It is important that Entities are aware of their obligations in relation to eligible whistleblowers and qualifying disclosures

Protections are provided under the Corporations Act 2001 (Cth) (Corporations Act) for eligible whistleblowers disclosing qualifying misconduct by public companies, large proprietary companies, and corporate trustees of registrable superannuation entities (Entity).
This article provides an overview of the whistleblower requirements and some good practice relating to whistleblowers as identified by the Australian Securities and Investment Commission (ASIC).

Whistleblower eligibility
qualifying disclosure of information about an Entity if the person is any of the following:
• an employee of the Entity;
• an officer (for example, a director or company secretary) of the Entity;
• a contractor, or an employee of a contractor, supplying goods or services to the Entity;
• an associate (for example, director or company secretary of a related body corporate) of the Entity;
• a trustee, custodian or investment manager, or an officer, employee or goods and services provider to such, of superannuation entities;
• a dependent (such as a spouse) or relative of an individual referred to in the above.

Qualifying disclosure
A qualifying disclosure is a disclosure by an eligible whistleblower and includes conduct engaged in by an Entity, or by an officer or employee of the Entity, that:
• is an offence against, or the contravention of, the Corporations Act, the Insurance Act 1973 (Cth), the Banking Act 1959 (Cth) or another legislative instrument listed in the Corporation Act for this purpose;
• is an offence against any other law of the Commonwealth that is punishable by 12 months (or more) imprisonment; or
• represents a danger to the public or the financial system.

How does a whistleblower disclose information?
The whistleblower may disclose the information to the following persons of the Entity: an officer or senior manager, an auditor or member of an audit team, an actuary or a person authorised by the Entity to receive disclosures. A disclosure can also be made to ASIC or the Australian Prudential Regulatory Authority (APRA).
The person who receives the qualifying disclosure must not disclose the identity of the eligible whistleblower, or information that may enable their identification, unless they have consent from the eligible whistleblower, or the identity is provided to ASIC, APRA, the Australian Federal Police or a legal practitioner (for the purpose of legal advice relating to whistleblowing disclosure).

Whistleblower protection
A person who is an eligible whistleblower can report qualifying misconduct by an Entity in accordance with the provisions in the Corporations Act and be protected from reprisal.
An eligible whistleblower making a qualifying disclosure is protected from:
• civil, criminal or administrative liability (including disciplinary action). However, this is only in relation to the disclosure itself, the eligible whistleblower is not granted immunity for conduct that is wrong or illegal.
• a contractual or other remedy or right being enforced against a person in relation to the qualifying disclosure (for example, termination for a breach of confidentiality under an employment contract).
Additionally, a person must not engage in conduct, or threaten (whether express or implied), to engage in conduct, that will cause detriment to an eligible whistleblower they believe, or suspect, will make a qualifying disclosure. Detriment includes, dismissal, injury of an employee in their employment, altering an employee’s position or duties to their disadvantage, harassment or intimidation, harm or injury (including psychological harm), or damage to a person’s property, reputation, business or financial position.
If an eligible whistleblower does experience conduct that is detrimental, a court may order compensation (including exemplary damages), an injunction to prevent or remedy the detrimental conduct, an apology, the reinstatement of the eligible whistleblower, and other orders the court considers appropriate.

Whistleblower policy
A public company and a large proprietary company must have a whistleblower policy which includes the following information:
• protections for whistleblowers and how the Entity will support and protect whistleblowers from detriment;
• to whom qualifying disclosures may be made and how they may be made;
• how the Entity will investigate qualifying disclosures;
• how the Entity will ensure fair treatment of employees mentioned in qualifying disclosures or to whom such disclosures are made; and
• how the policy will be made available to officers and employees.
A large proprietary company is a proprietary company that satisfies any two of the following: 100 employees (including of companies it controls), $50 million in revenue at the end of the financial year (including of companies it controls), $25 million consolidated gross assets at the end of the financial year (including of companies it controls).

ASIC report
ASIC recently reviewed the whistleblower programs of several large companies and prepared a report considering good practices regarding whistleblowing named, “Good practices for handling whistleblower disclosures identified practices.”
Some of the good practices considered in the report include: ensuring there is a solid basis for the whistleblower program (for example, procedures, policies and systems), establishing a culture that supports whistleblowers, informing and training persons who may receive a qualifying disclosure on how to receive and handle the qualifying disclosures and protect whistleblowers, applying disclosures to improve the company performance (for example, by identifying and addressing underlying issues), entrenching senior executive accountability for the program and frameworks for director oversight, and monitoring and regularly reviewing the program to identify areas of improvement.

The key takeaway is to ensure your company is familiar with its whistleblower obligations and prepared to address qualifying disclosures, including having a policy in place.
This document is intended for general information purposes only and should not be regarded as legal advice. Please contact Industry Legal if you require legal advice.
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Industry Legal provides advice to members on commercial law matters. If you have any questions relating to the above information, please contact Industry Legal on 1300 369 703 or aaaa@industrylegalgroup.com.au