What you need to know
- Certain entities will be required to have a compliant whistleblower policy from 1 January 2020
- ASIC has provided guidance on establishing a compliant policy
What you need to do
- Understand the requirements for certain entities to have a whistleblower policy in place
- Ensure your organisation's whistleblower and related policies are compliant with the whistleblower regime
- Consider workplace training for all officers and employees that may have duties under the whistleblower legislation
Whistleblower protections under the Corporations Act
On 1 July 2019 amendments to the Corporations Act 2001 (Cth) creating a new regime of protections for whistleblowers came into effect. Our previous Alerts from February 2019 and August 2019 outline the key changes that may affect your business.
One of the key requirements under this new regime is that public and large proprietary companies must have a compliant whistleblower policy in place within their organisation by 1 January 2020.
Guidance on Whistleblower Policies
ASIC has recently released a final version of its Regulatory Guide on Whistleblower Policies, which outlines guidance on establishing a compliant policy and good practice for implementing and maintaining the policy.
A draft Regulatory Guide was released by ASIC in August 2019 for consultation.
Submissions on the draft raised concerns about its legalistic approach and the regulatory burden of complying with the guidance.
In response, in the final form of the Regulatory Guide, ASIC has made it clearer as to what organisations must include in a whistleblower policy in order to comply with the whistleblower regime, and what is considered a 'good practice tip' but is not essential for compliance. Other changes which give companies greater flexibility in how policies are structured and implemented include recognition that companies may choose to extend their policies to disclosures that do not have statutory protection; and removal of references to particular internal structures for dealing with disclosures.
Exemption for small not-for-profits or charities
In order to ease the potential regulatory burden faced by certain small companies, ASIC has announced an exemption for eligible public companies from the requirement to have a compliant whistleblower policy.
Under the ASIC Corporations (Whistleblower Policies) Instrument 2019/1146 'eligible public company' is defined as a public company which is:
- limited by guarantee;
- operated on a not-for-profit basis; and
- not a trustee of a registrable superannuation entity.
A company which fits the above criteria will not be required to have a compliant whistleblower policy for each financial year that its annual consolidated revenue is less than $1 million.
Ensure your organisation is compliant
It is important that public and large proprietary companies which are required to have a whistleblower policy in place by 1 January 2020 ensure that their policy is compliant ahead of this deadline.
Failure to have a compliant whistleblower policy in place is an offence of strict liability under the Corporations Act and could attract civil penalties.
Organisations which have already implemented or updated their whistleblower policy should review their policy against ASIC's Regulatory Guide.
Ashurst can provide specialised advice on the application of the whistleblower regime to your company and ensuring your whistleblower policy is compliant before 1 January 2020.
Authors: Vince Rogers, Partner and Rebecca Scott, Lawyer.
