Whistleblower proposal a "big risk" for employers

By Alan J. McDonald

The Federal Government is considering a bounty-style reward worth millions of dollars for employees who disclose illegal conduct by a company. McDonald Murholme Senior Associate Bianca Mazzarella comments on how the regime would definitely irk employers, as it would prevent them from investigation situations involving whistleblowers.

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Whistleblower proposal could create “big risk” for employers

A big risk for organisations if the Federal Government introduces a bounty-style reward for whistleblowers is people bypassing robust internal reporting systems and going straight to a regulator, an employment lawyer says.

Financial Services Minister Kelly O’Dwyer told a recent University of Melbourne seminar that the Federal Government has set its sights on improving the current “confusing, ineffective” whistleblower laws, whose protections are “sorely lacking”.

The Government aims to strengthen the current regime to protect a broader class of people (including former employees and contractors), and improve their access to compensation for any reprisals suffered, O’Dwyer says.

Further, it is also considering whether to offer a bounty-style reward to whistleblowers whose reports lead to successful prosecutions.

O’Dwyer concedes this could encourage “greater levels of nuisance reporting” leading employers to waste resources checking claims that lead nowhere, and Ashurst competition partner Alyssa Phillips told HR Daily the prospect raises a number of issues.

The biggest of these is that even if they have a robust internal reporting system, employers could find workers bypass it and “go straight to the regulator to report misconduct because they want to get the bounty payment”.

She notes, however, that generally whistleblowers aren’t motivated by money when they report wrongdoing, “and in many cases they have raised concerns internally first that have not been heeded, and that’s when they’ve felt that they had to go outside the organisation”.

“If you’ve got the right culture internally, and people know that they’re listened to and if they raise a concern it will be addressed, I think that is the best [way to mitigate] someone just going and reporting you.”

McDonald Murholme‘s Bianca Mazzarella adds the regime “would definitely irk employers” because it would be taking control away from them in investigating whistleblowers’ claims.

Reference: ‘Whistleblower proposal a “big risk” for employers; 1 July changes; FWO improving compliance; and more’, HR Daily, 29 June 2017