Protections for Whistleblowers
These scandals increased public awareness of whistleblowers, their experiences and past treatment and made it clear that the previous whistleblower protection regime was completely inadequate.
Following a long period of policy development and public consultation by various parliamentary and governmental reviews (which Maurice Blackburn made submissions to), the federal government significantly reformed the private sector whistleblower regime.
On 1 July 2019 it introduced the Treasury Laws Amendment (Enhancing Whistleblower Protections) Act 2019 (Cth) which amends the Corporations Act and covers the private sector.
The Whistleblower Act strengthens the whistleblower regime in a number of ways, including by:
- permitting anonymous public interest disclosures;
- broadening the definition of a whistleblower to include both current and former employees, officers, services or goods suppliers, as well as their spouses, relatives, and dependants
- extending the range of subjects for disclosures to include misconduct, an improper state of affairs, or a breach of the law
- requiring a whistleblower to have reasonable grounds to make a disclosure
- imposing large civil penalties as well as criminal offences for causing or threatening detriment to, or victimising, a whistleblower and for breaching a whistleblower’s confidentiality
- protections for whistleblowers in limited circumstances to make complaints to journalists or parliamentarians
- requiring all large companies to have a whistleblower policy
Whistleblowers in the Commonwealth public sector (employees of Commonwealth agencies, departments and bodies) are also protected under the Public Interest Disclosure Act 2013 (Cth). These whistleblowers can make complaints anonymously about conduct that contravenes a Commonwealth, state or territory law, is corrupt, perverts the course of justice or is an abuse of public trust. Whistleblowers who make protected disclosures are protected from reprisal.
In addition to these Federal whistleblwer protections laws, each State has their own whistleblower protection laws. For more information about how whistleblowers are treated in your state, please contact our offices.
Thinking of becoming a whistleblower? Speak to the legal experts in this area.
Why whistleblowers need to seek legal advice
The best thing you can do to minimise your risk is to get advice very early on. Whistleblowing is invariably stressful and difficult. It involves speaking up against an entrenched culture of illegality or impropriety and, when that happens, the people responsible for that culture will often retaliate.
We can help you navigate the threat of retaliation, protect your reputation and help you seek compensation and just outcomes.
We protect your rights
Sue was a Chief Operating Officer in a large multinational organisation. Sue found out about some dodgy practices within her organisation and lodged a formal complaint/notification under the organisations whistleblower policy.
Shortly after, Sue was sacked. No credible reason was provided and she had an extensive history of being a top, high achieving performer. Sue was extremely concerned about the damage to her reputation and the impact that a termination would have on her finding another job.
We wrote to Sue’s employer alleging that they had breached both the Fair Work and Corporations Act, and sought compensation and penalties to be imposed. We subsequently filed a claim in the Fair Work Commission. Before the conciliation hearing, the employer folded.
We obtained a 7 figure settlement package for Sue which included lost wages, compensation for the mental anguish she had suffered, bonus and legal fees. The employer was prevented from talking about Sue in a way that damaged her reputation.
Sue was extremely pleased with the outcome and subsequently found another job, much quicker than she thought.
Frequently Asked Questions
What is Maurice Blackburn doing to protect whistleblowers?
In recent years, a series of scandals involving the Commonwealth Bank, IOOF, 7 Eleven, NAB and Reserve Bank owned company, Securency, have highlighted the difficulties experienced by employee whistleblowers. However, current laws governing the private sector provide little protection and are in need of urgent reform.
Maurice Blackburn welcomes the recent report by the Parliamentary Joint Committee on Corporations and Financial Services recommending stronger whistleblower protections..
The Joint Committee received submissions, including from Josh Bornstein, National Practice Team Leader, who argued for adequate financial compensation for whistleblowers.
The Joint Committee has recommended:
- that protections should apply for disclosure of conduct across a broad range of contraventions of Commonwealth laws, including tax evasion
- introducing a reward system for whistleblowers
- extending the protections to current and former employees, as well as the not-for-profit sector and confirming the importance of anonymous whistleblowing
- consistent protections for public and private sector whistleblowing.
Watch this space
The Joint Committing having now made recommendations as to law reform, this area of law is assured of change. Maurice Blackburn will continue its lobbying activities to ensure that whistleblowers are protected from reprisal action and encouraged to come forward to maintain proper corporate compliance with the law.
What are the protections for whistleblowers in the private sector?
Protections are notionally available for whistleblowers in the private sector. However the reality is that in the overwhelming number of cases, their limitations mean that they are rarely successfully invoked.
The Corporations Act 2001 (Cth) seeks to confer protections on employees who give information relating to breaches of that Act or the Australian Securities and Investments Commission Act 2001(Cth). Whistleblowers reporting on breaches of these acts are said to be protected from defamation, civil and criminal liability. Protections include:
- qualified privilege against defamation
- preclusion from contractual or other remedies being enforced against the whistleblower
- protection from civil and criminal liability for making the disclosure
- the possibility of criminal sanctions being imposed on those who take reprisal action against whistleblowers.
However, there are a number of requirements that must be first satisfied prior to an individual being granted the protection, including that they must:
- be an officer or employee of the company, or a person who has a contract for the supply of services or goods to a company, or an employee of the contracting company
- provide their name before making the disclosure
- have reasonable grounds for asserting that the company has contravened the relevant legislation;
- act in ‘good faith’
- make their disclosure to:
- an auditor of the company in question
- a director, secretary or senior manager of the company
- another person authorised to receive disclosures, such as an outsourced internal audit team.
In addition, it is important to note that the whistleblower protection regime under the Corporations Act imposes a number of limits, including:
- the scope of individuals who are protected – for example, former employees are not protected
- anonymity is not permitted – individuals must disclose their identity
- only particular breaches are protected – “qualifying disclosures” only extend to the breaches of the Corporations Act and the ASIC Act. Breaches of other legislation may only be covered where secondary offences under those Acts have occurred.
Are whistleblowers protected by the Fair Work Act?
While there are very limited protections available to whistleblowers in the private sector under the Corporations Act, the Fair Work Act 2009 (Cth) provides an alternate avenue for protection, in some circumstances, for whistleblowers making complaints to their employer in relation to aspects of their employment.
Under the Fair Work Act it is unlawful for an employee to be adversely treated at work because they have exercised, or propose to exercise, a workplace right. A “workplace right” can include an individual making a complaint or inquiry in relation to their employment. Adverse treatment can include:
- an employee’s employment being terminated
- an employee being “injured” in their employment, through, for example the institution of performance management
- an employee’s employment being “altered to their detriment”, through, for example, demotion
- an employee being discriminated against in comparison to other employees in the workplace.
The important requirements here are that:
- the complaint or inquiry must be in relation to the “employment”, although this phrase has been broadly construed
- the adverse action must have been taken against the employee “because of” the employee’s complaint or whistleblowing activity.
The Employment law team at Maurice Blackburn has represented clients who have made whistleblower complaints in General Protections Adverse Action claims in instances involving bribery, corruption, bullying and OH&S breaches. We also represented an employee who was a whistleblower on bribery and corruption within Securency, a company owned by the Reserve Bank of Australia.
A majority of these cases have settled out of court and were settled with mutual confidentiality obligations preventing either party from disclosing both the content of the complaint and the settlement of it.
Are public sector employee whistleblowers protected?
Public sector employees have stronger whistleblower protections than private sector employees at both State and Commonwealth levels.
Victorian public sector employees can make a protected disclosure about a Victorian public body or public officer under the Protected Disclosure Act 2012 (Vic) on the basis that a person, public officer or public body has engaged, is engaging or proposes to engage in improper conduct.
“Public bodies” and “Public Officers” can include government departments and agencies, statutory authorities, local councillors, universities, public hospitals and government appointed boards and committees.
“Improper conduct” includes corrupt conduct, a criminal offence or conduct that would constitute reasonable grounds for dismissal. Depending on the public body or public officer concerned, a protected disclosure can be made to a nominated person within the public body, Independent Broad based Anti-Corruption Commission (IBAC) or the Victorian Ombudsman.
Protection afforded to Victorian public sector employees includes:
- the ability to sue a person for damages or to seek an injunction against them if they take detrimental action in reprisal for a protected disclosure
- immunity against civil or criminal liability or administrative process, including disciplinary action for making the disclosure
- immunity against any penalty that may arise from disclosing information that would otherwise breach confidentiality provisions
- a privilege against a defamation action
- recourse to court ordered remedies for reprisal action.
Criminal charges can also be brought against any person or body that reveals the identity of the person who made an assessable disclosure or the contents of an assessable disclosure.
Commonwealth public sector employees are able to make a protected disclosure under the Public Interest Disclosure Act 2013 (Cth) if there has been “disclosable conduct” by either an agency, a public official in connection with their position or an officer or employee of a contracted service provider. “Disclosable conduct” can include conduct that contravenes a Commonwealth, state or territory law, is corrupt, perverts the course of justice or is an abuse of public trust.
Commonwealth public sector employees who make a protected disclosure may receive protection from civil and criminal liability and support and protection from any reprisal as a consequence of the disclosure.
Protection afforded to Commonwealth public sector employees includes:
- protection of the discloser’s identity
- immunity from civil, criminal or administrative liability
- support and protection from reprisal
- recourse to court ordered remedies for reprisal action.
Do whistleblowers in the United States have better protection than in Australia?
In contrast to the situation in Australia, whistleblower laws in the US confer much greater protections and incentives for employees and are considered to be an essential feature of a robust corporate governance regime. In some situations, Australian employees may be eligible for the significant protections and incentives offered under these US laws.
Following the global financial crisis in 2010, the US Congress enacted legislation which established the US Securities and Investment Exchange (SEC) Whistleblower Program. The SEC Whistleblower Program offers eligible whistleblowers significant employment protections, monetary awards and the ability to anonymously report on possible securities violations.
Importantly, each year, Australia has ranked in the top five countries for individuals submitting information to the SEC Whistleblower Program. In August 2016, an Australian employee of BHP Billiton was awarded $3.75 million as a result of successful enforcement arising from information the employee provided to the SEC concerning BHP’s securities violations.
The law in the United States is clear: employers may not, directly or indirectly, discharge, demote, suspend, threaten, harass, or in any way discriminate against whistleblowers who:
- provide information to the SEC
- initiate, testify in, or assist in an SEC investigation or related enforcement action
- make any disclosures required or protected by law.
If a whistleblower is subjected to retaliation in violation of the law, they have the right to immediately sue their employers in federal court, without having to exhaust the administrative process before filing. The types of remedies available include reinstatement with equivalent seniority, back pay with interest, reimbursement of legal fees and other litigation related expenses.
SEC whistleblowers are able to remain anonymous, as long as they are legally represented and provide their legal representative with a signed copy of their whistleblower submission, signed under the penalty of perjury. However, at the point they apply to receive a monetary award, they are required to disclose their identity to the SEC, who will make every effort to keep it confidential.
Under the SEC Whistleblower Program, the SEC is required to pay eligible whistleblowers 10-30% of the monetary sanctions collected as a result of a successful SEC enforcement action or actions in which the sanctions exceed $1 million. In recent years, the SEC has secured more than $4 billion in monetary sanctions per year against offending companies.
A number of factors are considered by the SEC in determining the size of an award to a whistleblower, including:
- any culpability of the whistleblower in the illegal activity
- significance of the information provided
- assistance provided by the whistleblower
- participation of the whistleblower in internal reporting systems.
Under the new whistleblower protection regime an individual can access the whistleblower rights and protection if
- The discloser is an eligible whistleblower
- The discloser discloses information about a regulated entity (which can be done anonymously)
- to an eligible recipient, or ASIC or APRA
- The discloser has reasonable grounds to suspect that the disclosure indicates misconduct or an improper state of affairs or circumstances or breach of the law
Who is an eligible whistleblower?
Individuals who are current or former:
- employees and officers;
- Contractors (and their employees) who supply services or goods, including volunteers;
- Superannuation trustees, custodians or investment managers; and
- Spouses, relatives and dependants.
Who is a regulated entity?
- a company registered with ASIC under the Corporations Act; and
- a foreign corporation carrying on business in Australia and a body corporate incorporated under state or territory law that is a trading or financial corporation.
Who can receive disclosures (eligible recipient)?
- Officer (director and company secretary of the entity, and external administrator appointed to the entity.)
- Senior manager
- Auditor or member of audit team (internal or external)
- Person authorised by company (internal or external – e.g. hotline)
- Superannuation trustee
- ASIC or APRA
What are the protections for Whistleblowers?
- Immunity for making their disclosure (criminal and criminal proceedings)
- Confidentiality of their identity or information that may identify them, and
- Protection from detriment or victimisation
What if a whistleblower is subject to detriment or victimisation?
Whistleblowers can take action to seek compensation, penalties (paid to them) or other orders through the Court. Other orders could include apologies and reinstatement.
The penalties under the new whistleblower protection regime are high. For a body corporate it is up to $10.5 million while for an individual the penalties could be up to $1.05 million.
Josh BornsteinNational Head of Employment Law, Melbourne
"When the forces of darkness are on your back, you want Josh at your side," Julian Burnside QC
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