Mandatory whistleblower protection policies will be in place from 1 January 2020 following reforms to laws, says ASIC Commissioner John Price.
As a conduct regulator, ASIC relies on intelligence from a variety of sources to understand concerns in the market and launch investigations into misconduct. ASIC identifies its enforcement cases by triangulating the information people report to us — plus our own surveillance work, and our investigators’ and lawyers’ detailed understanding of the corporate sector.
Often, the most valuable information ASIC receives about corporate wrongdoing is from people inside organisations — whistleblowers — who see misconduct by companies or company officers and make the brave decision to call it out.
Encouragement to come forward
The reforms to the Corporations Act 2001 (Cth) broaden the definition of a “whistleblower” to cover more categories of people who may have observed misconduct by a company or company officer and could face reprisals for reporting it. Importantly, whistleblowers who wish to remain anonymous will be able to access the protections.
Protections now extend to:
- The company’s current and former employees, officers and contractors
- The whistleblowers’ family members
- All allegations of misconduct (apart from a report solely of personal workplace grievances).
What is a whistleblower?
A whistleblower is an insider within an organisation who reports misconduct, or dishonest or illegal activity that has occurred within that same organisation.
If you believe you may be a whistleblower or are unsure what protections may apply to you, it is important to seek legal advice. ASIC is not able to give personal legal advice and can only provide general information on these issues.
The reforms give whistleblowers easier access to compensation if they suffer loss, damage, or injury because of detrimental conduct. They won’t face a costs order even if their compensation claim is unsuccessful — unless it’s considered vexatious.
For the first time, a whistleblower who approaches a journalist or member of parliament with their concerns about dangers to the public or matters in the public interest can access statutory protections and rights to compensation in certain circumstances.
To encourage compliance with the new regime, the following companies must have a whistleblower policy in place from 1 January 2020:
- Publicly listed companies
- Large proprietary companies (consolidated revenue of $25m or more, gross assets of $12.5m or more, or 50 or more employees)
- Proprietary companies that are the trustees of registrable superannuation entities.
The policy must set out the company’s approach to supporting whistleblowers and how it will protect them from harm. It must explain the steps a company will take to investigate the whistleblower's concerns. The policy must be available to all company officers and employees.
From 1 January 2020, it will be an offence for the types of companies listed above to not have a whistleblower policy in place. After consultation with industry, ASIC will issue detailed guidance for companies on what the policy should contain.
As well as relying on whistleblower intelligence to investigate misconduct, ASIC is responsible for investigating allegations of victimisation from whistleblowers. We will do this even where the whistleblower report relates to matters outside of our regulatory responsibilities. ASIC is also empowered to pursue whistleblower victimisation under new civil penalty provisions, in addition to the existing criminal offences.
Transparency and culture
Whistleblowing plays an important role in alerting businesses to changes necessary to help improve overall corporate performance. Encouraging people to speak up when they see wrongdoing increases transparency and has the added benefit of improving organisational culture. That’s why companies should make it as easy as possible for their own people to come forward when they observe or experience misconduct in the workplace.
Respect and fair treatment for whistleblowers, commitment to addressing their concerns, and reporting whistleblower concerns to directors and board members will assist a company to manage itself, comply with its obligations and improve its performance.
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