What new whistleblowing protections mean for the public sector

Expanded provisions mean that whistling while you work has taken on new meaning in the public sector, writes Nathan Luker.

At the beginning of the year ASIC began auditing companies across the nation to check they have compliant whistleblower policies in place.

Nathan Luker

The audits follow changes to the Corporations Act in July this year which outline expanded whistleblower provisions and require public companies, large proprietary companies, and corporate trustees of APRA regulated superannuation entities to have policies in place by 1 January 2020.

The new regulations were designed to encourage and protect whistleblowers to speak up while discouraging corporate fraud and misconduct by strengthening previously fragmented and confusing legislation.

The expanded protections incorporate a wider range of reportable misconduct, protect a larger group of people, allow anonymous disclosures, create more avenues for redress and increase potential penalties for employers.

To date the response to the new regulations has largely been positive, with many seeing the increased protections for whistleblowers as a reflection of the public’s desire for greater accountability (and consequences where warranted) for company directors.

What’s most caught the attention of corporate Australia, however, is the dramatically increased penalty framework under the new regulations.

Tough new penalties

As of 1 January, individuals will face fines of up to $1 million for detriment to whistleblowers and confidentiality breaches (errors of judgement included), as well as jail sentences of up to two years, and corporate fines up to $525 million, and the public sector isn’t exempt.

While state and federal government agencies must comply with relevant Public Interest Disclosure legislation for whistleblowers, a number of them are affected by complex applicability issues which require them to comply with both the Public Interest Disclosure requirements and also the Corporations Act corporate sector requirements.

This group of agencies includes local councils and transport providers across Australia.

Similarly, NDIS providers may be caught by complicated applicability questions that require them to comply with the NDIS Act and the Corporations Act, and in some cases these two acts may hold conflicting standards.

For this reason, government agencies should seek independent legal advice to clarify their position and confirm compliance requirements.

The new corporate sector whistleblowing requirements enforce a seismic shift in the protection regime for whistleblowers in Australia and at a minimum, government agencies should use the new requirements as a benchmark for community and regulatory expectations.

While technically some agencies do not have to comply with the new Corporations Act, their stakeholders are likely to expect these standards of them and serious reputational damage could ensue if they are ignored.

The true test for government agencies isn’t just one of being compliant under the relevant act, it’s what happens when disclosures are made.

Ticking all of the whistleblowing compliance check boxes doesn’t automatically result in an organisation being prepared for, or equipped to, manage a disclosure.

This requires thorough analysis of the systems and procedures that underpin the policy, regular education and training of eligible recipients, review of how the policy intersects with adjacent guidelines and rigorous testing.

Eligible recipients extended

A significant reform to the Corporations Act is the expansion of who can receive a disclosure or be an eligible recipient, with the definition now extending to senior managers, directors and auditors.

Given these roles can be occupied by hundreds of people in a government agency, identifying and regularly training these individuals on their responsibilities is critical. This is especially important given the significantly increased risk to individuals for mishandling a whistleblower report, including the penalties outlined above as well as career ending reputational damage.

Recent times have seen six Royal Commissions in as many years, and public confidence in our leaders fall to an all-time low, therefore state and federal government agencies need to lead by example when it comes to implementing best practice whistleblowing policies and role modelling ‘speak up’ cultures.

The public won’t accept anything less, and if departments need any more motivation to act, they need only cast their eyes over the new penalty framework.

*Nathan Luker is CEO of independent whistleblowing programs provider Your Call.

Comment below to have your say on this story.

If you have a news story or tip-off, get in touch at editorial@governmentnews.com.au.  

Sign up to the Government News newsletter

Leave a comment:

Your email address will not be published. All fields are required