Draft whistleblower legislation puts onus on big business

  • Draft legislation has been released to create a single whistleblower protection regime in the Corporations Act and create a new whistleblower protection regime in the taxation law.
  • Currently, Australian whistleblowing law lags behind other key jurisdictions.
  • The proposed reforms seek to increase access to compensation for whistleblowers and their associates who experience retaliation and victimisation as a result of coming forward.

Businessman with whistle

Big business should be aware of mandatory publishing requirements for whistleblower policies and a reverse onus of proof for compensation, which is among a raft of whistleblower reforms contained in draft legislation released following a Senate inquiry report. 

Background

Draft legislation creating a consolidated whistleblower protection regime for corporate misconduct in the Corporations Act 2001 (Corporations Act), as well as a broadly equivalent taxation whistleblower protection regime in the Taxation Administration Act 2003, has been released for public consultation. This follows the Whistleblower Protections Report published by the Joint Parliamentary Committee on Corporations and Financial Services in September (the Report).

While the draft legislation reflects some, but not all, of the Report's recommendations, it also places additional obligations on companies not contained in the Report's recommendations, including:

  • a strict liability offence for public companies and large proprietary companies who do not have a whistleblower policy in place and who do not make that policy available to people who may be eligible whistleblowers; and
  • a reverse onus of proof in relation to compensation for victimisation, which means that, so long as the victim can prove that he or she suffered damage because of the first person's conduct, the person accused of victimisation must prove that a disclosure was not in any part a reason for their conduct.

Laggard to world leader?

Currently, Australian whistleblowing law lags behind other key jurisdictions such as the UK and USA and there are significant gaps in the legal framework, which spans across multiple statutes. These laws are rarely utilised. By way of example, whistleblowing protections in the Corporations Act are restricted to current employees who make disclosures in relation to misconduct that occurs in breach of that Act only. If an employee is fired prior to blowing the whistle, or if the misconduct concerns a breach of legislation that does not contain whistleblowing protections (such as tax offences that occur under relevant tax legislation), the whistleblower is not afforded this statutory protection. In relation to compensation for retaliation, victimisers will face either jail (being very unlikely in the context of corporations), a very low financial penalty of $5,250 and/or damages to the whistleblower.

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