries (such as taxation) are not covered at all. The Committee emphasised the need for consistent protections across the private sector and has recommended the introduction of a single Act to cover the field in the private sector which would run in parallel with an updated public sector act.

Introduction of a bounty system

The Committee has recommended a new reward system for whistleblowers which would allow them to obtain a percentage of any penalty imposed against their employer in relation to matters which were raised by the whistleblower or uncovered as a result of an investigation instigated from the whistleblowing.

The Committee has recommended that the reward amount be uncapped and be determined by the court (or other body) imposing the penalty within a legislated range of percentages. That body would take a number of factors into account, including:

  • whether there was an appropriate and accessible whistleblowing procedure within the company that the whistleblower felt comfortable to access without reprisal;
  • the degree to which the whistleblower's information led to the imposition of the penalty;
  • the timeliness of the disclosure;
  • whether the whistleblower disclosed the matter to the media without disclosing it to a regulator first or whether the whistleblower provided the regulator with adequate time to investigate before disclosing to the media;
  • whether the whistleblower received any other compensation for adverse action taken against them from their employer or from the Whistleblower Protection Authority; and
  • any involvement by the whistleblower in the conduct for which the penalty was imposed. If a whistleblower was involved in the conduct they may receive immunity or a reduced penalty but will not receive a reward as it would constitute proceeds of crime.

We have previously expressed concerns that a rewards-based system risks encouraging unreliable and speculative claims by people motivated by potential monetary gain, rather than altruism. Furthermore, the introduction of bounties may also deter altruistic whistleblowers who do not want to be associated with acting for monetary gain. This race to make an external disclosure may also encourage whistleblowers to bypass internal disclosure mechanisms, thereby robbing companies of the opportunity to correct misconduct before it is widely publicised.

Any compensation arrangements which are introduced should support internal whisteblowing at first instance, where it is reasonably open to a whistleblower to do so. The Committee has recommended reducing the amount of any award given to a whistleblower where they did not utilise internal reporting mechanisms which were appropriate and accessible first. However this safeguard is undermined as the Committee has only recommended it apply if the whistleblower felt comfortable to access internal whistleblowing procedures without reprisal. This subjective test could easily be relied on by vexatious whistleblowers, as it is very difficult to prove that a whistleblower felt comfortable utilising such procedures.

Only time will tell how Parliament choose to draft the legislation and whether it takes all of the Committee's recommendations on board. We support the Committee's recommendation to have the Authority provide annual reports to Parliament on the effective operation of whistleblower laws in both the public and private sectors. Any bounty system should be re-examined to ensure it operates as intended in practice.

Broader protections and stronger remedies and sanctions for reprisals

The Committee has also recommended aligning the public and private sector with the protections, remedies and sanctions for reprisals in the Fair Work (Registered Organisations) Act 2009. This Act was amended last year and its stronger protections only covers whistleblowers within trade unions and employer associations.

It also recommends broadening the private sector definition of disclosable conduct to include a breach of any Commonwealth, State or Territory law, and broadening the category of people who can access whistleblower protections to include both former and current staff that could make a disclosure, or are suspected of making a disclosure.

It has endorsed an extension of the people within a corporation to whom a disclosure can be made and has recommended protections for anonymous disclosures across the public and private sectors, as well as stronger protections for the confidentiality of disclosures and of the whistleblower's identity. The Committee has also espoused the importance of keeping the whistleblower informed throughout the investigation process.

More reporting channels

Finally, the Committee recommends the adoption of a tiered approach to disclosures which would allow whistleblowers to retain statutory protections when making external disclosures to third parties such as a member of Federal Parliament, a registered organisation or the media in some circumstances, such as where either there is a risk of serious harm or death, or a disclosure in the public interest has been made to an Australian law enforcement agency and, after a reasonable length of time, no action has been taken by the agency.

While this recommendation enhances protections for some genuine whistleblowers, Parliament must be cautious in drafting the legislation to ensure that the protection of disclosures to the media is not misused as a vehicle for politics or to air grievances.

What does this mean for you?

The proposed amendments to Australia's whistleblower regime will enhance the protection of whistleblowers in both the public and private sectors, and provide a clear avenue for a whistleblower to escalate concerns if they feel that they have not been listened to, or have otherwise been mistreated by their employer. The proposed changes will also provide whistleblowers with more incentive than ever before to disclose corporate misconduct internally, directly to a regulator or, in certain circumstances, an external third party.

Therefore, it is critical that Australian organisations examine, and where necessary strengthen, their internal whistleblower arrangements, and cultivate a strong culture of compliance to ensure that they have an opportunity to address internal misconduct before it is escalated outside the organisation and causes potential reputational and financial damage.

RELATED KNOWLEDGE

Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this bulletin. Persons listed may not be admitted in all states and territories.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
Norton Rose Fulbright Australia
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Norton Rose Fulbright Australia
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions