Following our most recent post on this topic, the Victorian Government has now passed regulations to provide more clarity on the operation of the proposed COVID-19 rent relief provisions for commercial tenants (Regulations).[1]
The Regulations are the most detailed among those passed to date by States and Territories in response to the National Cabinet Mandatory Code of Conduct (Code).
Further to our most recent update, the Victorian State Parliament passed legislation yesterday in relation to COVID-19 rent relief measures (the Rent Relief Act).
Unfortunately, much of the detail regarding the operation and implementation of the Rent Relief Act will be included in Regulations which have not yet been made (but they are expected any day).
There are continuing developments regarding the availability of rent relief packages for tenants affected by the COVID-19 pandemic (COVID-19).
Like most of the measures introduced recently by States and Territories, things are moving fast and it can be confusing to understand the detail and application of the mandatory code of conduct (Code) as it relates to small and medium businesses (i.e. with turnovers less than $50M) (SMEs).
As you are aware, the outbreak of COVID-19 is placing significant pressure on the global economy. As a consequence, company directors have a responsibility to make difficult and urgent decisions about the future of their businesses. These decisions will need to be made against the backdrop of their fiduciary and other duties under the Corporations Act and the general law.
The long anticipated reforms to the Australian whistleblower regime were passed by Parliament on 19 February 2019 with a view of introducing a single, strengthened whistleblower protection regime that covers the corporate, financial and credit sectors.[1]
As foreshadowed in our previous blog post, the Treasury Laws Amendment (Enhancing Whistleblower Protections) Bill 2018 (Cth) (Whistleblower Bill) introduces a number of amendments to the Corporations Act 2001 (Cth) (Corporations Act) and other legislation, including the Tax Administration Act 1953 (Cth) (Tax Administration Act) and the Banking Act 1959 (Cth). It is likely that these changes will come into effect on 1 July 2019 (Commencement Date).
What are the changes?
The Whistleblower Bill introduces a number of amendments to the whistleblower regime, including:
extending the group of persons who qualify as a Discloser to include (among others) associates of the company, former employees, officers and contractors, and their relatives or dependents;
removing the requirement for whistleblowers to act in ‘good faith’ in making a disclosure. The whistleblower now only has to have objectively reasonable grounds to suspect that the wrongdoing occurred;
allowing anonymous disclosures. This is a major change which we expect may be administratively difficult for companies to adequately facilitate anonymous reporting without investing in specialist resources;
broadening the types of corporate misconduct that Disclosers can make protected disclosures about, including corporate corruption, bribery, fraud, money laundering and terrorist financing;
requiring public and large proprietary companies to adopt a whistleblower policy which complies with the statutory requirements, with penalties applying for non-compliance;
providing procedures for public interest and ‘emergency’ disclosures to journalists and parliament in cases of extreme emergency;
excluding most disclosures of personal work-relate grievances from protection;
introducing a reverse onus of proof when a person seeks a court order for compensation once it has been established that they suffered detriment;
expanding the categories of recipients to whom protected disclosures may be made to include senior managers and lawyers (in certain circumstances); and
introducing a broader range of immunities, protections and compensation available to a Discloser.
Notably, the amendments introduced by the Whistleblower Bill to the Tax Administration Act will apply to disclosures made at or after the Commencement Date to matters that occur, or occurred, before, at or after the Commencement Date. Further, some parts of the Whistleblower Bill (including in respect of compensation and remedies) will apply retrospectively to disclosures that were made prior to the Commencement Date provided that the disclosures would have been protected had the Whistleblower Bill been in force at the time.
What you need to do now
The passing of the Whistleblower Bill now requires companies to review and assess their current practices and policies to ensure compliance with the new whistleblower regime. The key areas which should be reviewed and assessed for compliance as a matter of priority include:
adopting a compliant whistleblower policy prior to the Commencement Date: In the case of ASX-listed and unlisted, and large proprietary, companies, the adoption of a compliant whistleblower policy prior to the Commencement Date is critical. In light of the severe financial penalties which a company may face for a failure to adopt a compliant whistleblower policy, companies must closely consider the required content of and the process associated with the whistleblower policy that the Whistleblower Bill sets out[2]; and
implement an anonymous reporting process: Companies need to consider and implement appropriate reporting channels for disclosures to be made anonymously. Given the likelihood that anonymous disclosures may not provide sufficient detail to enable an efficient and relevant investigation, companies need to consider how they can facilitate two-way communications with an anonymous whistleblower which preserves anonymity; and
design and introduce appropriate claims handling processes: Companies need to design and implement relevant processes to ensure the whistleblower claims are dealt with appropriately and in compliance with the limited grounds for disclosure. This will include training for prospective ‘eligible recipients’ of whistleblower claims within the company to ensure they are trained to identify and appropriately deal with any whistleblower claims.
If you are unsure of your obligations or would like further information on how to best approach the reforms to the whistleblower regime, including the adoption of a compliant whistleblower policy or establishment of an anonymous reporting facility, please drop us a line at hello@cdandco.com.au or call 03 9614 2444.
The content of this article is intended to provide general guidance on the reform of the whistleblower regime and the amendments to the Corporations Act.
Insight by Carolin Darmanin
[1] See Revised Explanatory Memorandum to the Whistleblower Bill, p.3.
[2] See section 1317AI of the Corporations Act, as introduced by section 2 of the Whistleblower Bill.
Are you ready for the new whistleblowing regime?
Proposed amendments to Australia’s current whistleblower regime, as contained in the Treasury Laws Amendment (Enhancing Whistleblower Protections) Bill 2017 (Whistleblower Amendments), have recently passed through the Senate and will go to the House of Representatives in February 2019. If passed as they are expected to, the Corporations Act 2001 (Cth) (Corporations Act) and the Taxation Administration Act 1953 (Cth) will be amended to consolidate and enhance existing whistleblower protections for the corporate and financial sector. At this stage, it’s expected that these changes will take effect from 1 July 2019.
What is the existing whistleblower regime?
Generally speaking, a whistleblower is an insider within a company, who reports misconduct, or illegal or dishonest activity that has occurred within that company.
Under the current whistleblower regime set out in the Corporations Act, for a person (the Discloser) to be protected as a whistleblower:
that person must be a current officer, employee or contractor of the company and they must disclose their name;
the disclosure must made to an officer or senior manager of the Company, ASIC or the company’s auditor;
the Discloser must have reasonable grounds to suspect that the information they are disclosing indicates that the company, or an officer or employee of the company, may have breached the Corporations Act or the ASIC Act; and
the disclosure must be made in good faith.
Where these conditions are met, the Discloser is granted certain protections, including statutory immunity from civil or criminal liability for making the disclosure, unenforceability of contractual rights against the Discloser for making the disclosure, protection from victimization (including compensation for damage or loss) and non-disclosure of the Discloser’s identity or their information (subject to very limited exceptions).
What are the changes?
If the Whistleblower Amendments are passed, the existing whistleblower regime will be amended to include the following changes:
extending the group of persons who qualify as a Discloser to include (among others) former employees, officers and contractors, and their relatives or dependents;
broadening the types of corporate misconduct that Disclosers can make protected disclosures about, including corporate corruption, bribery, fraud, money laundering and terrorist financing;
public and large proprietary companies will be required to adopt an internal whistleblower policy, with penalties applying for non-compliance;
allowing anonymous disclosures and providing procedures for ‘emergency’ disclosure to journalists and parliament;
replacing the existing ‘good faith’ test with a requirement that the Discloser has objectively reasonable grounds to believe that the wrongdoing occurred;
expanding the categories of recipients to whom protected disclosures may be made to include internal managers and lawyers (if disclosed for the purposes of obtaining legal advice about the whistleblower regime); and
introducing a broader range of immunities, protections and compensation available to a Discloser.
The Existing Whistleblower Regime and the Whistleblower Amendments do not require a company to act on, investigate or respond to a whistleblowing claim. However, as the Whistleblower Amendments require certain companies to adopt a whistleblower policy which addresses how protected disclosures will be handled and investigated, it will be important for those companies to consider and implement compliant whistleblower procedures which are appropriate for its business.
What next?
If you work with a public or large proprietary company, the company will be required to comply with the Whistleblower Amendments if they are passed. Assuming that the Whistleblower Amendments are passed when the House of Representatives resumes in February 2019, the company should prioritise addressing the following key matters for compliance with the Whistleblower Amendments:
1. the company must ensure that it has adopted a whistleblower policy that is compliant with the Whistleblower Amendments and ensure that it is accessible to all employees within 6 months of the effective date of the Whistleblower Amendments. The whistleblower policy must address:
a. the protections and support available to Disclosers;
b. to whom, and how, protected disclosures may be made;
c. how anonymous disclosures may be made;
d. how protected disclosures will be investigated;
e. how the company will ensure fair treatment of employees who are mentioned in protected disclosures or to whom the protected disclosures relate; and
f. how the policy is made available to officers and employees.
If a compliant whistleblower policy is not adopted by this date, the company may be fined $12,600; and
2. the company must establish a procedure which enables anonymous disclosures to be made. Whilst the format for anonymous reporting is not mandated, the company should consider the logistical issues associated with anonymous reporting, including anonymized reporting methods, administrative handling and the facilitation of two-way anonymized communication channels.
Please contact us if you would like assistance with the adoption of a compliant whistleblower policy or establishment of an anonymous reporting facility.
Insight by Carlie Hodges and Fiona Rose
If you’d like help with the adoption of a compliant whistleblower policy or establishment of an anonymous reporting facility, please drop us a line at hello@cdandco.com.au or call 03 9614 2444
The increasing popularity of initial coin offerings (ICOs) combined with the predominantly hands-off approach taken by global regulators to date, has contributed to unease among commentators about the level of protection currently afforded to ICO investors. In an effort to clarify the regulatory landscape applying to ICOs, the Australian Securities and Investments Commission (ASIC) recently published a guidance statement (ASIC Guidance)[1] about when ICOs may be subject to current Australian securities laws.
Direct voting is a form of voting that allows shareholders to cast their vote, either online or by completing a voting form, on resolutions of a general meeting without having to attend the meeting in person or appoint a proxy or corporate representative to vote on their behalf. By enabling direct voting at your company’s general meetings, shareholders are able to have full control over their votes and can promptly and securely vote without the need to physically attend. The convenience of direct voting may also encourage greater shareholder engagement and participation.
