The changes to Australian whistleblowing laws which begin on 1 July 2019 aim to protect whistleblowers by prohibiting disclosure of the person's identity and by prohibiting a broad range of conduct which is regarded as detrimental to a whistleblower. These protections are backed up by very substantial civil and criminal sanctions.
The protections apply where the following conditions are met:
|The person making a disclosure is an "eligible whistleblower"||This covers officers, employees, associates or suppliers of a "regulated entity". The employees of the supplier are also eligible whistleblowers.|
|The eligible whistleblower makes a "protected disclosure"||This means that the person has reasonable grounds to suspect that the disclosure concerns misconduct or an improper state of affairs or circumstances in relation to the regulated entity or a "related body corporate".|
|The disclosure is made to an "eligible recipient"||This covers officers, senior managers, auditors or actuaries of the regulated entity or a related body corporate.|
These conditions have particular implications for global corporate groups that have companies incorporated or registered in Australia:
- An eligible whistleblower can only be an officer, employee, associate or supplier (and the supplier's employees) of an Australian incorporated company or foreign company registered in Australia. Where a corporate group consists of a parent entity incorporated in the UK (for example) and 100% wholly owned subsidiaries in Germany, Singapore and Australia, a person who is an officer or employee of the German entity cannot be an eligible whistleblower unless the German entity supplies good or services to the Australian entity.
- A protected disclosure can relate to the affairs of an overseas corporation where it is a related body corporate of a company registered in Australia. In the example set out above, a protected disclosure could concern misconduct by the German entity.
- An eligible whistleblower raising a disclosable matter can obtain protection by making the disclosure to a senior manager of a related body corporate. In the example above, an employee of the Australian subsidiary could make disclosure (concerning misconduct in relation to the Australia entity or any of the other companies in the group) to a senior manager of the Australian company or a senior manager of any of the other companies in the group (e.g. a senior manager in Germany).
Because of the sanctions that can apply when confidentiality of the whistleblower's identity is breached or where the whistleblower suffers detrimental action, it is vital that companies within a global group understand that senior managers could be "eligible recipients" under Australia law. Such persons need to be trained in how to deal with disclosures and how to manage their obligations under Australian whistleblowing laws.
Any whistleblower process should also be actively managed and reviewed for effectiveness in order to avoid inadvertent breaches of the law by eligible recipients of a related body corporate.
If in doubt, employers should seek legal advice or speak to us about strategies. We have designed high-value packages to assist companies in updating their existing policy or in implementing a compliant policy and whistleblowing process.
Our packages include user-friendly and cyber-secure technology supported by our investigation and regulatory expertise. Most importantly, our legal advice in relation to your whistleblower protection regime is covered by legal professional privilege, minimising risk to organisations and their directors.
You can download the brochure or calculate your compliance costs here.
See related article regarding whistleblowers in Australia here.
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.