The House has today passed the Treasury Laws Amendment (Enhancing Whistleblowers Protections) Bill 2017 (Bill). The Bill extends the corporate whistleblower regime in the Corporations Act and creates a whistleblower regime in the Taxation Administration Act 1953 (TAA) for disclosures of information by individuals regarding tax law breaches or misconduct relating to an entity’s affairs.
The new regime will commence on the first day of the second quarter following royal assent – so if royal assent is received by 1 April 2019, the new regime will commence on 1July 2019.
The overarching intention of the reforms is to standardise the protections available across sectors so as to encourage whistleblowers to more readily disclose information relating to actual or suspected non-compliance or misconduct with regards to corporate and taxation laws. The Bill will enhance anonymity for whistleblowers and provide remedies, including compensation, should a whistleblower suffer detriment as a result of making a disclosure or if their identity is revealed. Whistleblowers cannot be subject to legal liability for making a disclosure (although, may be subject to civil, criminal or administrative liability for any personal misconduct revealed by the disclosure or investigation).
From 6 months after the commencement of the new regime, public companies and large proprietary companies (including a private company that is a trustee of a registrable superannuation entity) must have a whistleblower policy which meets the requirements and is made available to officers and employees of the company. Whilst this policy requirement is not contained in the amended TAA, the Explanatory Memorandum for the cross-sectoral whistleblower reforms envisaged the new tax protections being reflected in a company’s policy. Publicly-listed companies should also keep in mind that whistleblower policies might require further updating once the final version of the 4th Edition of the Corporate Governance Principles and Recommendations (which contains a new Recommendation relating to whistleblowing) is confirmed in early 2019.
Now is the time for companies to start thinking how exactly they will comply with these new (and onerous) requirements, which will include careful implementation and roll-out of the company’s whistleblower program, so that the company is well positioned to iron out any issues identified at an early stage.