A major whistleblower law went into effect in Australia this week, offering important, enhanced whistleblower protections against job retaliation.
But the Australian law lacks a critical component of successful whistleblower programs: whistleblower rewards.
The Parliament of Australia passed The Treasury Laws Amendment (Enhancing Whistleblower Protections Bill) on Feb. 19 and went into effect July 1. Key provisions in the Australian whistleblower law include:
- Expanded protections for whistleblowers.
- Whistleblowers cannot be the target of civil, criminal or disciplinary actions for disclosing wrongdoing.
- The law promises stiffer consequences for employer retaliation against whistleblowers and for employers that reveal the identity of a whistleblower.
- Organizations that reveal a whistleblower’s identity or retaliate against whistleblowers could face fines up to $10.5 million, “three times the benefit derived, or detriment avoided” or 10% of a corporation’s annual turnover, capped at $525 million.
- Individuals who victimize whistleblowers also can be held liable and fined up to $1.05 million.
- Greater confidentiality for whistleblowers.
- Whistleblowers can now report misconduct anonymously.
- The confidentiality of whistleblowers’ identities is protected by stiff fines for breaches of confidentiality.
- Protections from job retaliation for former employees and their relatives who disclose information about wrongdoing.
- Under the previous whistleblower law in Australia, only employees and contractors were protected as whistleblowers.
- Protections from retaliation for whistleblowers who go to the media or members of the Parliament of Australia first in certain circumstances.
- “Public interest disclosures” are covered under the law if whistleblowers reasonably believe that their initial report will not be acted on. This type of disclosure becomes possible 90 days after a report is initially made to a regulated entity.
- “Emergency disclosures” to immediately report wrongdoing to the media or a member of Parliament also are covered under the law if there are “reasonable grounds to believe that the information concerns a substantial and imminent danger to the health or safety of one or more persons, or the natural environment.”
Australian companies are required to have whistleblower policies compliant with the new law implemented by Jan. 1, 2020 or face a $126,000 fine. To be compliant, Australian companies must develop internal whistleblower policies and make them available to employees.
The Australia whistleblower law is weaker in two ways than it could have been: (1) whistleblowers in most circumstances must report their concerns internally first to be covered by the law; and (2) there are no whistleblower rewards.
Parliament should have left it to whistleblowers to decide whether to report internally first or go directly to authorities as employees know the likely reaction of any complaints. All whistleblowers should be protected from retaliation.
The lack of whistleblower rewards will dissuade people from stepping forward with important information. Rewards incentivize whistleblowers to come forward, particularly at the top levels of a company, and help balance the career and personal risks that whistleblowers take by coming forward.
US whistleblower reward and protection programs like that of the Securities and Exchange Commission whistleblower program have proven immensely effective in encouraging whistleblowers – both in the US and in other countries – to come forward with information about wrongdoing that violate US laws, such as the US Foreign Corrupt Practices Act.
The SEC received 5,282 whistleblower submissions in fiscal year 2018. Of those, 651 were from international whistleblowers. About seven percent of those international tips came from Australia.
If you are aware of a company that is violating US securities or commodity laws and would like to discuss your possible case with experienced, international whistleblower lawyers, contact Phillips & Cohen for a free, confidential review of your matter.