In July of last year, an amendment was made to the Corporations Act that alters the way your organisation should look at whistleblowing. To save you an afternoon of deciphering legal jargon, we’ve provided a brief update here explaining precisely what you need to know and what you need to do to address this from a whistleblowing training standpoint.
What is Whistleblowing?
Whistleblowing is a process that provides an avenue for people (whistleblowers) to identify and call out misconduct and harm to consumers and the community. The Australian Corporations Act 2001 spells out particular protections and legal rights that are awarded to these individuals to encourage them to come forward with their concerns.
What changed in 2019?
The 2019 amendments to Corporations act brought increased scrutiny to organisations regarding their responsibilities in the whistleblowing process. The amendment extended whistleblower protections to more, pardon the legalese, ‘regulated entities’. Regulated entities in layman’s terms are people associated with your organisation.
There is a broader range of conduct that is now considered to be ‘misconduct’ and disclosures can now be made anonymously and no longer need to be made ‘in good faith.’ Disclosures about personal work-related grievances will now only be protected in certain limited circumstances.
So who is protected now?
Protected whistleblowing disclosures can now be made by current and former:
- Employees and officers;
- Contractors, suppliers and their employees;
- An individual who is an associate (as defined in the Corporations Act) of the entity; and
- Spouses and relatives of any of the above.
And who can they make their disclosures to?
- ASIC, APRA, and other prescribed Commonwealth authorities;
- officers or senior managers of the entity;
- an auditor or actuary of the entity; and
- persons authorised to receive disclosures. This could include a whistleblowing hotline
- In certain instances, parliamentarians and journalists
Why does my organisation need new whistleblowing training?
Even if you’ve provided whistleblowing training in the past, as of July last year, the responsibilities of your organisation have changed. It is doubtful that your previous whistleblower policy and training will stand up and comply with the amendments passed down in 2019.
What happens if we get this wrong?
The consequences of mishandling whistleblowing are severe and unrelenting.
Corporations that breach their obligations may be liable for:
- Civil penalties of $10.5m, three times the benefit derived or detriment avoided by the contravention, or ten per cent of annual turnover up to $525m.
- Criminal penalties of $126,000 for breach of confidence or $504,000 for breach of protection against victimisation.
Individuals who breach their obligation may be liable for:
- Civil penalties of $1.05m or three times to benefit derived or detriment avoided by the contravention.
- Criminal penalties of $12,600 for breach of confidentiality or $54,000 for breach of the protections against victimisation.
- Up to six months’ jail for breach of protections or two years jail for breach of protections against victimisation.
The above highlights the legal ramifications of non-compliance, but it’s also worth accounting for the public relations issues that will accompany a breach of whistleblower protections.
What’s my first move?
The most important step to take it is to commit to informing your staff about the changes to the legislation. It’s vital that you ensure your employees and managerial staff within your organisation understand their role in the whistleblowing process.
Whistleblowing legislation is constructed in such a way that employers are liable for the actions and missteps of their employees. It is vital that you run training to ensure your staff understand this.
Whistleblowing training is something that your staff and your organisation will benefit from it and should be part of your commitment to creating a safe and healthy working environment.
To find out about Tribal Habits’ simple online whistleblowing training courses, click here.
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