In Australia, we are seeing more frequent complaint activity by alleged whistleblowers. Managing these complaints can be challenging for businesses, particularly when combined with the protections given by other legislation.
The whistleblower protection provisions in the Corporations Act 2001 (Corporations Act) were substantially amended with effect from 1 July 2019.
The legislation applies to all corporate entities doing business in Australia, with additional obligations for big business and listed entities. Very substantial criminal and civil liabilities can be incurred for contraventions, such as not having or publishing a relevant policy, breaching the confidence of a whistleblower’s identity or exposing or threatening to expose a whistleblower to any kind of detriment.
Last week, in part one of this two-part series, Partner Andrew Tobin, Senior Associate Adele Garnett and Solicitor Phoebe Kenafake reported on Australian Securities and Investment Corporation (ASIC) and case developments in the whistleblower protection regime.
But most of the relevant news isn’t in the reported cases.
Current whistleblowing complaint trends
We are seeing more frequent complaint activity by alleged whistleblowers – with the associated statutory protection from 'detriment’ – to lever for better financial outcomes in employment-termination scenarios. These complaints can present significant management challenges when you combine them with the protections provided by other legislation in dealing with complaint activity; for example, under the Fair Work Act 2009 (Fair Work Act), safety or anti-discrimination legislation.
In the very recent past we can point to multiple significant examples of our own client engagement with whistleblower protection issues. Earlier this year, as one example, we were involved in a successful claim by the former CEO of a company for significant additional termination benefits, based partly on allegations that she had been terminated from her employment because of whistleblowing activity by her at board level over an extended period.
Part of the former employer’s difficulty in that case was that they did not appear to have any systems in place for the management of whistleblowing activity, and the board did not recognise her reports as whistleblower complaints. Not identifying a whistleblower complaint is a particularly significant issue due to the requirements that complaints be kept anonymous (unless consent is otherwise granted or an exception applies), strictly confidential, and the requirement that whistleblowers not be threatened or subjected to detriment or victimisation because of their complaint.
Will Australia’s whistleblowing laws be reformed?
Australia’s current social and political climate is also likely to lead to ongoing reforms, potentially giving even greater protections to whistleblowers and enlarging the types of activity – which are already very broad – about which protected complaints and reports might be made.
Some argue that even the existing protections – recently described by ASIC as ‘world-leading’ – are insufficient considering the personal experiences of some recent well known whistleblowers in Australia, including Jeff Morris (whose complaints about rogue financial planning practices at the Commonwealth Bank sparked the Banking Royal Commission), Richard Boyle (who blew the whistle on unethical debt recovery practices in the Australian Taxation Office), David McBride (who spoke up about alleged war crimes committed by Australian forces in Afghanistan) and Bernard Collaery (a lawyer who alleged Australian espionage against Timor-Leste). In response, the current Attorney General in Australia’s recently elected Labor government has said that he is considering further changes to our whistleblowing laws. 1
And, as one example of a pending and almost certain related reform, in September 2022 a Bill was introduced in the Australian Parliament proposing to extend Australia’s sex discrimination laws by, among other things, declaring it unlawful for a person ‘to subject another person to a workplace environment that is hostile on the ground of sex’. While whistleblower protections are unlikely to apply to isolated complaints of sexual harassment, they might well apply to complaints or reports which allege a sexually charged hostile working environment.
What whistleblowing services are recommended for businesses?
In its relevant Regulatory Guide (RG 270, Nov 2019), ASIC advises all relevant entities to consider authorising an independent whistleblowing service provider to receive disclosures under their whistleblower policies.
What steps can businesses take to prepare for whistleblowing complaints?
- Review the business’ whistleblower policies. It is important that these align with the requirements under the Corporations Act – and remember that listed entities and large proprietary company are required under that Act to have a complying policy.
- Ensure that anyone involved in managing or receiving complaints (eg Senior Management, company officers, HR) – whether named as whistleblower complaints or otherwise – is trained in whistleblower protection issues. The last thing a business needs is for a whistleblower report to go unrecognised, for an anonymous whistleblower to be inadvertently identified, or for a whistleblower to be subjected to some kind of detriment associated with their complaint.
- Obtain legal advice on managing and investigating any whistleblower reports. The regime is complex and it is important to get it right from the beginning.
- Where possible, keep in contact with whistleblowers whilst complaints are being investigated. This shows support to a whistleblower at a stressful time, and also makes it clear that the complaint is being taken seriously. A whistleblower who does not know what is happening is much more likely to make further complaints to regulatory bodies or other external parties (journalists or a member of parliament).
- Seriously consider authorising an independent whistleblowing service provider to receive disclosures – as recommended by ASIC in its Regulatory Guide (RG 270, Nov 2019).
HopgoodGanim Whistleblowing Reporting Service
HopgoodGanim can provide you with a confidential whistleblower reporting service for your employees and other third parties, to assist you to perform your obligations under Australia’s whistleblower protection laws. As part of our HopgoodGanim Whistleblowing Reporting Service, we can:
- take and document reports or complaints made under your own whistleblowing policy;
- for that purpose, maintain dedicated phone and email channels to which reports and complaints might be made. The service contemplates that you will incorporate these into your own whistleblowing policy and/or complaint/reporting mechanisms;
- provide you, in suitable form, with the detail of reports or complaints made through the service; and
- liaise, as appropriate, with whistleblowers.
Along the way we will make sure to keep complaints and reports confidential and secure and, as legally required, help you to protect the confidentiality of whistleblowers’ identities.
Other whistleblowing services
Outside or additional to the HopgoodGanim Whistleblower Reporting Service, we can also:
- train your relevant personnel about the basics of Australia’s whistleblower protection laws;
- help you develop a compliant whistleblower policy. In FY2021 ASIC reviewed a sample of whistleblower policies) from entities required to have one. The majority were found not to fully address the legal requirements. Further, ASIC expects you to periodically review your policy;
- investigate complaints or reports made under the policy;
- advise you how to manage such complaints or reports and the individuals affected by them.
For further information about our Whistleblower Reporting Service, please contact our Workplace and Employment team, your usual HopgoodGanim or Effective Governance advisor, or, send us a note to email@example.com.
Our Workplace and Employment team at HopgoodGanim are also well positioned to provide legal expertise across wider employment, industrial relations and workplace health and safety matters to whistleblowing. Our team can advise individuals and businesses about compliance with regulation, optimising workforce engagement and outcomes, and managing and containing exposure to possible disputes or litigation.
1. 'Labor government urged to drop prosecutions against whistleblowers and ramp up protections’: https://www.abc.net.au/news/2022-06-14/labor-prosecutions-against-whistleblowers-laws-protections/101140464 accessed 10 October 2022.