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New regime requires companies to protect whistleblowers

New regime requires companies to protect whistleblowers

By Karin Derkley

Corporate Social Responsibility  Workplace 


New whistleblower protection legislation will open the way to increased litigation and better defend those who disclose corporate misconduct, an LIV lunchtime session heard this week.

Maurice Blackburn employment and industrial law senior associate Jenna Vardi (pictured above) said the new legislation had removed many of the hurdles inherent in the old laws.

"We have often represented clients who have made whistleblower complaints or are considering doing so and we’ve seen the difficulties inherent in those laws,” she told the Lunchtime Learning session The New Whistleblower Policy in Practice.

"Under the old legislation it was difficult to protect people making whistleblower complaints from all sorts of detriment for shining a light on misconduct and wrongdoing – they were sacked, stood down and subjected to demonisation."

Whistleblowers are now guaranteed confidentiality, and the conduct they can disclose can include any misconduct or improper state of affairs or circumstances, where previously it only covered contraventions of the Corporations Act.

The new legislation has also widened the range of eligible whistleblowers from current employees of incorporated companies to now also include former employees as well as contractors who supply services or goods, volunteers, superannuation trustees or a relative – but not customers and clients or competitors.

There are still some hurdles to making a claim, Ms Vardi pointed out. Among those are proving that the perpetrator of a detriment believed the person would make a protected disclosure, and that this prompted the detriment.

The whistleblower must also prove they have received a detriment or threat because of the disclosure. That detriment can include being sacked, being harassed, damage to a person's reputation or psychological harm.

But with a significant boost in the remedies, penalties and compensation associated with proven claims, the effort to surmount those hurdles was now more justified, she said. “We anticipate more litigation because there are now far greater remedies for reprisal action.”

"Remedies and penalties are now very significant, which we think is fantastic but a lot of your clients probably won't," she said.

Companies could be fined up to $10.5 million and individuals up to $1.05 million. There are also criminal penalties of up to two years in prison.

Public and large private companies, as well superannuation funds licensed by APRA, will now need to have a whistleblower protection policy, the session heard. ASIC has published regulatory guidance on how entities can draw up and maintain a whistleblower policy.

ASIC Office of the Whistleblower senior manager Greg Hackett said whistleblower policies should have a purpose beyond just complying with the law.

Companies need to explain the legal protections for a whistleblower, how whistleblowers can access the regime, information about who can receive disclosures, how they are going to investigate whistleblower disclosure, and how they are going to maintain fairness for the subject of the whistleblower disclosure.

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