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Terminating A Whistleblower – Ask A Specialist

Terminating A Whistleblower – Ask A Specialist (Last Updated On: June 4, 2018)

Question: Someone at my mate’s business has started asking questions about some of the shortcuts they take in the business. Can he be fired for whistleblowing?

Answer: An employee who raises concerns or questions about unethical or illegal conduct within the scope of their employment is known as a whistleblower. In most cases, an employee who brings attention to these sorts of issues don’t wish to continue employment and will often resign on their own volition. However, in some circumstances, the employee does not resign, which presents an interesting dilemma for employers who may still wish for that employee to no longer be part of the business. So, can you terminate an employee who is a whistleblower?

Where the whistleblower meets the criteria under the relevant legislation, the short answer to this question is no. However, it is necessary to consider the issue on a case-by-case basis, as employees may have rights under various laws.

Risks associated with terminating a whistleblower

  1. General Protections Claim

The Fair Work Act 2009 protects employees from being treated adversely (such as being terminated) for actions like exercising a statutory right to make a complaint or inquiry about their work conditions, environment or employer. Terminating an employee, in the first instance, for speaking out could be against the Fair Work Act and could result in the employee lodging a costly and drawn out claim against you and the business.

  1. Effects on workplace culture

Regardless of the approach taken, as an employer, you need to consider the most appropriate options before acting, this may include seeking legal advice or speaking with your Workplace Relations Specialist. Careful planning will help reduce any unwanted negative effects such as the impact on other staff and workplace culture. Employees who witness poor treatment of colleagues, may be less inclined to make reports of future poor behaviour or processes within the workplace.

  1. Other Obligations

Corporations (eg. Company, Trusts with Corporate Trustees) are covered by the Corporations Act 2001. Before responding to any instance of whistleblowing, you need to consider the implications and protections under the Corporations Act. The Act generally prevents employers from acting unfavourably towards any employee who discloses information of relating to certain types of illegal or unethical behaviour.

If you do terminate an employee in breach of these provisions, the Act allows them to request a court to reinstate them to their original position or a position of similar level and remuneration. Additionally, these employees are also protected from civil litigation brought against them by their employer for breach of contract. These points are worth considering before you terminate an employee for whistleblowing.

The Corporations Act also protects employees from employers who victimize them for disclosing sensitive information. The employee can seek damages (financial remedies) from employers for acts of victimisation in response to whistleblowing. In addition, if you do victimise an employee for whistleblowing, you could face criminal charges under the Act.

The provisions of the Corporations Act are also mirrored in various state laws, so these laws also need to be considered before acting.

What if none of these risks are present?

If the employee’s disclosure is not protected by the Fair Work Act or Corporations Act, you may be in a position to take disciplinary action against the employee or even terminate their employment. This will typically be permitted where the disclosure is in some way a breach of the employment contract or employee handbook – for example, if it involves disclosing confidential information in breach of the contract, or use of the IT systems in breach of the employee handbook.

Law to protect whistleblowers

The laws in this area may appear extensive. However, recent unethical and illegal workplace practices brought to attention by employees of both 7-Eleven and the Commonwealth Bank of Australia have prompted Parliament to consider formalising protections into legislation. If the proposed legislation is passed into law, it means businesses will need to implement their own policies and internal processes to deal with whistleblowers, or face significant penalties.

Reduce risk from the start

Prevention is always better than a solution. Fair, reasonable and safe practices and procedures within the workplace help to avoid these sorts of issues arising. Avoid whistleblowing from happening by remaining compliant from the start.  If you’re unsure of your compliance or policies and procedures regarding whistleblowers, speak with an Employsure Adviser today on 1300 651 415.

 

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