Appropriate and tailored policies have an important role in setting the tone and culture of a workplace. Effective policies and training also help employers demonstrate they have taken reasonable precautions and exercised due diligence to prevent unlawful workplace conduct, which can be critical when defending sexual harassment and discrimination claims.
On the flip side, many employers have policies that aren’t needed, create unnecessary or onerous obligations, remove flexibility and discretion, and increase legal risk.
- Identify the policies that employers must have (or might otherwise be recommended).
- Identify policies that are not required, could be combined or used for a different purpose.
- Prepare and update policies for legal compliance and to reflect best practice across the relevant industry and that are consistent with the corporate culture, while retaining the right amount of flexibility and discretion.
- Recommend appropriate training programs for boards, executives and employees (and can deliver the training in person or online).
We particularly focus on compliant whistleblower policies. This is because, since 1 January 2020, the Corporations Act 2001 (Cth) (Corporations Act) has mandated that certain companies have a compliant whistleblower policy.
Companies that must have a whistleblower policy are:
- Public companies
- Large propriety companies
- Proprietary companies that are the trustee of a registerable superannuation entity
A proprietary company is defined as ‘large’ for a financial year if it satisfies at least two of the below criteria:
- Consolidated revenue for the financial year of the company and any entities it controls is
$50 million or more.
- The value of the consolidated gross assets at the end of the financial year of the company and any entities it controls is $25 million or more.
- The company and any entities it controls have 100 or more employees at the end of the financial year.
If a company becomes a large proprietary company during a financial year, it must have a whistleblower policy within six months after the end of that financial year.
There are significant penalties for not having a compliant whistleblower policy (currently, up to $165,000).
Even if a company isn’t required to have a whistleblowing policy it must comply with the whistleblowing provisions in the Corporations Act. These provisions are prescriptive, onerous and complex. Officers and senior managers have obligations under the legislation if they receive a report from a whistleblower and must handle the disclosure in accordance with the legislation.
Breach of the provisions can result in civil and criminal penalties in the millions for companies and individuals, and imprisonment for individuals.
By way of illustration, ASIC has recently started a prosecution against TerraCom and several of its senior executives for breach of the whistleblower provisions.
If a company isn’t required to have a formal whistleblower policy, there’s still benefit in documenting and establishing a strategy for dealing with any whistleblower reports in line with the legislative requirements.
Workplace Health and Safety (WHS) laws
Companies have onerous obligations to ensure WHS. In addition, officers and senior managers have personal duties of due diligence. It’s critical that these individuals understand their duty of due diligence and (most importantly) the practical measures they can undertake to exercise due diligence and discharge their duties systematically and continually.
Legislative reform in 2023 has resulted in a significant change in focus of the Sex Discrimination Act (1984) (Cth) (SDA) from a complaints-based system to a positive duty to prevent sexual harassment, sex-based harassment and discrimination, hostile work environments and victimisation. The new positive duty under the SDA is similar to the positive duty under WHS laws and needs to be approached in a similar way.
The latest proposed amendments to the Fair Work Act 2009 (Cth) propose important changes in relation to wage theft. If passed, the reforms will make a company criminally liable if it intentionally fails to pay employees their minimum entitlements, which will include failing to ‘create and maintain’ a corporate culture that requires compliance. There will be serious consequences for non-compliance including fines of up to $7.8 m or three times the underpayment, and 10 years imprisonment for individuals.
Board and Executive Briefings
Source’s briefings for officers and senior executives cover:
- The personal duties of ‘due diligence’ under the WHS legislation.
- The duties and obligations relating to managing WHS hazards and risks, including psychosocial risks, in accordance with the established principles of WHS risk management.
- The new positive duty under the SDA to take reasonable and proportionate measures to eliminate, as far as possible, sexual harassment, sex-based harassment and discrimination, hostile work environments and victimisation in the workplace.
- The ‘reasonable steps’ required to exercise due diligence, comply with personal duties and adequately manage duties under WHS legislation and the SDA.
- Positive and active measures to create and maintain a compliant culture to ensure wage compliance.