The Treasury Laws Amendment (Enhancing Whistleblower Protections) Act 2019 (“the Act”) will be applicable to all companies, which includes foreign corporations, financial, trading corporations, ADIs, NOHCs, Insurers and super funds from July 1, 2019. The Act brings about enhanced disclosures, ethical whistleblowing measures and protection of the whistleblowers by amending certain provisions of the Corporations Act, 2001 and the Taxation Administration Act, 1953.
Key reforms include:
- Requirement for formulation of whistleblower policy by public companies, large proprietary companies and registered superannuation entities by January 1, 2020.
- Definition of eligible whistleblowers (for protection purposes) extended to former employees, contractors, employees of contractors, associates, and relatives of such individuals as well as existing employees. However, employees having any personal employment grievances or conflicts with the employer will not be granted any protections prescribed under the Act for making any disclosures. The protections will not be extended to disclosures about employment or workplace grievances such as interpersonal conflicts, transfer, promotion, or disciplinary decisions.
- Transparency in disclosures is increased by fostering a culture of compliance and ethics and the scope of eligible recipients (who may receive disclosures) is narrowed to include top managerial personnel such as senior managers, auditors, directors and extends to journalists as well.
- Stronger protections for whistleblowers.
Severe civil and criminal penalties will be levied on contravening employers who breach the provisions of the Act, being as under:
- For individuals, up to AUD 1.05 million; and
- For companies, AUD 10.5 million or 10% of the annual turnover.
- A penalty of AUD 12,600 for non-formulation of a whistleblower policy.
Though the formulation of a whistleblower policy is mandatory for certain companies, it is recommended that all companies review/update their policies, employment contracts and check implications of the act. Training programs may also be conducted to train people regarding the whistleblower policy and its disclosures.
© 2019 Shan & Co.