Blowing the whistle: is your business at risk of being dobbed in?

When an alarmed employee blows the whistle to publicly reveal wrongdoing at a company, it’s not something that a powerful business can quash by lawyering-up.
Blowing the whistle: is your business at risk of being dobbed in?

In the 2021–22 financial year, 43,000 tip-offs were received over alleged wrongdoing such as demanding cash from customers, paying workers cash in hand, or not declaring all sales – and those were just tip-offs received by the Australian Taxation Office (ATO) – one of many government departments open to whistleblowers.

The ATO said recently that of the 43,000 tip-offs received, the proportion found suitable for further investigation or retained for intelligence purposes was ninety per cent. Meanwhile, in a speech given in June 2022, Sandra Parker, the Fair Work Ombudsman (FWO), said the FWO is currently “investigating at least 50 large corporates which have self-reported non-compliance.”

When an alarmed employee blows the whistle to publicly reveal wrongdoing at a company, it’s not something that a powerful business can quash by lawyering-up.

Whistleblowers are an important mechanism to stamp out corrupt business practices, and in the words of the Australian Securities and Investments Commission, “whistleblowers play an important role in identifying and calling out misconduct and harm to consumers and the community.”

Businesses need to know that the Corporations Act 2001 gives whistleblowers certain legal rights and protections. This encourages them to come forward with their concerns.

Businesses should also note that from 1 July 2019, the protections in the Corporations Act have been expanded to provide even greater protections for whistleblowers. Public companies, large proprietary companies, and corporate trustees of APRA-regulated superannuation entities are required to have a whistleblower policy in place.

Failure to have a whistleblower policy implemented in your workplace is a breach of your company’s requirements under the Corporations Act which can result in significant penalties. Even if your business is not required to have a whistleblower policy in place, under the Corporations Act you are still obligated to manage whistleblowing per the requirements as set out under the Corporations Act and the best way to achieve this is to have a policy in place!

I haven’t had a whistle blown against my business yet. Do I need to do anything?

First of all, if you don’t have a whistleblower policy in place, get one sorted ASAP!

Secondly, if you are a company officer or senior manager of a business, you are defined as an ‘eligible recipient’ under the Corporations Act which means that whistleblowers can make disclosures to you and you have certain obligations to adhere to. You must be aware of these obligations which include:

  • not to disclose a whistleblower’s identity or information likely to lead to their identification, unless consent is given; and
  • engage in detriment to the whistleblower for making their disclosure.

There are strict and specific laws to punish anyone threatening to cause detriment to a whistleblower or those who breach a whistleblower’s confidentiality, including during an investigation into the whistleblower’s concerns.

The Corporations Act provides specific whistleblower provisions detailing how a company must respond to a whistleblower concern, including how to investigate the allegations and address or report on the misconduct.

For clients of Citation HR, we have saved you the trouble of trawling through the dense provisions contained within the Corporations Act and have summarised your obligations in our whistleblower policy inside our HR Software.

Whistleblowing is becoming more and more common with greater support out there to guide employees on how to make a whistleblower complaint. Specifically, the ATO and the FWO are both currently providing whistleblower services which allow individuals to anonymously report contraventions of taxation and workplace legislation straight to the authorities for investigation.

An example of a facility set up to support whistleblowers is the ATO’s taxation evasion tip-off form. This allows employees to report incidents of their employers paying them illegally through cash-in-hand payments, as well as failures to pay superannuation, providing incorrect payment summaries, and incorrectly classifying employees as independent contractors, all of which carry heavy penalties if substantiated.

The ATO’s ‘dob-in’ system is a busy service:

  • In 2021-22 the ATO received 43,000 tip-offs.
  • 95 per cent of the tip-offs were deemed as being suitable for further investigation.
  • 26 per cent of tip-offs were sales not being reported.

The top five industries reported so far for the 2021–22 financial year are:

  • Building and construction;
  • Hairdressing and beauty services;
  • Cafés and restaurants;
  • Road freight transport; and
  • Management advice and related consulting services.

The FWO also offers its own anonymous tip-off service for whistleblowers, allowing employees, consumers, concerned citizens, and even competitors to dob in businesses that deliberately break the law.

Can whistle-blowing be used unfairly against my business? What can I do?

An employer cannot engage in adverse action against a whistleblower, and you can’t stop people with concerns from blowing the whistle. The best remedy is to operate with high standards so that your workplace passes any inspection or scrutiny.

  • Compliance begins by setting up an HR platform with rigorous routines and workflows so that compliance becomes ingrained.
  • An employer should also make the most of a telephone advisory service like that offered by Citation HR, to help the business err on the side of caution.
  • Citation HR and sister company Citation Legal can assist with writing a workplace whistleblower policy or check that your existing policy is compliant with whistleblower protection laws.
  • Employers need to know that underpayment is a particular focus of whistleblower investigations and large companies have a large risk profile.

Let’s get your house in order and keep it in order with continuous improvement before you are the subject of a review from one of the many branches of government that might respond to a whistleblower’s concerns.

Citation HR can offer you

An HR compliance audit gets you on the right side of any potential whistleblowing problems:

  • The audit report identifies your risks.
  • Helps you adopt best-practice processes
  • Ranks your HR issues by severity thanks to a compliance report.

Book an HR Compliance audit today and talk to our legally trained team about how to write a Whistleblower Policy and potentially set up a whistleblower hotline at your workplace.

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For more information on the whistleblower services and how this could impact your business or the Citation HR compliance audit, please contact our friendly team.

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