The pandemic has put all Australian businesses at higher risk of fraud, corruption, and employee misconduct with the increased pressures on employees, executives, and business owners during the fight to sink or swim. Since the pandemic began, the Australian Securities and Investments Commission (ASIC) has reported a 20% spike in misconduct claims. Organisations are grappling with the “new normal” and how to best manage remote working, operating with reduced workforces and importantly, maintaining connection amongst employees.
More often we are seeing examples of fraud, corruption and employee misconduct reported across the media involving politicians and government officials, executives of listed companies, and high-profile personalities in sports and entertainment. Over the past six months we have examples such as –
- The Melbourne hotel quarantine fiasco where poor procurement practices and supplier risk management led to Melbourne’s second COVID outbreak, resulting in 768 deaths • The non-disclosure of personal relationships by New South Wales Premier Gladys Berejiklian with former disgraced MP Daryl Maguire
- Former Nine Entertainment CEO Hugh Marks who was forced to stand down in early November for failing to declare a personal relationship with a direct executive report
We cannot forget our professional athletes with several accused of taking performance enhancing drugs and footballers across multiple codes accused of domestic violence, sexual assault, and quarantine breaches.
Whilst these stories attract significant media coverage (due to the high-profile nature of those involved), it underscores the general rise in the detection and reporting of employee fraud, corruption and misconduct that is occurring across corporate Australia.
The rise in issues reporting can likely be attributed to an ongoing and increased expectation from employees and the wider community as to what constitutes acceptable conduct. This can be attributed to the plethora of royal commissions and public inquiries over the last several years regarding institutional sexual abuse, banking and financial planning scandals, in addition to the poor quality of aged care services being delivered.
Another key driver in the increased reporting of misconduct can be attributed to the introduction of the Treasury Laws Amendment Act 2020 which saw the introduction of new laws within the Corporations (and other) Acts to strengthen protection for corporate whistleblowers.
Whilst the introduction of new laws provides greater protection for whistleblowers, it also expands coverage of who can be classified as a whistleblower.
At Core Integrity we specialise in helping organisations protect their people, reputation and bottom line. Our team are recognised experts in whistleblower services through the provision of our leading Speak Up Integrity Hotline programs. Our mantra is to help all organisations create a safe speak up culture and educate clients on enabling employees to speak up early, and often, on a wide range of issues without being prescriptive as to what employees can report.
Tip-offs from employees continue to be the number one source to uncover instances of fraud and corruption. Forty-three percent of all reported schemes uncovered by tips saw half of those tip-offs reported by employees. When it comes to serious issues of fraud, corruption, bullying and sexual harassment where senior executives are involved, employees are more likely to report these issues to an externally managed hotline in the first instance.
Despite these increases, we are still regularly seeing organisations who simply want to tick the ‘compliance’ box with the legislation. Others are not sure what to expect if they do open listening channels.
It’s clear that more education and training is required to teach employees about their rights, what they should expect when it comes to speaking up, and how they can claim protection as a whistleblower.
So, what are the rights of employees who are looking to speak up and become a whistleblower?
- Eligible Whistleblower – Eligible whistleblowers have significantly expanded to offer protection to a wider range of people including current or former employees (including spouses, dependents, or other relatives), suppliers, contractors (including their employees), and company officers.
- Disclosable Conduct – Reports must be about misconduct or an improper state of affairs to be eligible. Whilst this can be a somewhat broad, you are able to report issues such as fraud, theft, bribery, corruption, and other types of serious misconduct. Importantly, you cannot make a report solely about a personal work-related grievance.
- Good Faith Element - There is no longer an obligation for the whistleblower to demonstrate good faith or their reasonable grounds of suspicion in making a report.
- Anonymous Disclosures - Whistleblowers can remain anonymous and still be classified as an eligible whistleblower making a disclosure of reportable conduct. This highlights the importance in ensuring your people can make an anonymous report safely without being identified. It is illegal to release a whistleblower’s identity without their consent.
- Compensation - Compensation is available to the whistleblower if it is proven they have been victimised, including items such as access to an apology, reinstatement, or damages. 6. Emergency Disclosures – In the event you attempt to report your concerns internally or to another eligible recipient, and your concerns are ignored, you can make an ‘Emergency Disclosure’. There are strict conditions on how protected disclosures can be made to members of parliament or journalists should you wish to be still classified as an ‘eligible whistleblower’. Where feasible, you should report your concerns to the entity itself (or to its designated hotline service) and the ASIC or APRA before making an emergency disclosure to a journalist or member of parliament.
- Penalties for non-compliance - It is illegal for a person to cause you injury, harm or threaten you – your employer cannot sack, demote, discriminate, or take legal action against you due to
reported misconduct as an eligible whistleblower. Penalties can be levied at both an individual and corporate level.
- What types of entities are captured? – All publicly listed companies and large proprietary companies are captured by the legislation. Organisations are legally required to have an up to date Whistleblower Policy that is readily available. All staff must be educated on how they can make a report, how it will be dealt with and what to expect. Whilst this is the minimum requirement, proactive organisations and those looking to demonstrate good corporate governance are going further by implementing externally managed hotline programs to ensure people can speak up safely and securely.
Whether you know a little or a lot about whistleblowing, the reality is we all have a role to play in upholding the culture of our workplace. If you see something that doesn’t align with the organisation’s values or is outright illegal, you not only have a moral obligation to speak up but could also have a legal duty to report it.
Take the time to review your company’s policies and check whether your organisation has a whistleblower policy. If you witness instances of fraud, misbehavior, or misconduct, speak up early to help reduce the impact of the issue on your organisation and those involved in the issue itself. Core Integrity are here to provide advice – reach out here.