By now, you may have read a myriad of articles on the mandatory requirement for public and large private companies to implement and publish a Whistleblower Policy by 1 January 2020.
But it wasn’t until ASIC released Regulatory Guide 270: Whistleblower Policies (RG270) in mid-November 2019, that the regulator’s expectations on how to comply became clear.
What’s also clear is just how much confusion remains on key elements such as what’s disclosable, what qualifies for the whistleblower (WB) protections, and how organisations are expected to manage communications.
This article busts some of the common myths that we’ve been hearing.
Remember that cliché, if it looks like a duck? Well the same applies to a WB disclosure.
If an ‘eligible discloser’ (such as an employee or a supplier), makes a disclosure about a ‘disclosable matter’ to an ‘eligible recipient’ (which may be internal or external) then they will qualify for WB protections regardless of whether the disclosure is marked or labelled with any special words.
A ‘disclosable matter’ relates to ‘misconduct’ or an ‘improper state of affairs’ in relation to an entity or its related bodies corporate.
This carries two inherent difficulties for companies:
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To avoid an inadvertent breach of WB protections, we recommend:
WB policies do not cover personal work-related grievances such as interpersonal conflicts between team members or hiring decisions. The Act and ASIC do not regulate disputes that are purely employment related and this has not changed with the introduction of WB protections. In fact, there is a specific carve out.
A general rule of thumb for any employee is that if the matter only affects them as an individual then it will be unlikely to fall within WB protections, unless there is victimisation involved.
Companies need to take care in relation to what is known as a ‘mixed report’. For example, a disclosure that deals with a personal work-related grievance and includes information about a ‘disclosable matter’, such as:
Remember that complainants may be emotional, and the subject matter of the complaint may involve a multitude of things. It could take some time to unpack it and identify which issues are ‘disclosable matters’ and which ones are not.
We anticipate that very few workplace disputes will qualify for WB protections. Federal employment laws (except for the Work Health and Safety Act 2011 (Cth)) do not provide for criminal sanctions or terms of imprisonment. WB protections will apply to employees who make allegations of criminal misconduct such as fraud or sexual assault and any contraventions of the specified legislation such as the Act.
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To avoid employees incorrectly using the WB policy to air personal work-related grievances, in addition to the earlier recommendations, we suggest that:
Individuals can report anonymously under WB protections and are entitled to remain anonymous through the course of their disclosure.
On one hand, recipients of disclosures have positive obligations to:
But this doesn’t grant free licence to the discloser to say what they like.
The Whistleblower is only eligible for protection arising from a legitimate WB disclosure. If their report is a ‘mixed report’, then WB protections may not apply to the entirety of their disclosures. False or vexatious disclosures will not receive the available protections, and could expose a discloser to liability or other consequences of any misconduct they have engaged in during their employment.
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Given the time it can take to determine if a report is false, companies are far better to err on the side of caution before opening themselves up to criminal liability for failing to extend WB protections.
A breach of confidentiality for a legitimate WB discloser is an offence which may result in criminal liability.
Any WB Policy and staff training programs need to specifically address how confidentiality and anonymity will be retained.
WB disclosures that qualify for protection are required to be investigated and WB policies must stipulate how the investigation will proceed.
ASIC have now clearly communicated that (whenever possible) companies are encouraged to communicate with a discloser throughout the course of any investigation, including providing progress updates, and clarifying in the policy how investigation findings will be documented and reported (either internally or to the discloser).
Notably though, the Act does not require companies to continuously communicate with the discloser or provide them with updates on the investigation, particularly if this communication may jeopardise the confidentiality of the discloser or overall investigation.
Continuous communication with disclosers is a discretionary matter for each company to consider on a case-by-case basis. We do not recommend that companies enshrine such an obligation in a policy, as it may be impractical, and in some cases, may jeopardise an organisation’s ability to provide required protections.
As a practical matter, Companies should be aware that WB disclosers will expect action, and a failure to communicate with the discloser may result in an attempt to make the complaint external.
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Disclosers will not be afforded WB protections if they go straight to the media.
To receive WB protections, a discloser must meet the requirements of the Act in relation to a ‘public interest’ or ‘emergency’ disclosure – meaning the discloser must:
Ultimately, a discloser will have to jump through these hoops before they can go straight to the media with a complaint. These reasonably high thresholds ensure that companies have an opportunity to take appropriate and measured responses to complaints, without being held to ransom by threats of premature public disclosure.
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WB policies were never intended to be a one size fits all policy and each company will need to adopt their own procedures that suit the needs of the company.
A meticulous and tenacious nature has made Olivia Christensen one of Brisbane’s “go-to” lawyers for listed and unlisted companies. Olivia’s love of strategy and ability to think commercially makes her an excellent corporate advisory lawyer. She has helped both public and private companies achieve their business objectives in a range of transactions from mergers and acquisitions to schemes of arrangement, capital reorganisation and takeovers. As an equity capital markets specialist, Olivia has significant capital raising and IPO experience and regularly advises on equity and hybrid raisings and investments. You may connect with Olivia via email or LinkedIn
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