From 1 January 2020 charities and not-for-profits structured as public companies (including companies limited by guarantee) and large proprietary companies must have a whistleblower policy unless they have an annual consolidated revenue of less than $1 million.
There is an obligation to make the policy available to all employees and office holders of the company. Failure to do so is an offence pursuant to Section 1317AI of the Corporations Act 2001 and penalties will be enforced by the Australian Securities and Investments Commission (ASIC).
All corporations will need to comply with the new whistleblower regime and develop procedures to educate their employees and office holders regarding their rights and obligations in the context of whistleblower protected disclosures.
What must the whistleblower policy include?
The policy must include information about:
- the disclosures that qualify for protection;
- the protections available to whistleblowers;
- how and to whom a disclosure may be made;
- how the company will support whistleblowers, protect them from victimisation and ensure fair treatment of employees who are mentioned in disclosures;
- how the policy is to be made available to the company’s employees and officers; and
- how the company will investigate disclosures.
The identity of the person making the protected disclosure must be kept confidential, and the person will have certain protections from prosecution or victimisation arising from the disclosure.
We strongly recommend that all charities and not-for-profits which are companies should either review their current policies or ensure that the new policy is in place well before 1 January 2020.
The penalties for companies are the higher of 50,000 penalty units (approximately $10.5 million), three times the benefit derived, or detriment avoided, or 10% of the company’s annual turnover (capped at $525 million). For individuals it is 5,000 penalty units (approximately $1.05 million), or three times the benefit derived, or detriment avoided.
ASIC will be putting out whistleblower regulatory guidelines and further information can be found on their website here.
The Australian Charities and Not-for-profits Commission (ACNC) also has a range of information in relation to this topic.
What should you do now?
At FC Lawyers, we act for a range of charities and not-for-profits and our team can assist in advising and drafting the policies and explaining the implications to boards to ensure compliance.
Contact our team today to discuss your whistleblower policy, or if you have any other legal issues regarding charities or not-for-profit organisations.
The information provided in this article is for general information and educative purposes in summary form on legal topics which is current at the time it is published. The content does not constitute legal advice or recommendations and should not be relied upon as such. Whilst every care has been taken in the preparation of this article, FC Lawyers cannot accept responsibility for any errors, including those caused by negligence, in the material. We make no representations, statements or warranties about the accuracy or completeness of the information and you should not rely on it. You are advised to make your own independent inquiries regarding the accuracy of any information provided on this website. FC Lawyers does not guarantee, and accepts no legal responsibility whatsoever arising from or in connection to the accuracy, reliability, currency, correctness or completeness of any material contained in this article. Links to third party websites or articles does not constitute any endorsement or approval of those sites or the owners of those sites. Nothing in this article should be construed as granting any licence or right for you to use that content. You should consult the third party’s terms and conditions of use in relation to any third-party content. FC Lawyers disclaims all responsibility and all liability (including liability for negligence) for all expenses, losses, damages and costs you might incur as a result of the information being inaccurate or incomplete in any way. Appropriate legal advice should always be obtained in actual situations.
Prefer to get in touch?
With offices in Brisbane, Sunshine Coast, North Queensland and Sydney, our team is well equipped to provide both advice and support across a broad range of legal areas.
