New protections for whistleblowers – what does it mean for charities and not-for-profits?
August 2019 | News | Claire Jones and Alex Milner
A new whistleblower protection regime, which will apply to all companies from 1 July 2019, received royal assent on 12 March 2019. An immediate focus for many charities and not-for-profits will be the new requirement that any structured as public companies (including companies limited by guarantee) and large proprietary companies must have a whistleblower policy from 1 January 2020.
*Update: 08 August, 2019* ASIC has now released a consultation paper for public comment. Importantly, the paper requests comment on whether ‘small’ charities and not-for-profits should be exempted from the requirement to have a compliant whistleblower policy.
The full consultation paper can be found here. Submissions are due by 18 September 2019.
If you wish to discuss this further or would be interested in making a submission please contact Alex Milner on email@example.com
The new regime requires charities and not-for-profits structured as public companies (including companies limited by guarantee) and large proprietary companies must have a whistleblower policy from 1 January 2020.
This policy must also be made available to all officers and employees of the company from that date. Failure to do so is an offence carrying penalties to be enforced by the Australian Securities and Investments Commission (ASIC).
The policy must include information about:
- the disclosures that qualify for protection;
- the protections available to whistleblowers;
- how and to whom a disclosure may be made;
- how the company will support whistleblowers, protect them from victimisation and ensure fair treatment of employees who are mentioned in disclosures;
- how the policy is to be made available to the company’s employees and officers; and
- how the company will investigate disclosures.
Readiness for the new regime
All corporations will need to comply with the new whistleblower regime and develop procedures to educate their officers and employees regarding their rights and obligations in the context of whistleblower/ protected disclosures.
All charities and not-for-profits which are companies should be proceeding on the basis that they will need to have a whistleblower policy which complies with the new statutory requirements in place by 1 January 2020. While ASIC has the power to provide an exemption from this requirement in relation to certain classes of companies, until such an order is made charities and not-for-profits should expect they will need to have a policy. It may be wise to have one even if such exemption is subsequently provided.*
Charities who already have a whistleblower policy should review its terms to ensure the new requirements will be satisfied.
New tax whistleblower regime
In addition to the new whistleblower regime for corporate entities, the Act also introduces a whistleblower regime for tax whistleblowers, which commences on 1 July 2019 and applies to all disclosures from that date, regardless of when the ‘act’ being disclosed occurred. Previously, while a person could make anonymous disclosures to the Australian Taxation Office, no protections existed to protect them from any unfavourable consequences of such disclosures. This new law applies where an eligible whistleblower makes a protected disclosure to either the Commissioner of Taxation or an eligible recipient (such as an auditor or tax agent) in relation to misconduct in tax affairs.
Under the new regime, the identity of the person making the protected disclosure must be kept confidential, and the person will have certain protections from prosecution or victimisation arising from the disclosure.
We encourage charities and not-for-profits to seek legal advice in relation to any actual or potential whistleblower disclosures. Prolegis Lawyers is able to provide advice in this regard and also to assist with drafting compliant and tailored whistleblower policies for your organisation. If you need our assistance or would like to explore this further, please contact Jon Cheung at firstname.lastname@example.org or Alex Milner at email@example.com.