Preparing for the New Whistleblower Obligations

Published
30 May 2019

The strengthened Whistleblower Protection Laws in the Corporations Act 2001 (Cth) (Corporations Act) have been discussed in several recent School Governance articles, where we describe:

  • the new protections for “eligible whistleblowers” under the Corporations Act that commence on 1 July 2019 and the requirement for public companies and large proprietary companies to have a Whistleblower Policy in place by 1 January 2020
  • the penalties that may apply for contravening the Whistleblower Protection Laws, by virtue of changes made to the Corporations Act by the Treasury Laws Amendment (Strengthening Corporate and Financial Sector Penalties) Act 2019 (Cth)
  • the link between the use of whistleblowing protections and the ineffective handling of complaints.

Reflecting the high level risks associated with not having robust complaints systems in place, and the imminent commencement date, many schools are continuing to ask questions about how the new laws apply to them and how best to prepare. This article answers some of the questions that have been asked by schools following James Field’s webinar.

Is your school registered as a company under the Corporations Act?

Question:

Please clarify which organisations are within the ambit of the strengthened whistleblower provisions in Part 9.4AAA of the Corporations Act.

Answer:

If a disclosure by an “eligible whistleblower” in relation to a “regulated entity” meets particular criteria, the disclosure qualifies for protection under the Corporations Act. The first paragraph of the definition of “regulated entity” in the new section 1317AAB of the Corporations Act is “a company”. Section 9 of the Corporations Act defines “company” to mean “a company registered under this Act”. In other words, all companies registered under the Corporations Act must provide the protections to eligible whistleblowers if a qualifying disclosure is made in relation to them.

Further, public companies and large proprietary companies must have in place, by 1 January 2020, a whistleblower policy that meets the requirements of the new section 1317AI.

Many schools are companies limited by guarantee, which is a type of public company. These schools must not only comply with the requirement to provide the protections to eligible whistleblowers by 1 July 2019 but they must also have a whistleblower policy in place by 1 January 2020.

If you would like to check as to whether your school is a company limited by guarantee go to https://abr.business.gov.au/ and type in the name of your school, or organisation.

In addition the Australian Charities and Not-for-profits Commission’s website may be of assistance in clarifying a school’s corporate status, as each organisation’s governing document is attached to its entry on the ACNC Charity Register: see https://www.acnc.gov.au/charity to search for your school.

Question:

How would you advise developing a Whistleblower Policy or Program for an incorporated association?

Answer:

Many organisations that are not incorporated under the Corporations Act implement whistleblower programs as part of a good governance framework. This includes incorporated and unincorporated associations, as well as other organisations that are established under Acts of Parliament.

The design issues in developing a whistleblower program for these entities are similar to the design issues for corporations, although the nature of the available protections differ. Generally, an incorporated association would offer similar whistleblower protections to a corporation, but they do not have the reinforcement of the Corporations Act. The types of protections offered to whistleblowers by an incorporated association may include:

  • confidentiality and anonymity
  • the provision of a supportive environment
  • protection from retaliation, harassment or victimisation
  • not subjecting whistleblowers to internal disciplinary action for having blown the whistle.

Who are included as “eligible whistleblowers” and “eligible recipients”?

Question:

Is an HR Manager an “Eligible Recipient” under the Corporations Act?

Answer:

Under the new section 1317AAC(1) of the Corporations Act, an “eligible recipient” of a disclosure will include:

(a) an officer or senior manager of the company; and

(d) a person authorised by the company to receive disclosures that may qualify for protection under Part 9.4AAA.

The terms “officer” and “senior manager” are both defined in section 9 of the Corporations Act.

Unless your HR Manager falls within the definition of “senior manager” they will not be an eligible recipient unless they are specifically authorised by the school to receive disclosures. We recommend that the school’s governing body formally authorise those individuals whom it wishes to receive disclosures.

Question:

Please clarify whether an eligible whistleblower includes a parent, or other key stakeholder from a different school.

Answer:

The definition of “eligible whistleblower” in the new section 1317AAA of the Corporations Act is very broad, but it does not include all the people that a school would consider to be stakeholders.

If wrongdoing was occurring within a school, a disclosure might well come from a parent or a stakeholder in another school and should be taken seriously and investigated as appropriate. The person who makes the disclosure, however, would not be an “eligible whistleblower” unless they otherwise fit within the definition in section 1317AAA of the Corporations Act. If the person was not an eligible whistleblower, the disclosure would not qualify for protection under Part 9.4AAA of the Corporations Act.

How do you prepare for the strengthened Whistleblower Protection Laws?

Question:

What’s the difference between a Whistleblower Program and a Whistleblower Policy?

Answer:

A school’s Whistleblower Program documents how the school manages whistleblower disclosures. It sets out key roles and responsibilities, the types of conduct that should be reported, who can make disclosures, how the program is accessible to these individuals, the nature of the support and protections that these individuals will receive, how to make a whistleblower disclosure and how an investigation will be conducted, as well as internal reporting procedures.

A Whistleblower Policy is designed to be published on a school’s public website. It articulates the school’s commitment to ethical behaviour and its encouragement to stakeholders to report wrongdoing. It describes how to make disclosures and how whistleblowers will be supported and protected.

Question:

If we already have a whistleblower policy in place, how do you suggest we go about identifying any gaps in our current policy?

Answer:

If you subscribe to CompliSpace’s Whistleblower Program, please note that we are upgrading it to reflect the significant recent changes made to the whistleblower regime under the Corporations Act.

If not, your policy gap analysis could start with section 1317AI(5) of the Corporations Act, which lists the information that whistleblower policies must contain which is:

(a) information about the protections available to whistleblowers, including protections under Part 9.4AAA; and

(b) information about to whom disclosures that qualify for protection under Part 9.4AAA may be made, and how they may be made; and

(c) information about how the company will support whistleblowers and protect them from detriment; and

(d) information about how the company will investigate disclosures that qualify for protection under Part 9.4AAA; and

(e) information about how the company will ensure fair treatment of employees of the company who are mentioned in disclosures that qualify for protection under Part 9.4AAA, or to whom such disclosures relate; and

(f) information about how the policy is to be made available to officers and employees of the company; and

(g) any matters prescribed by the regulations for the purposes of this paragraph.

In relation to paragraph (g), we note that no regulations have been made to date.

Question:

How do we prepare for the new whistleblower protections?

Answer:

We recommend that, if you do not already have them, schools put in place robust processes for managing internal grievances, complaints, child protection notifications and capturing workplace health and safety risks and incidents.

We have discussed in our recent School Governance articles The Link between Ineffective Complaints Handling and the Use of Whistleblower Protections Part OneandThe Link between Ineffective Complaints Handling and the Use of Whistleblower Protections Part Two how schools can strengthen their complaints handling processes to ensure that they are relevant and accessible to stakeholders, and that complaints are managed and resolved effectively.

Question:

Please explain the relationship between managing complaints and investigating whistleblower disclosures?

Answer:

The provisions in Part 9.4AAA of the Corporations Act deal only with whistleblowing and do not make any specific references to companies’ other pathways for receiving information about wrongdoing, such as their internal complaints handling programs, policies and procedures.

Much of the published research on whistleblowing (see, for example, “Whistling While They Work” at http://www.whistlingwhiletheywork.edu.au/ ) has found that people who report wrongdoing are more likely to report it internally than externally. Several commentators have suggested that whistleblowing usually occurs when internal pathways have been exhausted, are non-existent or failed in their purpose to manage a complaint.

It is therefore critical that organisations’ processes for internal grievances and external complaints handling are well-communicated, easily accessible and effectively managed in order to adequately provide for and support individuals who wish to raise concerns or issues.

Training and educating your staff, contractors and volunteers about your complaints handling and workplace grievance programs and policies will inform them about the types of matters that can be reported through those processes.

Helen Juillerat

Helen is a Legal Research Consultant at CompliSpace. She completed a Bachelor of Laws degree at the University of Queensland and has worked in legal publishing and in roles in the public higher education and health sectors focusing on governance, policy and compliance.