2024 WLG Whistleblower Guide: Australia

Is there a law to protect whistleblowers? If so, which law?

Yes, there are two federal laws to protect whistleblowers in Australia. These laws are:

-the Corporations Act 2001 (Cth) (Corporations Act). This provides for a corporate whistleblower policy to be operated by corporations; and 

-the Taxation Administration Act 1953 (Cth). This provides for a tax affairs whistleblower scheme which is administered by the Australian Tax Office. 

We deal with the whistleblower laws under the Corporations Act. 

Are companies legally obliged to introduce a whistleblowing system?

Yes. Companies that meet certain prescribed thresholds must introduce a whistleblower policy.

If so, which companies must introduce a whistleblowing system (number of employees, turnover, sector)?

The following companies must have a whistleblower policy:

-public companies; 

-large proprietary companies which satisfy at least two of the following thresholds: 

-gross revenue of $10 million or more; 

-value of gross assets of $5 million or more; 

-50 employees or more; and

-proprietary companies that are trustees of registrable superannuation entities. 

What forms can a whistleblowing system take (written, verbal, email, electronic tool)?

The whistleblower policy should be in writing and made available to officers and employees, and it must contain the prescribed matters, including the circumstances in which whistleblowers will be afforded protections under the Corporations Act.

Which reports must be permitted?

Under the Corporations Act, disclosure of the following information (disclosable matters) is afforded protection:

-information which concerns misconduct or an improper state of affairs or circumstances of a company or -organization (including a superannuation entity or a trustee of the same) (regulated entity); or

information which indicates that a regulated entity or an employee of the same has:

-contravened certain Acts, including but not limited to the Corporations Act, the Banking Act 1959 (Cth), and Insurance Act 1973 (Cth); or

-committed an offense against, or a contravention of, any other law of the Commonwealth that is punishable by imprisonment for 12 months or more; or

-engaged in conduct that represents a danger to the public or the financial system.

Further, the Corporations Act will only protect eligible whistleblowers (as set out in question 7 below) who report disclosable matters if:

-the disclosure is made to an eligible recipient (as defined in 1317AAC Corporations Act); and

-the eligible whistleblower has reasonable grounds to suspect their disclosure is, in fact, a disclosable matter.

Must anonymous reporting be guaranteed?

Yes, although there are exceptions, for example, the Corporations Act permits the identity of the whistleblower to be disclosed to the Australian Securities and Investment Commission.

 

Who must be able to provide information (only employees or also external third parties)?

Under the Corporations Act, the following people (both current and former) are eligible whistleblowers:

-employees, officers, contractors, or associates;

-people who supply goods or services to a regulated entity, including volunteers; and

-spouses, relatives, or dependents of any of the above-mentioned people. 

Can companies rely on one centralized hotline or is it necessary to have one hotline for each subsidiary?

The Corporations Act is silent on whether subsidiaries can rely on one centralized hotline. In any event, the hotline must be easily accessible and maintain the confidentiality of the whistleblower's identity. For these reasons, we note that it is common for large subsidiaries to have their own hotline.

Can a whistleblowing system also be operated by an external body (e.g., consultant)?

Companies can and do contract external bodies to receive reports (disclosures), such as a hotline service run by an independent business.

Are sanctions imposed for failure to introduce a whistleblowing system?

Yes. Sanctions of up to approximately $200,000 per offense for a corporation for failing to introduce a whistleblower policy are imposed.