From 1 January 2020, certain companies will be required to have a Whistleblower Policy that complies with the new section 1317AI of the Corporations Act 2001 (Corporations Act). As you may be aware, new whistleblower laws came into effect on 1 July 2019 and are covering the corporate, financial and tax sectors.
What is a Whistleblower Policy?
According to ASIC, whistleblowers play an important role in identifying and calling out misconduct and harm to consumers and the community. To encourage whistleblowers to come forward with their concerns and protect them when they do, the Corporations Act gives certain people legal rights and protections as whistleblowers.
From 1 July 2019, the whistleblower protections in the Corporations Act have been expanded to provide greater protections for whistleblowers. This will include requiring public companies, large proprietary companies, and corporate trustees of APRA-regulated superannuation entities to have a Whistleblower Policy from 1 January 2020.
Who needs to have a Whistleblower Policy by 1 January 2020?
Under the new laws, the following organisations must have a Whistleblower Policy in place by 1 January 2020:
- Publicly listed companies
- Proprietary limited companies that are trustees of a registrable superannuation entity
- Proprietary limited companies that meet two of the following three criteria (including related entities):
- consolidated revenue of at least $25 million
- consolidated gross assets of at least $12.5 million
- at least 50 full-time equivalent employees
Hefty fines in the event of the breach
Given the complexity of the new whistleblower legislation and the severe penalties in the event of a breach, many companies are working on preparing Whistleblower Policies now so that they can properly deal with disclosures from 1 January 2020. A failure to have a Whistleblower Policy in place by 1 January 2020 is a strict liability offence and attracts a penalty of 60 penalty units, currently:
- $12,600 for an individual
- $63,000 for a corporation