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Whistleblower focus for business

Whistleblower focus for business

Protecting an anonymous whistleblower’s identity will be the key priority for business should new legislation be passed, according to KPMG Law.

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Silhouette of an anonymous employee

Protecting an anonymous whistleblower’s identity will be the key priority for business should new legislation be passed, according to KPMG Law.

But as stringent as the new rules may be if they are passed, there remain questions as to how workplaces would implement them in practice.

At the moment it’s unclear whether the Treasury Laws Amendment (Enhancing Whistleblower Protections) Bill 2017 (“Bill”), will progress in the current Parliament. Introduced to the Senate in December 2017, the proposed legislation has not yet been debated.

Under the proposed legislation, particular emphasis is placed on the protection of anonymous whistleblowers, and those who receive the information, to ensure that the discloser’s identity is kept confidential in the process.Penalties for disclosing a whistleblower’s identity without consent would fall on both the individual discloser (up to $200,000) and on the employing entity (up to $1 million for a corporation), with no exceptions for inadvertent or accidental disclosures.

KPMG Law partner James Simpson says although the legislation change would represent an important opportunity to strengthen workplace culture, it could also present a number of challenges.

Employee identity must remain anonymous

He states that “a supervisor or manager would be an ‘eligible recipient’, which means if they receive a disclosure from an employee who wishes to remain anonymous, they must keep that employee’s identity confidential – even during an investigation – or they could face significant penalties. This places supervisors and managers in a real double bind. In some instances they may decide that in escalating or investigating the issue they may inadvertently reveal the discloser’s identity, and may decide not to take action – so how companies manage that will be very important. A preferable option may have been to allow managers and supervisors to pass on information to authorised staff who have had appropriate training.”

With amendments proposed for both the Corporations Act and the Taxation Administration Act, those eligible recipients include auditors and tax agents.

Cost of compliance

Another hurdle for business, which was raised by KPMG in the submission process and summarised in the Senate Committee’s report, is the cost of compliance to regulated entities and taxpayers.

The Budget impact has been estimated at $25.4 million per year over ten years, but it’s believed that the cost to companies could be far greater.

“There would be a significant financial commitment required by firms in training staff,” says Simpson, “particularly given the large cross-section of staff who could be eligible disclosure recipients under the Bill.”

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