Definition of whistleblowers and thresholds for protection
This chapter discusses the committee's consideration of public and
private sector legislation against the best practice criteria for a broad
definition of a whistleblower, and thresholds for protection. This section also
covers four issues that have come to the committee's attention during the
inquiry that are not formally included in the best practice criteria, however,
they are closely related to them:
- protections for suspected whistleblowers;
- protections for suppliers and customers;
- protections for those handling disclosures; and
- continuity of protection.
Broad definition of a whistleblower
There is a significant disparity between the PID, FWRO and Corporations
Acts as to who qualifies as a whistleblower under the current definitions.
For the public sector, the PID Act defines a whistleblower through the
- section 7 provides for protecting public officials and former
public officials from adverse consequences of disclosing information that, in
the public interest, should be disclosed;
- section 26 provides that a public interest disclosure can be made
by a person who is, or has been, a public official; and
- section 69 of the PID Act sets out 20 categories of public
officials and the agencies to which they belong.
However, the definition of a public official in subsection 69(1) of the
PID Act does not appear to align clearly with the definitions set out in
sections 7 and 26. The committee discusses this further in the committee
view at 6.58 and 6.59, and makes a recommendation on this matter in
For registered organisations the FWRO Act provides the following
explicit definition of a whistleblower in Part 4A Division 1, subsection 337A(1):
- the discloser is one of the following:
- an officer or former officer of an organisation, or of a branch of an
- an employee or former employee of an organisation, or of a branch of an
- a member or former member of an organisation, or of a branch of an
- a person who has or had a contract for the supply of services or goods
to, or any other transaction with, an organisation or a branch of an
- a person who has or had a contract for the supply of services or goods
to, or any other transaction with, an officer or employee of an organisation or
of a branch of an organisation who is or was acting on behalf of the
organisation or branch;
- an officer, former officer, employee or former employee of a person
referred to in subparagraph (iv) or (v).
In contrast to the above two Acts, the Corporations Act has a much
narrower definition that does not include former staff and others. Subsection
- the discloser is:
- an officer of a company; or
- an employee of a company; or
- a person who has a contract for the supply of services or goods to a
- an employee of a person who has a contract for the supply of services or
goods to a company.
Statistics on who has blown the
The annual reports of the Commonwealth Ombudsman provide information on
the types of disclosers who made public interest disclosures as shown in
Table 6.1. Similar data was not available for the corporate and registered
Table 6.1: Types of disclosers in the public sector
|Current public officials
|Former public officials
|Deemed to be a public
official under section 70 of the PID Act
Ombudsman Annual Reports 2013–2014, p. 75; 2014–2015, p. 69, [NOTE: contractors
are listed in a separate note in the text]; 2015–2016, p. 74.
Table 6.1 indicates that contracted service providers can be a
significant source of disclosures. Given the significant overlap between the
public and private sectors, for example when public sector agencies out-source
particular services to private contractors, it will be important to ensure
consistency between public and private sector whistleblower protections (see
below and the discussion in Chapter 3).
The following sections cover particular areas in which the protections
for whistleblowers could be broadened and clarified, and areas where those
protections could be harmonised between the public and private sectors.
Former staff, former contractors,
In the public sector, Table 6.1 shows that former public officials
contributed seven to nine per cent of disclosures in the first three years of
the operation of the PID Act. This highlights the importance of ensuring
- the PID Act is unambiguous that it applies to former public
- private sector whistleblower definitions also explicitly provide
for former staff of various kinds (including contractors) to be afforded
The committee received evidence from witnesses supporting the inclusion
of former staff in whistleblower protections. For example, Mr Warren Day,
Senior Executive Leader, ASIC told the committee that former staff were a
valuable source of information on wrongdoing:
...some of the better information that we have received has
come from former employees.
However, ASIC Commissioner, Mr John Price warned the committee that as
things currently stand, former employees are not afforded any protection under
the Corporations Act if they blow the whistle on a former employer:
The most obvious example is former employees. It may well be
a situation that an employee decides, as a result of the experience they have
had with a company and their concern about the wrongdoing, the best thing for
them to do is seek other employment. As soon as you do that, you are outside
the existing test in the Corporations Act.
Ms Rani John, a partner at DLA Piper, supported expanding the definition
of whistleblowers to include a company's former employees, directors and
officers, service providers, accountants and auditors, unpaid workers,
contractors and business partners. She told the committee that such a
legislative change would be both positive and appropriate.
The Australian Council of Trade Unions (ACTU) noted that the systems that
apply to the public and corporate sectors operate on the assumption that
whistleblowers are insiders, including employees and contract workers. Mr
Trevor Clarke from ACTU informed the committee it was vital that former
employees gained whistleblower protections under the Corporations Act:
Certainly, a large amount of what we know about worker
exploitation comes from those sources. That can expose employees to reprisals
at the workplace level and to reputational damage. That can impair their
employability in their chosen industry. In the case of former employees, they
have absolutely no protection under the Corporations Act framework. We strongly
believe that needs to change.
Ms Maureen McGrath, Chair of the Legislative Review Committee, the GIA
argued for an even broader definition of whistleblowers to include any person
who makes a disclosure of alleged corporate wrongdoing. The GIA suggested that the
test for qualifying should be connected not to the capacity in which the
discloser has access to information but rather to the information itself and
the honest and reasonable belief in the genuineness of that information.
The committee notes that subsection 7(1a) in the Division 3 overview and
subsection 26(1a) of the PID Act provide that former public officials are able
to make public interest disclosures.
However, the definition of a 'public official' in subsection
69(1) of the PID Act uses the following description: 'Agency to which the
public official belongs'. The committee considers that such a definition has the
potential to create uncertainty as to whether a former public official who no
longer 'belongs' to an agency is covered by the PID Act. While the committee
accepts the principle that legislation should be read holistically, the current
definition in subsection 69(1) appears to introduce unnecessary ambiguity. The
committee considers that it would be possible to provide much greater clarity
by amending the definition in subsection 69(1) and using words such as: 'Agency
to which the public official currently belongs or formerly belonged'.
The committee is also of the view that the protections of public
officials be extended to those operating as contractors to public sector
The committee recommends that section 69 of the Public Interest
Disclosure Act 2013 be amended to make it explicit that former public
officials, as well as current and former contractors to the Australian Public Service,
are able to make public interest disclosures.
Evidence to the committee from a range of witnesses strongly supported
changing the current definitions of who can be a whistleblower under private
sector legislation to include former staff and former contractors. These
persons currently receive no protection under the Corporations Act.
Furthermore, as the corporate regulator pointed out, some of their most
valuable information comes from former employees.
In light of the evidence received, the committee is strongly of the view
that it would be appropriate for all private sector whistleblower protections
(including the Corporations Act) to apply to former staff, current and former
contractors, and current and former volunteers.
Furthermore, with respect to the discussions regarding consistency in
Chapter 3, the committee considers that the public and private sector
protection for former staff and others could be aligned, with appropriate
categories of people to be specified for each sector.
The committee recommends that all private sector whistleblower
protection legislation include protections for current and former staff,
contractors and volunteers.
Protections for suspected whistleblowers
The committee also heard evidence that whistleblower protection
legislation may also need to contain provisions that would protect persons that
have been subjected to reprisals on suspicion of their being a whistleblower,
but who may not in fact have made a disclosure or even intended to do so.
For example, ASIC drew the committee's attention to the following
You can see a scenario where there are two people working
side by side. One is actually the whistleblower and the other one knows nothing
about what is going on, but they work in the same place. The second person is
completely oblivious to what is going on. Management come down from on high and
think there is a leak and are really concerned they have a whistleblower and
want to take harmful action against both employees. We would say that the
second employee, the person who is oblivious to what is going on, is just as
victimised as the first person, even though they are not the whistleblower.
The committee notes that the three Acts it is considering have some
provisions relating to such protections:
- paragraph 13(1)(b) of the PID Act provides protection for someone
who has made or proposes to make a public interest disclosure, as well as a
person who is suspected of making a public interest disclosure;
- subsection 337BA(1b) of the FWRO Act provides protection for someone
who has made, may have made, proposes to make or could make a public interest
- subsection 1317AC(2cii) of the Corporations Act provides some
protections against reprisals.
For offences for reprisals under section 19 of the PID Act it is not
necessary to prove that a person made, may have made, or intended to make, a
disclosure. Similar provisions in the FWRO Act apply to both civil and criminal
On the evidence provided by the corporate regulator, the committee
considers that there is potential for reprisal action to be taken against an
unwitting non-whistleblower in the private sector.
In light of the above, the committee considers that the provisions in both
the public and private sectors could be improved to be consistent and ensure
that they cover threats to, and actual reprisals against, people who:
- have made a disclosure;
- propose to make a disclosure;
- could make a disclosure but do not propose to; or
- may be suspected of making, proposing to make, or be capable of
making a disclosure, even if they do not in fact make a disclosure.
The committee recommends that protections in both the public and private
sector be made consistent for threats or actual reprisals against people who:
have made a disclosure;
propose to make a disclosure;
could make a disclosure but do not propose to; or
may be suspected of making, proposing to make, or be capable of
making, a disclosure, even if they do not make a disclosure.
Protections for those handling disclosures
Another area that came to the committee's attention during the inquiry
was the potential vulnerability of recipients of disclosures in some cases. For
example, if a person makes a disclosure to their supervisor who is a low to mid-level
manager in an organisation, the recipient may also be a in a vulnerable
position. Equally, the person tasked with handling the disclosure such as an
authorised officer or an investigation officer may be at risk of being targeted
because they are investigating, or even considering investigating, a disclosure
about a senior public official. Such officers may not have sufficient power
within the organisation to deal with the disclosure effectively and may also be
at risk of reprisals from those alleged to have engaged in disclosable conduct.
In fact, such a recipient may face a dilemma: on the one hand wanting to do the
right thing with the disclosure and assist the discloser, and at the same time
being aware that their career could be destroyed by reprisals if they take the action
which may be required of them under whistleblower legislation.
The committee considers that the situation described above represents a potential
impediment to effective whistleblower protections. In the committee's view, there
is limited value in protecting the discloser if the recipient or others
required to take action are either placed in a vulnerable position, or have a
reasonable apprehension that they may be placed in a vulnerable position, by
actual or potential reprisals emanating from those in more senior or more powerful
It is not clear to the committee that the FWRO Act and the Corporations
Act provide any protections for recipients or others required to take action in
relation to disclosures. The PID Act includes some limited protections in subsection
78(1) relating to performing functions required under the PID Act. However, the
committee notes that this protection posits a 'good faith' threshold for
protection, which is a requirement that has been widely criticised as falling
far short of international best practice (see the discussion later in this
chapter in the section on 'thresholds for protection' starting at 6.44).
The committee considers that adequate protection for recipients should
be developed for both the public and private sectors in a consistent fashion.
The committee considers that the protection should apply for the performance of
the functions of recipients or others required to take action in relation to
disclosures without regard to their motivation.
The committee recommends that protections for recipients of disclosures
in both the public and private sectors be made consistent, and cover the
performance of any and all functions required of recipients or others required
to take action in relation to disclosures, without regard to their motivations.
Protections for suppliers and customers
During the inquiry it came to the committee's attention that existing
whistleblower protections largely focus on protecting individuals and that
there were very little, if any, protections for businesses that may suffer
reprisals. For example, a small to medium business operating as a supplier to, or
customer of, a much larger business could suffer reprisals if one of its
employees made disclosures about the conduct of the larger business.
The ACCC provided some relevant examples to the committee during the
inquiry. The first case involved businesses with supply arrangements to Coles:
We had a case against Coles which was a case in which we
alleged unconscionable conduct by Coles. We said that they had acted
unconscionably in withholding money from their suppliers without their consent,
when they had no contractual right to do so. We experienced significant
difficulty and delay during our investigation, due in part to the lack of
adequate whistleblower protections under the Competition and Consumer Act.
There were a number of suppliers who refused to provide
affidavit evidence—that is, court evidence—for fear that it would jeopardise
their commercial relationship with Coles, and frankly we had no way of giving
them any comfort that their relationship would not be jeopardised.
The second example provided by the ACCC involved businesses with supply
arrangements to Woolworths:
...the Mind the Gap case. This was the case in which the judge
said that it was not unconscionable for Woolworths to say to suppliers, 'You
must pay us the difference between our profit expectations and the profits
we're actually receiving, even though we have no contractual right to receive
that.' So that was not unconscionable according to Justice
Yates. In part, he made it clear that his view was formed because he did not
have evidence about the broader circumstances of the dealings with suppliers.
We did not produce evidence of the broader dealings with suppliers because we
felt we needed to respect the commercial positions of the suppliers by not
parading them before the court and putting them at risk of losing their
business with Woolworths.
The committee notes that in both the cases discussed above there was a
lack of appropriate protections for both the individuals and the businesses
concerned. The committee considers that the enhanced whistleblower
protections recommended in this report could provide appropriate protections to
the individuals. However, there would still be limited or no protection from
reprisals for the businesses, particularly small to medium businesses that have
supply arrangements with a much larger and more powerful apex business.
While the above examples involved suppliers being vulnerable to
reprisals, the committee notes that other small businesses, for example a
retail franchise, or a customer business in the utilities sector, may also be
vulnerable to reprisal action taken by a much larger business. Apart from in
the case of the principal-contractor relationship, a Whistleblower Protection
Act would not apply to one business whistleblowing on another business.
The committee has not had the opportunity during this inquiry to
adequately investigate protections for reprisals against businesses and the
relationship to competition and consumer law, or the functions of the
Australian Small Business and Family Enterprise Ombudsman (ASBFEO). Apart from
in the case of the
principal-contractor relationship, a Whistleblower Protection Act would not
apply to one business whistleblowing on another business.
In light of the evidence received from the ACCC, however, the committee
considers that such matters are worthy of an inquiry by the Parliament or the
The committee recommends that an inquiry be conducted by either a
parliamentary committee or the Australian Small Business and Family Enterprise
Ombudsman into protections for reprisals against businesses where whistleblowers
in those businesses make public interest disclosures about disclosable conduct
by larger businesses.
Thresholds for protection
This section discusses the committee's consideration of the best
practice criterion on thresholds for protection and how those thresholds vary
across existing whistleblower protection legislation.
In addition to the disclosures being required to contain disclosable
conduct as discussed in Chapter 5, each of the following three Acts includes a
test for whether the discloser is genuine, as follows:
- the PID Act (section 26): the information tends to show, or the
discloser believes on reasonable grounds that the information tends to show,
one or more instances of disclosable conduct;
- the FWRO Act (in Part 4A Division 1, subsections 337A(1c) and (3c)):
the discloser has reasonable grounds to suspect that the information indicates
one or more instances of disclosable conduct by:
- the organisation or a branch of the organisation; or
- an officer or employee of the organisation or of a branch of the
- the Corporations Act (subsections 1317AA(1d) and (1e)):
- the discloser has reasonable grounds to suspect that the
information indicates that:
- the company has, or may have, contravened a provision of the
Corporations legislation; or
- an officer or employee of the company has, or may have, contravened a
provision of the Corporations legislation; and
- the discloser makes the disclosure in good faith.
The main difference between the three Acts is the extra 'good faith'
test in the Corporations Act.
Evidence received by the committee
Some submitters informed the committee that they supported the 'good
faith' test remaining in legislation. For example the Financial Planning
Association of Australia (FPA) supported the 'good faith' requirement and
argued that individual whistleblowers do not usually have the legal knowledge
to relate the suspicious activity to the relevant legal requirements. The FPA
suggested that it is therefore unreasonable to require an individual to determine
if suspected wrongdoing has occurred.
However, the majority of submitters supported removing the 'good faith'
Clayton Utz informed the committee that it considered the 'good faith'
requirement to be an onerous and ambiguous burden placed on whistleblowers which should
While noting that the 'good faith' requirement was originally inserted as a safeguard against
vexatious claims, Clayton Utz argued that
of the Corporations Act, which provides that
the whistleblower must have
'reasonable grounds to suspect' a contravention, is an adequate safeguard against vexatious
Clayton Utz also stated:
The 'good faith' test is dependent on the
whistleblower's motive which is an irrelevant
consideration. It is in the public interest for information about corporate
misconduct to be
disclosed, regardless of the whistleblower's motive. It should be the veracity of a claim, not the intent
behind it which determines whether a whistleblower receives protection.
DLA Piper also argued for the removal of the 'good faith' requirement,
informing the committee that the 'good faith' requirement has the potential to
deny protection to whistleblowers who otherwise make qualifying disclosures
because they have multiple motives for doing so.
DLA Piper supported the introduction of a requirement that one of the following
conditions be met in order for a disclosure to qualify for protection:
- the person making the disclosure holds an honest and reasonable
belief that the disclosure shows presumed wrongdoing (the subjective test); or
- the disclosure does show, or tends to show, proscribed
wrongdoing, irrespective of the person's belief (objective test).
The AICD supported replacing the 'good faith' requirement
with the alternative requirements suggested by the Senate Economics Reference Committee
inquiry into the performance of ASIC, which would require that, to be
protected, a disclosure:
- is based on an honest belief, on reasonable grounds, that the
information disclosed shows or tends to show wrongdoing; or
- shows or tends to show wrongdoing, on an objective test,
regardless of what the whistleblower believes.
The Australian Lawyers Alliance (Lawyers Alliance) argued that there
should be no requirement that disclosures be made in 'good faith', as long as
the individual making the disclosure has reasonable grounds on which to believe
that the information disclosed is true and indicates that disclosable conduct
has taken place. The Lawyers Alliance suggested that the motivation of the
discloser is not material to whether disclosable conduct has taken place, and
even disclosures made in the absence of good faith can reveal important conduct
that needs to be remedied.
The GIA pointed out that replacing the 'good faith' requirement with a
requirement that a disclosure is based on an honest belief on reasonable
grounds would be clearer to potential whistleblowers:
The term 'honest and reasonable' could assist in clarifying
that the emphasis is on the genuineness of
the belief in the information being disclosed and not the motive for making
such a disclosure. We also consider that the term 'honest and reasonable' is
one which whistleblowers are better
able to understand.
ASIC indicated that it would be comfortable with a threshold based on
'honest belief' or 'reasonable grounds'.
Mr Day, Senior Executive Leader, ASIC informed the committee that the 'good
faith' test is counter-productive and ASIC no longer applies it:
Effectively in a way, we are ignoring that good faith test in
the way that we look at that legislation now. I am the first to admit that I
think it got in the way of some of our deliberations five years ago or so
because we found ourselves probably unnecessarily being caught up with this
quandary of: is this person making a disclosure to us and has it been done in
good faith? I think we are now in a position where we say: 'We do not care.
They have made a disclosure to us. We will treat them as a whistleblower, we
will honour that information'.
Professor A J Brown argued that the 'good faith' threshold requirement
is out of date and inconsistent with the approach taken by Australia's public
sector whistleblowing legislation, as well as best practice legislative
approaches elsewhere, including the UK.
Professor Brown noted that in the UK:
...the issue of 'good faith' is reduced to a consideration when
the quantum of damages for compensation for a whistleblower is considered i.e.
if an employer can show 'bad faith', then the damages may be reduced by up to
25 per cent.
Professor Brown further explained that the 'good faith' requirement may
be counter-productive because it is likely to deter people from making a
Motives are notoriously difficult to identify and may well
change in the process of reporting, for example, when an internal disclosure is
ignored or results in the worker suffering reprisals. Because it is such a
subjective and open-ended requirement, the likely effect of a good faith test
is negative — that workers simply choose not to report their suspicions about
wrongdoing, because they are unsure whether or how this test would be applied
to their circumstances.
The proper tests
are simply whether the disclosure is based on an honest belief, on reasonable
grounds, that the information shows or tends to show defined wrongdoing.
The committee notes that at least two previous inquiries, including one
by this committee, have recommended that the 'good faith' requirement be
removed from the Corporations Act:
- In 2004, the committee examined the CLERP Bill which proposed the
introduction of the corporate sector whistleblower protections. The committee recommended
removing the 'good faith' requirement, arguing that the protections should be
based on the premise that 'the veracity of the disclosure is the overriding
consideration and the motives of the informant should not cloud the matter. The
public interest lies in the disclosure of the truth.'
- In 2014, the Senate Economics References Committee recommended
that it be removed, arguing that the
'good faith' requirement serves as an unnecessary impediment to whistleblowing.
The committee considers that the weight of evidence before it strongly
makes the case for removing the 'good faith' requirement. In terms of best practice
criteria, the committee considers that this amendment would allow the
thresholds for protection to be further aligned and made consistent across the
public and private sectors.
The committee recommends that:
the 'good faith' test not be a requirement for protections under whistleblowing
protection legislation; and
a person be required to have a reasonable belief of the existence
of disclosable conduct to receive protections under a Whistleblowing Protection
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