Sunshine and whistleblowing

Article by Charles Watson – Workplace relations and compliance specialist

Amended whistleblowing laws have been in place since 1 July 2019. Charles Watson outlines how we got here and some considerations for your business on how to handle the new requirements.

We have all been shocked or felt justified in our thoughts by matters that have been revealed in various royal commissions and investigative journalism outcomes over the last few years. We have all seen the details of corporate cultures that allowed, or turned a blind eye to, behaviours that lacked integrity resulting in their ‘values’ and ‘mission statements’ being hollow rhetoric.

Finally, legislation and government agencies have made some attempts to catch up, but this has also lumbered corporations with yet another governance issue and additional administrative burden. Unfortunately, the malfeasance of some collectively burdens all.

“Sunlight is said to be the best of disinfectants; electric light the most efficient policeman”

This quote from the great American lawyer Justice Louis Brandeis in 1914 on transparency of actions is as relevant to today as when he wrote it. In both real life and via Hollywood we have seen numerous stories of individuals who showed enough courage to call out improper conduct being treated as lepers and pariahs. By contrast, we have seen perpetrators of such ‘reportable matters’ be allowed to gracefully leave the corporate stage or even promoted as a result of their scorched earth strategy to achieving results. This culture has allowed the unscrupulous to get away with the unacceptable and exploiting others along the way.

Maybe that culture, along with some huge blinkers, is the reason we have ended up where we are today. Add to that is an almost ingrained Australian norm of not dobbing. But there have been improvements over the last few years on calling out unacceptable behaviour. To go back just a couple of years and quote the line popularised by Lieutenant General David Morrison “the standard you walk past, is the standard you accept”. That statement struck a chord at the time, and the momentum it created needs to continue.

The recent amendments

Effective since 1 July this year are amendments to the Corporations Act are meant to clarify company responsibilities and encourage individuals to blow the whistle on corporate misconduct. The new laws will apply to disclosures made on or after commencement of those amendments but may also relate to conduct which occurred before commencement.

While some may assume these amendments only affect the big end of town, many of the amendments will affect the entire business community. As always, breaching the laws comes with big fines and penalties for corporations and individuals. We are talking millions of dollars people!

Added whistleblower protections

The amendments purportedly offer corporate whistleblowers greater rights and protections including keeping the confidentiality of their identity. Whistleblowers may also seek compensation if they suffer loss, damage, or injury as a result of any reprisals. As usual there are increased potential penalties for corporations and individuals who breach the law.

Personal grievances

Under the new laws the whistleblower must have “reasonable grounds to suspect corporate misconduct. The amending laws are not for airing personal work-related grievances. ‘Offended’ employees can continue to use the usual avenues of unfair dismissal claims, stop bullying orders, and adverse action claims for those issues. Although history shows we will likely see a few employees seek to cause mischief through these new laws. As part of any policy and training, make it clear that given the seriousness of this issue any false reporting will be treated as a serious disciplinary matter.

Company policy

The legislative amendments also require that public companies, large private companies, and corporate trustees of registrable superannuation entities, have a detailed whistleblower policy in place from 1 January 2020. That being said, SME’s should consider the nature of your business and whether it may be appropriate to implement a policy as well.

For more detailed reading on the subject ASIC, the relevant government authority, have some dedicated resources available on their website.

To do list

If you haven’t already, and your company needs to, the next steps are:

  • Determine the resources that need to be applied to comply.
  • Draft and implement an appropriate whistleblower policy.
  • If your business has current policies and processes maybe it’s time for a review to ensure compliance with the amending law.
  • The policy needs to cover a range of issues including:
    • what are and are not reportable matters;
    • the protections available for whistleblowers;
    • how the company will ensure fair treatment of employees named in a disclosure;
    • how and to whom disclosures can be made; and
    • the process the company will follow to investigate disclosures.
  • Probably the most important part of making such policy and procedures ‘sticky’ in your corporate culture is to ensure appropriate implementation and training. Specific training should be given to those individuals within an organisation who will receive and handle such reports.

Being the one in control of a negative issue brings a better outcome.  If appropriate processes aren’t in place and don’t cover the field, you have lost the ability to handle the issue. Having the opportunity to internally investigate and self-report will most likely mitigate a business’s exposure.

So, spend some time before the 1 January 2020 deadline to get it right for your business.  Maybe also consider giving your risk, governance and or compliance people a bonus for the added weight of handling yet another governance issue. Shine a light by all means, but get prepared for doing it properly.

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