Whistleblowing laws – pay attention or risk paying a $10.5M to $525M price!

The whistleblowing provisions under Part 9.4AAA of the Corporations Act 2001 (Cth) apply to companies, trading or financial incorporated associations, ADIs, super funds and insurers.¹

The civil penalties for breaching certain obligations under the whistleblowing regime have been strengthened by the Treasury Laws Amendment (Strengthening Corporate and Financial Sector Penalties) Act 2019 (Cth).  The maximum civil penalties have increased for:

breaching a whistleblower’s confidentiality; and

causing or threatening to cause detriment to a whistleblower. 

The maximum civil penalties for these contraventions have increased:

for an individual, to up to the greater of:

• $1.05 million;² and
• if the benefit derived and detriment avoided can be determined in respect of the contravention, three times that amount being, $3.15 million;³ and

for a body corporate, to up to the greater of

• $10.5 million;⁴ and
• if the benefit derived and detriment avoided can be determined in respect of the contravention, three times that amount, being $31.5 million;⁵ and
• 10% of the company’s annual turnover (up to an amount of $525 million).⁶ 

To avoid a contravention and exposure to these very significant penalties, Lavan recommends all companies (and other entities to which the whistleblowing regime applies), take the following actions:

• update, or otherwise confirm your whistleblower information is securely stored in accordance with privacy laws and the company’s (or entity’s) privacy policy; and 
• ensure all board members, employees and contractors are aware of the protections provided to whistleblowers and the consequences of causing detriment to, or breaching the privacy of, a whistleblower.

For more information on the obligations imposed under the whistleblowing regime, please see our previous articles released on 10 July 2019 (click here to read) and 19 February 2019 (click here to read).