Not for Profit (NFP) bodies are often formed as public companies limited by guarantee. Under the new whistleblowing provisions public companies are required to have whistleblowing policies in place by 1 January 2020.
If you are a NFP, do you need to comply with this requirement? Or are NFP’s exempt?
There are two limbs of the new Whistleblower Legislation (found within the Corporations Act and the Tax Administration Act):
- affording whistleblowers protection; and
- implementing whistleblower policies.
Working out what your charity or NFP entity needs to do to comply is not always easy.
If your charity is a public company or large proprietary company, the position is relatively clear: you will need to comply with the whistleblower protections and have a whistleblower policy in place by 1 January 2020 ( See our previous blog on this).
The whistleblower protections under the Whistleblower Legislation will generally apply to all companies, and requires those companies to afford protection to whistleblowers. Even if your charity is an incorporated association, and was formed under State legislation, if it falls within the definition of a ‘trading or financial corporation’ under the Corporations Act, it may need to comply with the whistleblower protections.
Whether your charity will qualify as a trading or financial corporation will depend on the activities your charity is involved in, and what proportion of the enterprise involves that. Trading activities include buying and selling goods. Financial activities include borrowing money or investing.
If you have any doubt about whether your charity will need to comply with the whistleblower protections, we recommend seeking legal advice. Cowell Clarke will be happy to assist in making this determination.
The Whistleblower Legislation requires public companies (listed or unlisted), large proprietary companies and proprietary companies which are trustees of a registrable superannuation entity to have a whistleblowing policy, and to make it available to its officers and employees.
The Whistleblower Legislation also sets out the matters to be addressed by the whistleblowing policy. Cowell Clarke has been assisting its clients to ensure that the policies they prepare will comply with the new requirements. If your charity is a public company limited by guarantee, we can assist you to do prepare your policy, and to ensure that it is done in time, before the 1 January 2020 deadline.
NFP’s are not always exempt.