Without whistleblowers to expose wrongdoing, the corporate world would get away with much more corruption, fraud, tax evasion and human rights violations.

Employees, insiders and others who report workplace misconduct do so at great risk, which is why it's in the best interest of everyone to protect these individuals. The Australian government knows this and has proposed a bill to strengthen protections for whistleblowers.

Don't wait until the last minute to start updating your whistleblower processes. Start with this great webinar explaining How to Set Up a Whistleblower Hotline.

Read on to learn about 11 significant changes proposed in the upcoming bill, how to know if the new laws will apply to you and how to prepare your company for the changes now.

What's the Goal of the Australian Whistleblower Reform?

Specifically, many of the policies did not touch on anonymity or retaliation, and the policies were not available outside of normal business hours.

The goal with this new legislation is to consolidate existing laws to create one clear, complete regime that governs all things whistleblower-related. The proposed bill also expands on current laws by extending scopes, redefining key terms, increasing penalties and more.

Proposed Changes in the Bill

The first goal of the new legislation is to harmonize existing whistleblower regulations.

Harmonize Whistleblowing Laws

Australia passed the Public Interest Disclosure Act 2013 to provide greater protections for whistleblowers in the public sector.

In 2016, the Open Government National Action Plan improved protections for whistleblowers in the corporate sector and on matters related to taxation.

Whistleblowers in the private sector are protected by the Corporations Act 2001 and other dated acts such as the Banking Act 1959 and the Insurance Act 1973. Plus, the Fair Work Amendment Act 2015 supported an inquiry into providing similar protections in the private sector.

The new regime wants to recognize only the Corporations Act 2001 and the Taxation Administration Act 1953. All other whistleblower laws (such as those above) will be amended and consolidated into one of these two acts.

Centralizing all whistleblower rules in this way will offer improved protections because the information will be more readily available, clear and easy to follow.

Extend Scope of Protected Disclosures

Redefining Eligible Whistleblowers

Under the current regime, the whistleblowers eligible for protection must be a current officer, employee or contractor of the entity named in the disclosure. The new bill broadens the scope of “protected informants” to include:

• Former employees
• Relatives of employees (past and present)
• Suppliers to the organization
• Relatives of suppliers

Broadening the scope of protection means that more individuals with information can feel comfortable coming forward.

Redefining Who Can Receive a Disclosure

The new legislation redefines who can legally receive disclosures to include:

• Lawyers (for legal advice)
• The Australian Securities and Investments Commission
• The Australian Prudential Regulation Authority
• An auditor, actuary, supervisor or officer of the “entity” (company or organization)
• Any other person prescribed as an authorized recipient

New Emergency Disclosure

Whistleblowers who make an “emergency disclosure” to a journalist* or politician will receive protection as long as they satisfy the following four criteria:

1. The wrongdoing must be within the scope of protected disclosures.
2. The whistleblower must have already made a disclosure to an authorized recipient.
3. A reasonable amount of time must have passed since the original disclosure was made.
4. The whistleblower must reasonably believe there is imminent risk of harm to public health, safety or the financial system.

Simply, as per a report from the Australian Parliament House (APH), the new clause:

"Provides for disclosure to a third party if the original recipient of information has not responded adequately and circumstances require urgent action”

* The bill explicitly defines a journalist as one working for a newspaper, magazine, radio or similar, to rule out social media disclosures and “self-defined” journalists.

‘Good Faith’ No Longer Required

The new legislation eliminates the requirement that a whistleblower must make a disclosure in ‘good faith’, or, with honesty and sincere intentions.

Instead, this requirement will be replaced with a “reasonableness test” whereby the whistleblower must have objectively reasonable grounds to suspect an improper state of affairs.

This change will encourage whistleblowers to come forward with important information regardless of motive.

Increased Confidentiality and Anonymity

Anonymous disclosures will be allowed and protected.

If a whistleblower came forward, would you know what to do next? This Conducting Effective Workplace Investigations eBook covers everything you'd need to know.

Whistleblowers will no longer be required to provide their name to make a disclosure and it will now be an offense to reveal information that would identify a whistleblower (unless consent is given).

Increased Penalties

Under the new protection laws, those who victimize a whistleblower or wrongfully expose their identity will face much greater penalties.

The consequences for victimizing a whistleblower or wrongfully exposing their identity are rising under the new protection laws.

Those found guilty of victimizing a whistleblower will be held criminally responsible and may face fines of up to $200,000 (individual) or $1,000,000 (corporation).

Improved Legal Protections

The new legislation will strengthen legal protections currently in place for whistleblowers to ensure they’re not punished for their disclosure. Whistleblowers will receive strong protection during legal proceedings (unless the disclosure exposed their own misconduct, too).

The burden of proof for retaliation will be reversed, meaning the claimant will only need to provide evidence of a "reasonable possibility" that victimization took place. The new legislation broadens the definition of "victimization" too, making victimization easier to prove.

Financially, whistleblowing will be less risky. It will be more difficult for the defendant to make an adverse costs order (with this, the claimant is required to pay the defendant's court costs). It will also be less difficult for the whistleblower to seek restitution for loss, damage or injury.

Requirements of Whistleblowing Policies

The APH report outlines that all “public companies, large proprietary companies and companies that are trustees of superannuation entities” must implement a whistleblower policy.

The policy must be made readily available to officers and employees and must include:

• What types of disclosures are protected
• What protection is available
• How whistleblowers will be supported
• How disclosures will be investigated
• What the company will do to ensure fair treatment

Companies that fail to implement policy will be penalized.

Amendment of Taxation Administration Act 1953

The Taxation Administration Act 1953 will have its own amendments similar to those above to better protect individuals who report non-compliance with tax laws or affairs.

Because tax affairs are so confidential, certain protections (like emergency disclosures) cannot be provided to these whistleblowers. Instead, whistleblowers can make disclosures to the Commissioner of Taxation or other eligible recipients (e.g., internal auditors).

Who Does This Affect?

The bill was originally set to be passed by July 1, 2018, but it was concluded that the draft "fell short" and needed some revising. In February 2019, the bill passed both Houses.

As stated earlier, large proprietary companies and many public companies will be affected by this new legislation. A public company will be governed by this bill if it possesses two of the following three conditions:

• 50+ employees
• $25,000,000+ consolidated revenue
• $12,500,000+ consolidated gross assets

What Does this Mean for You?

First, keep an eye on how the bill progresses. Take some time to read through the full, detailed report to better understand how you may be affected and how your procedures may need updating to comply with the new laws.

Review Your Reporting Framework

To comply, for example, you may need to take a good hard look at your current reporting framework. What options do you have available to whistleblowers if they do want to disclose certain information?

A hotline is great, but only if it's actually used. Check out this webinar that teaches you how to encourage employees to use your whistleblower hotline.

The new legislation is designed to encourage whistleblowers to make disclosures, meaning companies need to prepare for an influx by implementing effective risk management strategies and thorough HR processes.

Reflect the New Regime in Your Policy

Whether or not there are drastic changes to the current draft of the bill, one portion will undoubtedly be left the same: the requirement for organizations to set up whistleblower policies.

This waiting period is the perfect time to review or develop your policy to make sure it reflects the upcoming changes.

There are a few things that should be clearly communicated:

• That the policy applies to all employees, contractors, suppliers and relatives (past and present)
• The process for dealing with protected disclosures in a thorough and timely fashion
• The protections available to whistleblowers
• The process for ensuring fair treatment of individuals involved in disclosures
• The processes in place to facilitate anonymous reporting.

Promote and Test Your Processes

Distribute the policy to anyone who could potentially be a whistleblower (read: everyone) so that key information, such as how to make a complaint and how whistleblower's will be protected, is available. With this information in mind, more people may come forward, blowing the whistle on small ideas before they become big scams.

Also, consider testing the effectiveness of your policies and reporting systems. Now is the time to make sure your processes are successful in practice before you’re facing a real whistleblower situation.

Train Staff to Deal with Disclosures

The fact that disclosures can be made to supervisors and managers (under the new regime) means these individuals will need to be equipped with the skills to respond and follow-up.

Hold workshops for key senior management personnel such as managers, supervisors and executives. Train them on adequately responding to disclosures, maintaining confidentiality and the risks associated with ignoring a disclosure or retaliation.