Why the new whistleblower legislation is important for your business
On July 1st, new legislation relating to Whistleblower Protections came into effect, takingAustralia’s whistleblower protection frameworks from one of the world’s weakest to one of the strongest. Whistleblowing plays a crucial role in managing risk for an organisation, especially for small and medium-sized enterprises. Consequently, the Whistleblower Protections Amendments provide an important opportunity for businesses to review their related policies.
It is important to note that the disclosure must be made to allocated people in the company, as this not only provides vital information to the business, but also allows the company to act and control these issues.
The Whistleblower Protections Amendments to the Corporations Act (Cth) and Taxation Administration Act (Cth), drastically broadens the scope of protection for whistleblowers to make ‘protected disclosures’ about a broad range of misconduct. This misconduct relates to a broad range of matters, including fraud, bribery, corruption and money laundering.
While all companies are covered by the new legislation, public companies and those classified as “large private” companies must have a compliant whistleblower policy in place before January 1st, 2020.
Keep reading to find out more about these amendments to the legislation and see how they can affect your business.
Amendments to whistleblower protections
The legislative changes not only expands who qualifies as a whistleblower, but also strengthens the protections offered to them, effectively encouraging whistleblowing and holding employers accountable for protecting eligible whistleblowers.
Key reforms include:
- An expansion of the category of persons who can make disclosures.
- Expanding the scope of disclosable conduct but excluding personal work-related grievances.
- Strengthening protections by enshrining confidentiality of the whistleblower’s identity, prohibiting victimisation or detriment, and compensations and orders through a court.
- A requirement for large companies to have a compliant whistleblower policy from January 1st, 2020, with mandatory content.
- Criminal offences and significant increase in penalties for breaching the Whistleblower protection laws.
What is a whistleblower?
A ‘whistleblower’ is a person who, whether anonymously or not, discloses conduct deemed to be misconduct, illegal, unethical or potentially damaging to an organisation.
The definition of a whistleblower is broad, to encourage the reporting of misconduct. An eligible whistleblower includes any person who currently is, or has been, any of the following:
- An officer or employee of the organisation;
- An individual who supplies paid or unpaid services or goods, and their employees;
- An individual who is an associate of the organisation;
- A relative, dependent or spouse of any of the above categories of persons.
How whistleblowing can reduce fraud
Whistleblowing plays a crucial role in managing risk for an organisation, particularly for businesses with less than 100 employees. According to the 2018 Global study on Occupational Fraud and Abuse the median loss for fraud is US$200,000 for smaller businesses, compared to US$104,000 for those with over 100 employees.
Do You Need a Whistleblower Policy?
All companies are covered by the new legislation, but only public and large private companies must have acompliant whistleblower policy in place before January 1st, 2020. Nonetheless, it is strongly recommended for all companies to utilise this legislation to have a suitable whistleblower policy as a matter of good risk management.
A large private company is one that satisfies at least two of the following criteriafor the financial year commencing on July 1st, 2019:
- Consolidated revenue of at least $50 million;
- Consolidated gross assets of at least $25 million; or
- At least 100 employees within the company and the entities it controls.
For more information regarding the changes to the whistleblower legislation, download our Whistleblower Amendments Fact Sheet.
If you require guidance regarding this legislation, policy development, training or other matters of workplace policy, contact us directly on 03 9864 6070 or email email@example.com.