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The Age of the Whistleblower: What new protections may mean for Australian business
In a late night sitting on Tuesday 21 November, the Australian Senate passed reforms amending the whistleblower protections under the Fair Work (Registered Organisations) Act 2009 (Cth). While the amendments only apply to whistleblowing in employee and employer organisations registered under that Act (that is, mainly trade unions), the new provisions depart from the typical provisions which apply to the private sector under federal laws, such as those found in the Corporations Act 2001 (Cth).
This article guides you through the key departure points and what these amendments may mean for business if similar provisions are introduced in other federal laws, as may now occur following the deal brokered between the Government and the Senate crossbench.
Whistleblower protections in the private sector
Whistleblower protections are found across a range of laws in Australia. In the private sector, the model regime in the Corporations Act1 has been replicated with minor amendment across a range of federal laws, including in the Banking Act 1959 (Cth), Life Insurance Act 1995 (Cth), Superannuation Industry (Supervision) Act 1993 (Cth) and the Fair Work (Registered Organisations) Act 2009 (Cth).
Key planks of the current model include:
protection is given to certain ‘protected disclosures’ which must be made:
in good faith and not anonymously
by specific persons to specific agencies or persons, and
in circumstances where the whistleblower has reasonable grounds to suspect that the information indicates contraventions of the key legislation in question, or misconduct or an improper state of affairs
- a person must not be intentionally victimised or threatened because they blew the whistle
- whistleblowers are eligible to certain rights and protections (including monetary compensation and reinstatement in some cases)
- whistleblowers’ identities and their disclosures must be kept confidential except in limited circumstances.
The amendments mostly affect trade unions and do not amend whistleblower provisions in any other law. However, they represent a significant departure from the model which had previously been introduced across federal laws. If these amendments are replicated in other acts, they would broaden who may qualify as a whistleblower, strengthen the protection afford to them, and introduce new complexities and challenges into everyday business decisions.
The key changes include:
- broadening the pool of potential whistleblowers to include, among others, former employees, officers and contractors
- disclosures need not be made in good faith and can be anonymous
- broadening what may be disclosed to information about possible breaches of a wider range of laws
- victimisation is prohibited even if it is not intentional, and in some cases, even if the person taking the action did not actually know that the other person is a whistleblower
- broader civil remedies including injunctive relief and exemplary damages, and civil penalty and criminal provisions if reprisals are taken against a person at least partly because they are or may be a whistleblower
- obligations on authorised officials to investigate disclosures within time limits.
What will this mean for business?
If this regime becomes the preferred model for future whistleblower protections, there would be significant implications for business in managing whistleblowers going forward.
The implications would include the need to:
- strengthen decision-making and complaints processes, particularly for employees, suppliers or persons transacting with the organisation, to ensure whistleblower reprisals play no part in business decisions
- revise existing policies and procedures to ensure whistleblowers are not harassed, discriminated against, or harmed in any way
- manage risks associated with a broader pool of potential whistleblowers who may have a wider range of complaints.
Crucially, these amendments do not answer questions, such as, what happens where the whistleblower is themselves involved in the wrongdoing? What action can be taken against them? Without a requirement for good faith disclosure, what is there to ensure disclosures are not used maliciously or improperly? In an extreme case, a person with a motive to damage the organisation could acquire protection merely by anonymously disclosing a relatively minor incident of misconduct by the organisation.
There is no doubt that whistleblower protections will continue to receive scrutiny in Australia over the next two years, following on from a previous parliamentary inquiry which was by stalled by the last federal election. The Senate crossbench has negotiated a new parliamentary inquiry with the aim of implementing the “substance and detail” of these amendments into laws for the corporate sector. Corporate Australia will need to stay on top of these developments to ensure whistleblower protections are fair but do not place unreasonable barriers on legitimate business decision-making.