New Whistleblower Obligations Start on 1 July 2019

Published
28 March 2019

What is the New “Whistleblower Legislation”?

The Commonwealth Government has introduced changes to the Corporations Act 2001 (Cth) (Corporations Act) that impose new obligations on particular types of organisations to protect whistleblowers. The Treasury Laws Amendment (Enhancing Whistleblower Protections) Act 2019 (Cth) (Whistleblower Law) amends the Corporations Act and was assented to on 12 March 2019.

It strengthens and consolidates the obligations of an organisation to protect from detriment individuals who bring wrongdoing to light about the organisation, its employees or officers, or related bodies corporate.

When Does It Come into Effect and What is Required?

The Whistleblower Law commences on 1 July 2019.  

Different parts of the Whistleblower Law however come into effect at different times.

From 1 July 2019 enhanced protections will apply to employees that “blow the whistle” and employers will need to comply with these protections.

From 1 January 2020 public companies and large proprietary companies must have a whistleblower policy in place.  Failure to comply with this requirement is a criminal offence and significant penalties may apply.

The whistleblower policy must contain procedures for receiving and investigating disclosures and how it will protect whistleblowers. It must also set out how the policy will be made available to employees and officers of the company.

The Government may introduce further regulations closer to the effective dates of the Whistleblower Law that provide further guidance in relation to what’s required or impose additional obligations.

Does it Apply to Schools?

It applies to all organisations including schools who are public companies or large proprietary companies.

A company limited by guarantee is a (type of) public company registered under the Corporations Act.

Many schools are companies limited by guarantee. Therefore, if a school is a company limited by guarantee it is a public company and must comply with the Whistleblower Law. i.e. they must comply with the whistleblower protections by 1 July 2019 and have a whistleblower policy in place by 1 January 2020.

If a school is however an incorporated association registered under a state-based law such as an Associations Incorporation Act in a particular state, or established under a particular Act of Parliament, it will not be a public company or large proprietary company and probably won’t be required to comply with the Whistleblower Law.

Schools that are not sure of their corporate status need to seek legal advice so that they can determine if they need to comply with the Whistleblower Law and any related regulations.

Each school should also be aware that even if it is not a public company it may have related entities that are public companies (e.g. a foundation or a company set up to run a business at the school).

What Should Schools Do Now?

Schools should determine their corporate status to establish if the Whistleblower Law applies to them (or any of their related entities). If they are not sure of their status, they should seek legal advice.

Schools that are public companies or large proprietary companies must ensure that they have:

  • protections in place for their “whistleblowing employees” in compliance with the provisions of the Whistleblower Law and any related regulations by 1 July 2019
  • a whistleblower policy that meets the requirements set out in the Whistleblower Law and any related regulations by 1 January 2020.

This is particularly important as from 1 January 2020 schools who are required to have a policy in place, but do not comply, commit a criminal offence and face significant penalties.

Even though the legislation allows a six-month transition period before public companies and large proprietary companies must have an actual whistleblowing policy in place, it will be difficult for organisations to offer the protections to employees required under the legislation by 1 July 2019 without a well-thought out whistleblower policy and related procedures and processes in place.  Therefore, many schools may find it makes more sense to also have their whistleblower program in place by 1 July 2019.  

It should be noted that even if a school is not required to have a policy in place under the Whistleblower Law (because it is not a public company or a large proprietary company) it is nevertheless best practice for all organisations to have a whistleblower policy in place and to offer protections to employees who “blow the whistle”.

Schools should also have a clear complaints-handling procedure, as well as an internal grievance process, in place before the commencement of the Whistleblower Law so that issues can be dealt with under these mechanisms rather than being escalated to the point of needing to be dealt with under a whistleblowing program.

Madeleine McDonell

Madeleine is a Legal Research Consultant at CompliSpace. Madeleine has worked as a solicitor (in both Sydney and London) for over twenty years. She has also recently taught a corporations law subject at The University of Sydney Business School for several years. Madeleine holds a bachelor’s degree in Arts/Law from the University of New South Wales and a Graduate Certificate in Business Administration from The University of Technology.