Can You Terminate a Whistleblower?

Whistleblower is a term you’ve probably encountered in the news or the media. Edward Snowden or Julian Assange might come to mind when you think of a whistleblower.

While these examples may seem far off from your world, as an owner of a business, of any size, you should be aware of whistleblower protections and how they may affect your business.

In short, a whistleblower is someone who highlights unethical or illegal behaviours that occur at work, this could include but is not limited to; fraud or behaviour that places an individual’s safety at risk. This may be in relation to your business’ practices, or the conduct of an employee in your business.

This blog is intended to give you an initial idea of what a whistleblower is, the legal protections in place, and other things you may want to know about this topic. This is not a comprehensive review of the legislation and we recommend seeking professional guidance should you require further assistance.

What Is A Whistleblower?

In legislation, a whistleblower is someone within, or with a connection to, a company or organisation who raises concerns or questions about ‘misconduct’ or  ‘improper states of affair’ within that same organisation. Misconduct or improper states of affair will depend on the circumstances, however, can include behaviours such as theft, fraud or gross mismanagement.

This will also include information about the company or organisation, or an officer or an employee of the company or organisation, engaging in conduct that:

• breaches the Corporations Act 2001; or

• breaches other financial sector laws enforced such as the Australian Securities and Investments Commission (ASIC) – for more information please seek professional advice; or

• breaches against any other law of the Commonwealth that is punishable by 12 or more months imprisonment; or

• represents a danger to the public or financial system.

Whistleblowers can include current or former employees, officers, contractors and superannuation trustees. Spouses and relatives of these individuals are also covered under the whistleblower ‘protection regime’.

Why Are Whistleblowers Important?

Whistleblowers play an important role in identifying and calling out potential harm to consumers and the community. Under whistleblower protection legislation, a whistleblower must have ‘reasonable grounds’ to suspect that the information they are disclosing about the company or organisation concerns:

• misconduct; or

• an improper state of affairs or circumstances.

Note: Misconduct will not be limited to misconduct as defined by your own policies and should be considered more generally.   

Which Laws Protect Whistleblowers?

The Corporations Act 2001 grants certain individuals legal rights and protections as whistleblowers.

These protections include:

• Whistleblower’s identity must not be disclosed under any circumstances without their consent or authorisation. In certain circumstances, however, information can be distributed to ASIC, Australian Prudential Regulation Authority (APRA) or a lawyer.

• Whistleblowers are protected from being summoned to court for making the disclosure including if that disclosure is in breach of their contract of employment.

• It is a criminal offence to victimise or cause detriment to a whistleblower because of their disclosure and civil penalties may apply. Individuals can seek compensation through a court if they suffer loss, damage or injury for making their disclosure.

What Are The Risks Associated With Terminating A Whistleblower?

Possible risks associated with termination of a whistleblower could include, but are not limited to:

• General protections claim: The Fair Work Act 2009, protects individuals from adverse treatment for actions like exercising a statutory right to make a complaint or inquiry about their work conditions, environment or employer. Therefore, terminating an employee, for speaking out could be against the Fair Work Act 2009 and could result in the employee lodging a costly and drawn out claim against you and the business.

• Negative effect on workplace culture and employee morale: Employees who witness poor treatment of colleagues, may be less inclined to make reports of future poor behaviour or processes within a workplace. It is recommended that you seek professional advice, and plan carefully to help mitigate unwanted negative effects on other staff, organizational culture, and consider unwarranted publicity or reputational damage.

• Possible reinstatement: In certain circumstances, an employer may be ordered to reinstate an ex-employee into their original position or a comparable position within the organisation.

• Apology to whistleblower: In certain situations, the person, company or organisation that caused detriment or made a threat may be ordered to apologise formally.

Whistleblower Policy in Your Workplace

1. Implementing a Policy

Only certain companies are required to have a whistleblower policy by legislation. However, business owners should still ensure whether their business fits these requirements.

If you are required to have a policy in place, it must contain information about:

• the protections available to whistleblowers;

• how and to whom an individual can make a disclosure;

• how the company will support and protect whistleblowers;

• how investigations into a disclosure will proceed;

• how the company will ensure fair treatment of employees who are mentioned in whistleblower disclosures; and

• how the policy will be made available.

1. Give Staff Training

Although not a requirement, businesses which are required to have and identify how they will communicate a whistle blower policy, should consider training their staff in the policy.

Best practice training will include education for senior managers, offices and others authorised by the company to receive disclosures from whistleblowers (e.g. Compliance officers), and how their roles may specifically intersect with legislation.

It will also include training all staff on the whistle blower policy. This program should go cover the basic of the legislation, as well as how your whistleblower policy operates within your business.

Ensure that you comply with requirements to maintain the confidentiality of the whistleblower during the process.