Consequences of contravention

There will be significant penalties for corporations (and individuals) rising from contraventions of the legislation. These are set out in the table below:

Contravention

Penalty

Civil Penalty provisions (Corporations Act)

Breach of confidentiality of identity of whistleblower
or
Victimisation or threatened victimisation of whistleblower

  • For an individual, 5,000 penalty units [$1.050M] or three times the benefit derived or detriment avoided; and
  • For a body corporate, 50,000 penalty units [$10.5M], three times the benefit derived or detriment avoided, or 10% of the body corporate’s annual turnover (up to 2.5 million penalty units [$525M]).

Criminal offences (generally Corporations Act and Taxation Administration Act)

Breach of confidentiality of identity of whistleblower

For an individual…

  • Under the Corporations Act: 6 months imprisonment or 30 penalty units [$6,300] or both
  • Under the Taxation Administration Act: 6 months imprisonment or 60 penalty units [$12,600] or both

Victimisation or threatened victimisation of whistleblower

For an individual…

  • Under the Corporations Act: 2 years imprisonment or 120 [$25,200] penalty units or both
  • Under the Taxation Administration Act: 2 years imprisonment or 240 penalty units [$50,400] or both

Failure to have whistleblower policy (Corporations Act only)

60 penalty units [$12,600]

[1] Corporations Act 2001 (Cth) s 1644(1), introduced by the Whistleblower Bill s 12.

[2] Corporations Act 2001 (Cth) s 1644(2), introduced by the Whistleblower Bill s 12.

[3] Corporations Act 2001 (Cth) s 1317AI(1), introduced by the Whistleblower Bill s 9.

[4] Corporations Act 2001 (Cth) s 1317AI(2), introduced by the Whistleblower Bill s 9.

A large proprietary company is currently defined in the Corporations Act 2001 (Cth) s 45A(3) as a proprietary company that satisfies at least two of the following in the financial year: (a) consolidated revenue $25 million or more; (b) gross assets of $12.5 million or more; (c) the company and any entities it controls have 50 or more employees. However, draft regulations were introduced for consideration in 2018 (Corporations Amendment (Proprietary Company Thresholds) Regulations 2018), which would double those thresholds, meaning that fewer proprietary companies would be subject to these obligations.

[5] The content as set out in Corporations Act 2001 (Cth) s 1317AI(5), introduced by the Whistleblower Bill s 9.

[6] Corporations Act 2001 (Cth) ss 1317AA and Taxation Administration Act 1953 (Cth) s 14ZZT, introduced by the Whistleblower Bill ss 2, 15.

[7] Eligible whistleblower is defined at Corporations Act 2001 (Cth) s 1317AAA and, at a high level, includes an entity’s officers, employees, contractors, associates and superannuation trustees. Also see Taxation Administration Act 1953 (Cth) s 14ZZU, introduced by the Whistleblower Bill s 15.

[8] Eligible recipient is defined at Corporations Act 2001 (Cth) s 1317AAC. Importantly, a ‘senior manager’ or ‘officer’ of a company – both concepts under the Corporations Act (section 9) – are a narrower class as compared with all employees, managers or supervisors of eligible whistleblowers. See also Taxation Administration Act 1953 (Cth) s 14ZZV, as introduced by the Whistleblower Bill s 15. This is a significant change from earlier drafts of the legislation, and should ensure that adequately responsible people have this responsibility, rather than it sitting with more junior employees.

[9] Corporations Act 2001 (Cth) ss 1317AADA, introduced by the Whistleblower Bill s 2.

[10] Corporations Act 2001 (Cth) ss 1317AAD, introduced by the Whistleblower Bill s 2.

[11] Corporations Act 2001 (Cth) ss 1317AA and Taxation Administration Act 1953 (Cth) s 14ZZT, introduced by the Whistleblower Bill ss 2, 15.

[12] Corporations Act 2001 (Cth) ss 1317AD, 1317AE and Taxation Administration Act 1953 (Cth) ss 14ZZZ, 14ZZZA, introduced by the Whistleblower Bill ss 9, 15.

[13] Ibid.
[14] Whistleblower Bill s12

[15] Corporations Act 2001 (Cth) s 1317AI, as introduced by the Whistleblower Bill ss 9, 15.

3 + 11 =