Federal report recommends standardising Australia’s fragmented and inconsistent whistleblowing legislation
A new report from the Commonwealth Parliament on Whistleblowing Protections (the Report), recommends that whistleblower protections across public and private sectors should be standardised. This recommendation affects all government and non-government organisations including schools. The recommendation also comes after other recent reports which show that the education sector needs to improve its approach to whistleblowing practices and encourage people to speak up about inappropriate or illegal conduct in the workplace.
What was the focus of the Report?
The Report was commissioned after the 2016 Moss Review showed significant deficiencies in the Public Interest Disclosure Act 2013 (Cth) which applies only to public sector employee whistleblowing. Different state and territory versions of this Act also exist. Corporate whistleblowing protections also exist in the Corporations Act 2001 (Cth) and various other legislation in the financial services industry. Non-government schools, as not-for-profit (NFP) entities, are not governed by any particular legislation on the topic, but are subject to general governance standards which relate to whistleblowing in registration legislation and the Australian Charities and Not‑for‑profits Commission Act 2012 (Cth).
Due to the findings in the Moss Review, the Report was extended to focus on whistleblowing protections as whole across both public and private sectors and found that whistleblower protections remain largely theoretical with little practical effect in either the public or private sectors. According to the Report, this was due to the near impossibility under current laws of:
- protecting whistleblowers from reprisals (i.e. from retaliatory action)
- holding those responsible for reprisals to account
- effectively investigating alleged reprisals
- whistleblowers being able to seek redress for reprisals
The Report also identified that the current legislation for whistleblower protections was fragmented, inconsistent and confusing.
What action did the Report recommend?
The Report made 35 recommendations including:
- consistency of whistleblower legislation across all sectors including NFP
- disclosable conduct by broadening the definition of reportable wrongdoing
- broadening the definition of whistleblowers to include current and former staff
- a tiered approach to internal, regulatory and external disclosures
- provisions for anonymity across all sectors including NFP
- mechanisms to combat reprisals including protections, remedies and sanctions
- removing the ‘good faith’ requirement for making whistleblowing disclosures (meaning that a whistleblower’s subjective motivations for making a disclosure will no longer be under examination)
- the possibility of introducing a rewards scheme to incentivise potential whistleblowers
- the establishment of a Whistleblower Protection Authority to provide oversight and guidance
Following the Report’s release, the Minister for Revenue and Financial Services released the terms of reference for the Expert Advisory Panel on whistleblower protections. The Panel is expected to review and comment on draft legislation which deals with both tax and corporate whistleblowers, with legislation introduced and finalised by 30 June 2018.
Why care about whistleblowing?
Despite no draft legislation being presented yet for the NFP sector, as stated in the Report, “effective whistleblowing provides an essential service in fostering integrity and accountability while deterring and exposing misconduct, fraud and corruption.” While there is no consistent, single definition of a whistleblower in existing legislation, the general view is that a whistleblower is a person who makes a disclosure outside normal business channels, whether anonymously or not, which relates to inappropriate conduct such as corruption, fraud or some other illegal or undesirable activity.
Inappropriate conduct which may be the subject of whistleblowing could include conduct which:
- is dishonest and/or unethical
- amounts to gross mismanagement, serious and substantial waste, or repeated instances of breaches of organisational policies and procedures
- is fraudulent or amounts to corrupt practice (including the offering or accepting of bribes and/or secret commissions)
- is illegal or breaches any law or regulation applicable to the school
- amounts to coercion, harassment or discrimination by, or affecting, any employee of the school
- is misleading or deceptive conduct of any kind, including conduct or representations which amount to improper or misleading accounting, or financial reporting practices
- poses a danger to the health or safety of any person and is being ignored, or is not being dealt with effectively through normal internal processes
- poses a significant threat to the environment and is being ignored, or is not being dealt with effectively through normal internal processes
- may cause material financial or non-financial loss (including reputational damage) to a school
- would otherwise be considered, by a reasonable person, to be serious improper conduct.
What are a school’s current duty to whistleblowers?
Australia currently does not have a uniform or consistent whistleblowing scheme and, as stated in our previous article, whistleblowing is regulated by various State and Commonwealth legislation. A common theme of Australian whistleblower laws is the offer of protection (within limits) to people who expose or ‘blow the whistle’ on crimes or other forms of misconduct committed in an organisation. In addition to the whistleblower laws, various other laws exist which may compel people to report illegal conduct. For example the reporting of child abuse may be mandatory (see our previous article).
It is important to recognise that whistleblowing may not always be protected if it is anonymous and this is one of the key factors driving the new recommendations in the Report.
What should be in your school whistleblower program?
As stated in our article from last week, fraud and theft are a huge risk in NFP schools, and NFP schools are also not immune to bullying, harassment or child abuse. By having a good whistleblower program in place, schools create a safe and secure environment that encourages staff and students to make disclosures.
The reporting procedures are typically outlined in a formal whistleblower program which should be easily accessible to staff and have key features as outlined in our previous article including:
- clear objectives of the purpose of the program
- guidance on what conduct is ‘reportable conduct’ (eg conduct that is illegal or breaches any code, law or regulation applicable to the school)
- allocation of resources to implement and affect the program (eg appointing a Whistleblower Protection Officer and establishing an anonymous, independent/external reporting line such as that offered by Your-Call)
And with the financial and reputational cost of fraud, misconduct or corruption claims for a school, a whistleblower program can be a useful tool to maintain an appropriate school culture for both students and staff.
About the author
Lauren Osbich is a Legal Research Consultant at Complispace and a School Governance Reporter. She can be contacted here.