Recent amendments to the Corporations Act 2001 (Cth) are set to strengthen the protections offered to whistleblowers.
The legislation applies from 1 July 2019 and will have far-reaching impacts for many businesses and their obligations to comply with the laws.
One of the most substantial changes is the introduction of a new mandatory requirement for certain businesses to have a whistleblowing policy in place.
Which businesses need a whistleblower policy?
There are three types of businesses that will be required to have a whistleblower policy in place. Broadly, these are:
- public companies;
- large proprietary companies (i.e. companies that meet at least two out of three of the following criteria: earning $50 million or more in annual consolidated revenue, holding $25 million or more in consolidated gross assets, having at least 100 employees); and
- corporate trustees of a registrable superannuation entity.
What does the policy need to include?
The reforms specify that the policy must include information about:
- the protections available to whistleblowers;
- to whom disclosures that qualify for protection may be made, and how they may be made;
- how the company will support whistleblowers and protect them from detriment;
- how the company will investigate disclosures that qualify for protection;
- how the company will ensure fair treatment of employees of the company who are mentioned in disclosures that qualify for protection, or to whom such a disclosure relates; and
- how the policy will be made available to officers and employees of the company.
The policy must also be made available to all officers and employees of the company.
The requirements for a valid policy as set out in the legislation do not provide detail as to the threshold of information required to fulfil these requirements.
Non-compliance with these requirements may result in a penalty being imposed.
When does the requirement come into play?
While the amendments to the Corporations Act 2001 (Cth) came into effect on 1 July 2019, there is a six months ‘grace’ period in relation to such policy requirements.
As such, businesses that are required to have a whistleblower policy will not be caught out by any non-compliance until six months from the introduction of the legislation.
Nevertheless, steps to comply with these requirements should be taken sooner rather than later, to ensure you have a suitable policy and related processes in place before the six month deadline.