Protections, remedies and sanctions for reprisals
This chapter summarises the committee's consideration of the best
practice criteria on protections, remedies and sanctions for reprisals.
The committee has deliberately separated its consideration of remedies
from reward and bounty systems which are considered in the next chapter. Reward
and bounty systems are not part of the best practice criteria. In addition, the
committee considers that remedies, including compensation, should be determined
by the level of detriment suffered by the whistleblower and that a whistleblower
should be able to be fully remediated for simply doing the right thing, without
needing to have a financial motive.
Table 10.1 below sets out the best practice criteria for protections,
remedies and sanctions for reprisals.
Table 10.1: Best practice criteria for protections, remedies
and sanctions for reprisals
||Broad protections against retaliation
||Protections apply to a
wide range of retaliatory actions and detrimental outcomes (e.g. relief from
legal liability, protection from prosecution, direct reprisals, adverse employment
action and harassment).
||Comprehensive remedies for retaliation
||Comprehensive and accessible civil
and/or employment remedies for
whistleblowers who suffer detrimental action (e.g. compensation rights,
injunctive relief; with realistic burden on employers or other reprisors to
demonstrate detrimental action was not related to disclosure).
||Sanctions for retaliators
||Reasonable criminal and/or
disciplinary sanctions against those responsible for retaliation.
Source: Simon Wolfe, Mark Worth, Sulette Dreyfus, A J Brown, Breaking
the Silence: Strengths and Weaknesses in G20 Whistleblower Protection Laws,
October 2015, p. 6.
The Breaking the Silence report found both public and private
sector remedies were deficient. In particular, the remedies in the Corporations
Act were singled out as being 'ill-defined' when compared to the best practice
The protections, remedies, and sanctions for reprisals in current whistleblower
protection legislation are summarised in Table 10.2 below.
Table 10.2: Protections, remedies, and sanctions for
|Best Practice Criteria for
Interest Disclosure Act 2013
Work (Registered Organisations) Act 2009
|Broad protections against retaliation
||Sections 9–12 – Protection from legal
liability, contractual remedies, and privilege from defamation.
337B – Protection from legal liability, contractual remedies, and privilege
337BA –protection from reprisals, including dismissal, injury, alteration of
position, discrimination, harassment, harm including psychological harm and
damage to property or reputation.
– Protection from legal liability, contract termination.
|Section 13 – Protection
from reprisals including dismissal, injury, alteration of position and discrimination.
|Comprehensive remedies for retaliation
14 – Compensation
15 – Injunctions and apologies
16 – Reinstatement
18 – Costs only if vexatious
337 BB –
337BC – Costs only if vexatious
1317AD – Compensation only
Act does not appear to provide for:
only if vexatious
civil remedies are ONLY available if a criminal offence of reprisal is shown
to have been taken.
|Section 14 allows for a court to require both an individual
reprisor and the organisation to pay compensation.
|Sanctions for retaliators
19 – Offences
No Civil penalties, but sections 14, 15 and 16 provide
that a person may still be held liable for taking reprisal action.
337BD – Civil penalties
337BE Criminal offences
1317AC prohibits victimisation including detriment and threats.
Key: White = strongest
protections; Mid grey = weaker protections; Dark grey = weakest protections.
Source: Table 10.2 represents
the committee's analysis of Acts and relevant sections as listed in the table
and Simon Wolfe, Mark Worth, Sulette Dreyfus, A J Brown, Breaking the
Silence: Strengths and Weaknesses in G20 Whistleblower Protection Laws, October
2015, p. 6.
Of the three Acts considered in Table 10.2, the Corporations Act has the
weakest protections. While the public sector protections in the PID Act are
stronger, some deficiencies remain, including the definition of reprisals, the
absence of provisions for exemplary damages, and a lack of civil penalties.
The FWRO Act whistleblower protections are the strongest and as amended
in December 2016 provide enhanced remedies through:
- a broader definition of reprisals which add: harassment or
intimidation, physical or psychological harm or injury, and damage to a
person's property or reputation;
- the potential for a court to make orders relating to:
compensation, injunctions, apologies, reinstatement, and exemplary damages;
- different arrangements for remedies, including the potential for
other parties to make applications on behalf of the whistleblower; and
- civil penalties that are decoupled from criminal offences.
Evidence received during the inquiry
This section summarises views put to the committee by witnesses and
submitters on the definitions of, and remedies and sanctions for, reprisals.
Definition of reprisals
Noting the FWRO Act enables a whistleblower who has made a protected
disclosure to seek a remedy if they have suffered from a reprisal action,
Associate Professor Kath Hall supported the broader definition of reprisals contained
in the FWRO Act:
'Reprisal' is very broadly defined...as a series of behaviours
but that can be connected to either a protected disclosure or even the
suspicion that a protected disclosure may be made.
Likewise, Mr Denis Gentilin supported the broad reprisal and whistleblower
compensation arrangements in the FWRO Act:
Having reviewed the amendments, my layperson view is that
they unquestionably provide recourse for whistleblowers who experience inferior
outcomes. Not only do they give the courts the ability to award compensation,
but the definition of what constitutes reprisal is broad.
...it is also possible that the amendments as currently drafted
will have the desired effect and motivate managers to invest in programs and
processes that both encourage speaking up within their organisations and
promote positive outcomes for whistleblowers. As executives and directors learn
that their organisations could be liable if they fail to appropriately look
after those who raise concerns, there is every likelihood this will drive increased
Ms Serene Lillywhite, Chief Executive Officer, Transparency
International, supported the broader definition of reprisals and argued that
deliberate reprisals against public interest whistleblowers should be criminal.
However, she was also of the view that civil remedies should be made available
that are accessible, equitable, predictable, and low-cost whenever a
whistleblower suffers personally including in their employment.
ASIC recommended overhauling the compensation arrangements for reprisals
so whistleblowers are confident they will not be disadvantaged as a result of
disclosing corporate wrongdoing. ASIC suggested it is vital to:
- clearly define 'reprisal'
and 'detriment' and the
nature of the damages for which a whistleblower may make a compensation claim
(which should not be capped); and to
- ensure cost protection for whistleblowers (unless a claim has
been made vexatiously).
ASIC also suggested considering the following options for securing
compensation for a whistleblower if the corporation involved became insolvent.
Consistent with current practice, the whistleblower would become an unsecured
creditor. Alternatively, the Commonwealth could make the compensation payment
to the claimant in the first instance. The payment could then be offset from
penalties obtained as a result of actions by the regulator generally. The
compensation payment would become a debt to the Commonwealth, standing in the
shoes of the claimant as an unsecured creditor.
Mr Warren Day, Senior Executive Leader, ASIC suggested there could be initial
funding from government to set that fund up until it could be funded through
Professor A J Brown also noted that it could be advantageous to
establish a way to fund compensation in a situation where the company
responsible for reprisals is bankrupt.
Mr Matthew Chesher, Director Legal and Policy, MEAA informed the
committee that it supports the creation of a protected fund, where a proportion
of funds from successful prosecutions and settlements are preserved to support
whistleblowers whose future employment is unviable due to their disclosing
Mr Chesher also suggested that the objective of compensation should be
support for actual loss. He supported a methodology to ensure that people do
not suffer financial detriment,
and suggested the following approach:
I believe that it would need to be a statutory office holder
making that kind of determination. There would need to be some evidence of loss
or prejudice. You would imagine that a whistleblower who is subject to
discrimination could bring it to a regulator's attention in order to seek their
Mr Gentilin argued that legislative change was necessary to improve the financial
compensation arrangements for whistleblowers:
In the worst-case scenarios, the costs associated with
whistleblowing, both financial and emotional, are enormous. At a minimum, the
legislation should provide coverage for the financial costs, and, what is more,
when an organisation has failed to create an environment that is supportive of
positive whistleblowing outcomes, it should be made liable for these costs. The
compensation should be generous and not be associated with any caveats that
potentially make it refundable.
Ms Julia Angrisano, national secretary of the FSU, informed the
committee that compensation should be available to those who use whistleblower
protections to expose unethical behaviour or corporate misconduct. Where an
employee can demonstrate financial disadvantage, the compensation should
recompense them and the compensation should include loss of future earnings.
Ms Louise Petschler, General Manager, Advocacy, AICD advocated
increasing the amount of compensation and the ease with which whistleblowers
can access and apply for compensation if they have suffered some form of
financial loss because of disclosing the alleged misconduct.
Remedies under the FWRO Act
Mr Howard Whitton, director of the Ethicos Group, supported the
compensation arrangements set out in the FWRO whistleblower protections.
Transparency International welcomed the other whistleblower remedies set
out in the FWRO Act including exemplary damages and protecting whistleblowers
against respondents' costs.
Associate Professor Hall argued that the FWRO Act protections strike a
[T]he court is not required to make any of the orders if
there is the belief or suspicion that the disclosure by the whistleblower is
not any part of the reason for the reprisal. So the burden of proof for the
whistleblower and the obligations in terms of the organisation are, in my
opinion, much better balanced.
Professor Brown informed the committee that Section 337BB of the FWRO
Act creates an important new basis for more effective remedies by recognising
the need to address foreseeable dangers and providing that liability for compensation
will arise either:
- where a person by act
or omission causes detriment to a person, because they believe or suspect them
to be a whistleblower (a reprisal); or
- where detriment is caused to a
whistleblower by act or omission, as the result of a failure to fulfil a duty
to prevent or control that detriment – irrespective of whether any belief or
suspicion that they had made a disclosure was a direct reason for the damaging
acts or omissions themselves, or who was directly responsible for those acts.
This second step is akin to the recognition of organisations'
duties under workplace health and safety law, to prevent foreseeable dangers
from manifesting – rather than simply outlawing and penalising acts or omissions
that are deliberately or negligently dangerous, after they have occurred.
One of the issues that arose during the inquiry was the interaction
between civil remedies and the offence provisions relating to reprisal activity
and how they vary across the three Acts.
Under section 19A of the PID Act, a person can claim civil remedies in
relation to the taking of a reprisal (or the threat to take a reprisal) in
addition to, or separate from, a prosecution for a criminal offence. Similarly,
under section 337BF of the FWRO Act, a person may seek civil remedies even if a
prosecution for a criminal offence against section 337BE in relation to the
reprisal or threat has not been brought, or cannot be brought.
By contrast, Professor Brown identified serious shortcomings in the current
whistleblower protections under the Corporations Act because they require that
a criminal offence is shown to have occurred:
This is a uniquely Australian problem. No country in the
world has criminalised reprisals against whistleblowers the way that we have
since the 1990s, so no other country has created the problem for itself of then
trying to figure out how to provide civil compensation remedies for the same
reprisals if, in fact, they have already been identified as criminal.
In addition, Professor Brown explained that the FWRO Act whistleblower
protections have other significant advantages over current corporate
whistleblower protections because the FWRO provisions include liability for a
failure in the duty to support and protect a whistleblower:
...the thing that the Fair Work (Registered Organisations) Act
does, though, for the first time is actually to say that civil liability can be
attracted where there is a failure on the part of somebody to fulfil a duty to
either protect or support, or to control others who are likely to undertake a
reprisal, so it does shift the ground significantly in a positive direction.
That is an issue on which there has now been some positive movement, but the
ultimate solution on this is something that really needs to be worked through.
However, Professor Brown suggested that the way reprisals are defined in
the FWRO Act whistleblower protections could be further improved:
The Committee should recommend that the grounds for criminal
and civil liability be separated to make the gaining of civil remedies more
realistic, and remove the current dependency (whether explicit or implicit) on
the need for compensable acts or omissions to have been undertaken for the
reason that a person was believed or suspected to have made a disclosure.
Transparency International supported Professor Brown's suggestion for
untangling the civil and criminal aspects of reprisal and detriment:
...further legislative steps should be taken to separate the
criminal offence of reprisal from the breadth of circumstances that should give
rise to employment or civil remedies for detrimental outcomes. Employment and
civil remedies need to be available where anyone fails in their duty to support
and protect a whistleblower, or to prevent or restrain detrimental outcomes,
including detriment which may be unintended but could and should have been
foreseen. This is distinct from a 'reprisal', which carries implications of
intent or knowledge that an act or omission would result in detrimental
impacts, as direct punishment or retaliation for the disclosure.
Liability for paying compensation
There was some support for increasing the penalties on companies that
retaliate against whistleblowers in any way,
as well as arguments that a company that has potentially harassed or victimised
the whistleblower is the party that should pay when compensation is awarded.
With respect to the apportioning of liability for compensation payments
relating to reprisals in the Commonwealth public sector, section 14 of the PID
Act sets out the options for courts to require both individuals and
organisations to be liable for compensation. In other words, it appears that
section 14 of the PID Act allows a court to determine the relative attribution
of liability between the organisation and the individual or individuals that
took the reprisal action.
Professor Brown was of the view that an approach similar to section 14
in the PID Act could be usefully replicated in legislation for the private
If an approach similar to section 14 in the PID Act was replicated in
legislation for the private sector, it may address the 'agency problem'
identified by Mr Thomas (see chapter 2). To recap, the 'agency problem'
relates to a situation where an organisation implements best practice
procedures around whistleblowing, and yet one or more of its employees takes
reprisal action against a whistleblower, primarily because the goals and
incentives (and disincentives) faced by the organisation and its employees may not
As shown in Table 10.2, evidence to the inquiry drew attention to
significant inconsistencies in the current whistleblower protections across the
PID Act, FWRO Act, and Corporations Act with respect to the protections,
remedies and sanctions available under the respective pieces of legislation.
The committee notes that the protections, remedies and sanctions in the
FWRO Act were some of the most significant reforms made to the FWRO Act in
December 2016 (see 10.6). The committee further notes that there was broad
support for the reforms that have been made to the FWRO Act.
By contrast, witnesses drew attention to the paucity of protections and
remedies under the Corporations Act as well as the shortcomings in the legislation
that make it extremely difficult to prove that a reprisal has occurred. The
committee also notes there was strong support for improving the compensation
The committee considers that the evidence to the inquiry makes a strong case
for extending the reforms in the FWRO Act to both the public sector and the
rest of the private sector. The committee considers that this would be a
sensible approach that would align legislation with best practice and have the
further advantage of harmonising the provisions for protections, remedies and
sanctions across the public and private sectors.
The committee also considers that the separation of the grounds for criminal
and civil liability is an important reform that would draw a distinction
between the criminal offence of reprisal and the wide range of circumstances
that would give rise to employment or civil remedies for detrimental outcomes.
This would make it easier for a whistleblower (or whistleblowers) to gain civil
remedies, and would remove the current dependency (whether explicit or
implicit) on the need for compensable acts or omissions to have been undertaken
for the reason that a person was believed or suspected to have made a
The committee recommends that the Fair Work (Registered Organisations)
Act 2009 be amended to separate the grounds for civil and criminal
The committee recommends that a Whistleblowing Protection Act reflect whistleblower
protections, remedies and sanctions for reprisals in the Fair Work
(Registered Organisations) Act 2009, including:
- protection from harassment, harm including psychological harm and
damage to property or reputation;
- remedies for exemplary damages;
- sanctions including civil penalties; and
- separating the grounds for criminal and civil liability.
As noted above, a particular advantage of the PID Act is section 14,
which provides clarity on options for courts to require both individuals and
organisations to be liable for compensation. The committee considers that there
would be value in extending such provisions to the private sector, including
corporations and registered organisations.
As with many of the reforms that the committee is recommending, this
would provide greater consistency between the relevant provisions across the
public and private sector legislation. Furthermore, the committee is of the
view that a case in the corporate sector where an individual was held
personally liable, to a greater or lesser extent, for compensation would be of
value to private sector organisations. This is because it would likely address
an aspect of the 'agency problem' by having a significant deterrent effect on individuals
considering taking reprisal action against other whistleblowers in the future.
The committee recommends that current provisions in section 14 of the Public
Interest Disclosure Act 2013, which clarify the options for courts/tribunals
in apportioning liability for compensation between individuals and organisations,
extend to apply to the private sector.
Navigation: Previous Page | Contents | Next Page