What is whistleblowing? Understand the legal protections and benefits

Whistleblowing is essential in maintaining accountability and transparency within organisations. It takes courage to expose misconduct. Understanding the legal protections and benefits available to whistleblowers is crucial. In this article, we'll explore whistleblowing, its definition, types, legal frameworks, and its impact on organisations and society.

Key Takeaways

• Whistleblowing is the disclosure of information about unlawful and unethical activities.
• It can be classified into internal, external or anonymous channels with legal protections for whistleblowers in corporate and aged care sectors.
• Best practices include creating clear policies, encouraging whistleblowing and anonymous reporting and fostering a culture of openness within organisations.

Definition of whistleblowing

Whistleblowing is the act of disclosing illegal or unethical activities to a responsible person or organisation. Whistleblowers can report various issues, including: 

• fraud
• data mishandling
• sexual harassment
• discrimination
• malpractice
• human rights violations
• physical abuse
• online harassment
• environmental damage
• non-compliance

They may disclose the wrongdoing to their employer, an external government agency, the media, or another organisation.

Types of whistleblowing

Whistleblowing can be classified into specific categories like internal, external, and anonymous, depending on the reporting channels employed. Internal or corporate whistleblowers are employees who report unethical or illegal actions by a fellow employee or superior within their company, often to an internal compliance department or ethics hotline. Making reporting channels available internally allows organisations to address issues directly and demonstrate their commitment to ethical practices and reporting wrongdoing.

External whistleblowing, on the other hand, involves reporting misconduct to outside individuals or organisations, such as:

• Government agencies
• The media
• Lawyers
• Law enforcement
• NGOs

Other local, state, or federal agencies that may handle workplace disputes or other relevant issues.

Anonymous whistleblowing utilises external channels to protect the anonymity of the whistleblower while reporting misconduct to senior management. Third-party channels, such as whistleblowing hotlines, provide toll-free phone numbers and/or web or app-based solutions that utilise encryption to guarantee the anonymity of the whistleblower.

Implementing a dedicated service for whistleblowers can have a beneficial effect on an organisational culture.

Who can be a whistleblower?

Potential whistleblowers can come from diverse backgrounds, such as employees, contractors, or even the public. They possess knowledge of malpractices within an organisation and should be aware of their whistleblower rights, including the importance of the whistleblower’s confidentiality.

In many countries, legal protections exist to safeguard whistleblowers from retaliation and ensure their confidentiality when making a protected disclosure, also known as a public interest disclosure.

Legal framework for whistleblower protections

Whistleblower laws can vary substantially between countries, with some offering exhaustive whistleblower protection while others have scant or no legal safeguards.

For example, the federal government has a statute in place to protect all federal employees from personnel action if they disclose information they reasonably believe is a legal obligation, such as:

• a violation of law, potentially leading to civil penalties
• gross mismanagement
• gross waste of funds
• abuse of authority
• a substantial and specific danger to public safety or health, which is in the public interest.

Australian laws and policies

In Australia, a comprehensive set of laws and policies have been put in place to ensure whistleblower protection in both corporate and not-for-profit sectors. These protections are outlined in the Corporations Act 2001 and the Taxation Administration Act 1953.

Under these laws, public companies, large proprietary companies, and corporate trustees of APRA-regulated superannuation entities are required to have robust whistleblower policy. For those organisations that aren't required to have a whistleblower policy, it is still advisable to have a plan in place. A policy must cover several critical aspects to ensure protection for whistleblowers.

Firstly, it should outline the legal protections available to whistleblowers. These whistleblower protections include immunity from civil, criminal, and administrative liability for making the disclosure. It also protects them from contractual or other remedies based on the disclosure. Interestingly, whistleblowers no longer need to act in good faith to be protected under these Australian laws. However, they must have reasonable grounds to suspect misconduct or a breach of law.

Secondly, the policy must describe the company’s process for investigating disclosures. This involves a fair and objective process that respects the rights of all individuals involved and ensures that the investigation is carried out competently and impartially.

Finally, the policy should detail the steps to protect whistleblowers from detriment. This includes measures to protect the whistleblower's identity and prevent retaliation, such as dismissal, harassment, or discriminatory treatment.

The Australian Securities and Investments Commission (ASIC) provides advice for whistleblowers, as well as practical guidance for companies on how to establish, implement, and maintain a whistleblowing policy. This guidance includes how to handle and investigate a disclosure and how to support and protect the whistleblower.

Enhancing Whistleblower Protections Act

The Treasury Laws Amendment (Enhancing Whistleblower Protections) Act 2019 brought about significant changes to the Corporations Act 2001 (Cth) and the Tax Administration Act 1953 (Cth). It affected all businesses, not-for-profit organisations operating as public companies.

The changes included a broader scope of protected disclosures, encompassing not just criminal violations but also breaches of tax, ASIC and APRA laws and disclosures about systemic workplace issues.

The categories of 'eligible whistleblowers' and 'eligible recipients' of disclosures have also been broadened. Now, anyone who has ever had a relationship with a company and senior managers, directors, auditors, and, in certain situations, journalists and politicians can be considered an eligible whistleblower. Finally, whistleblowers now have stronger protections, including enhanced immunity from prosecution, assurance of anonymity, and protection against victimisation. Whistleblowers no longer need to act in good faith to be protected, but they do need to have reasonable grounds to suspect misconduct.

International laws and regulations

International laws and regulations, such as the European Union’s whistleblower directive, provide varying levels of protection for whistleblowers. The European Union’s directive safeguards a broad range of free speech for whistleblowers, including journalists across all member states. It applies to both public and private sectors.

The European Court of Human Rights made a landmark decision. They established that whistleblowing should be regarded as a form of freedom of expression. This historic ruling has far-reaching implications, as it recognises the important role whistleblowers play in maintaining transparency, accountability, and integrity in various sectors, from government institutions to private corporations. By equating whistleblowing with freedom of expression, the court underscored the necessity of safeguarding those who expose serious misconduct, malpractices, or wrongdoing. This is a significant step forward in the fight against corruption and the promotion of ethical conduct. It sends a clear message that whistleblowers should be protected, not persecuted, for their courage and commitment to upholding the public interest.

The process of whistleblowing

Whistleblowing entails recognising malpractice, conveying it through suitable channels, and managing the potential fallout and repercussions. Whistleblowers must gather evidence of wrongdoing, such as violations of laws, mismanagement, or threats to public health and safety, and decide on the best course of action.

The decision to become a whistleblower is a difficult one, as it can have personal and professional implications. It requires a great deal of courage and moral conviction to step forward and call out unethical or illegal practices. The whistleblower often risks their career, reputation, and in some cases, personal safety to ensure that the truth is brought to light. This decision is not taken lightly and involves careful consideration of the potential consequences, the importance of the issue at hand, and the potential benefits that could result from the disclosure. Despite the challenges, many choose this path in the pursuit of justice, accountability, and the greater good.

Whistleblowing vs. anonymous reporting? What's the difference?

Whistleblowing refers to individuals stepping forward to disclose misconduct or wrongdoing, ranging from serious violations to health risks or any activity detrimental to people, the organisation, or society.

On the other hand, anonymous reporting provides a means for this disclosure. It's the avenue where employees can share their concerns without revealing their identity, ensuring their protection and anonymity.

Implementing robust and secure anonymous reporting channels is vital for businesses and institutions. Platforms like Elker provide a secure environment for this, using encrypted tools that let stakeholders highlight everything from minor inconsistencies to significant misdeeds without fear of backlash.

Encouraging whistleblowing in professional settings serves two purposes. First, it aids companies in pinpointing and mitigating potential risks swiftly. Second, it cultivates an organizational culture where individuals are motivated to speak up. This proactive approach safeguards a positive work atmosphere and prevents unforeseen crises.

Benefits of whistleblowing for public interest

Whistleblowing can facilitate the detection of fraud, including fraud on someone’s health, waste, and abuse, thereby promoting more effective and efficient organisations.

By bringing unethical practices to light, blowing the whistle can help eliminate corporate crimes, reshape company cultures, and safeguard victims from potential harm. It can also serve as a powerful tool to uncover and rectify misconduct within organisations, promote transparency and accountability, and ultimately lead to a healthier and more ethical work environment. By exposing wrongdoing, whistleblowers can play a pivotal role in maintaining the integrity of an organisation. They serve as a check and balance, ensuring that ethical standards are upheld and that any deviations from these standards are promptly addressed. This can lead to improved organisational performance, increased trust among stakeholders, and a stronger reputation for the organisation in the long run.

Enhanced transparency and responsibility are among the key advantages of whistleblowing, as organisations are held accountable for their actions and the public is made aware of any misconduct.

Encourage internal whistleblowing with Elker

Whistleblowing in the workplace requires the development of effective policies and fostering an atmosphere of openness within organisations. By putting in place clear policies that outline how to report misconduct and the protections that whistleblowers can expect, organisations can create an environment that encourages employees to voice their concerns without fear.

1. Ensure that employees are aware of the policies and that they are regularly updated: This can be accomplished through regular training sessions, company-wide meetings, and the use of internal communication channels. It is also beneficial to include information about whistleblowing policies in employee handbooks and onboarding materials. Regularly updating these policies is crucial to reflect changes in legal requirements and best practices.
2. Implement whistleblowing software or anonymous reporting channel: It is crucial to choose an appropriate channel for anonymous reporting concerns. This might be an internal mechanism set up by the company or an external, third-party tool like Elker to manage whistleblower reports. These platforms ensure confidentiality and often come with additional features that can help streamline the reporting process.
3. Conduct regular cultural audits: Through anonymous surveys, gather insights about the workplace culture, cybersecurity practices, and general conduct. This proactive approach can help in the early detection of potential issues and reinforces the idea that management values employee feedback and is keen on fostering a positive work environment.
4. Invest in staff training: It's not enough to have a system; staff should be educated about it. Equip your employees with the knowledge and resources they need to report confidently. Similarly, managerial staff must be trained in handling these reports, ensuring they address them sensitively and effectively.
5. Foster a safe and transparent workplace: Establish a robust company policy encouraging open communication. This policy should promote a safe environment for employees to voice their concerns without fear of retaliation. Furthermore, consistently communicating this policy reinforces the company's commitment to transparency and ethical conduct.
6. Protection against retaliation: One of the primary reasons employees hesitate to blow the whistle on wrongdoing is the fear of retaliation. Ensure stringent whistleblower protections are in place for those who come forward, and communicate these protections regularly.
7. Evaluation and constant improvement: Companies can proactively address concerns by analysing recurring patterns in reports and gathering insights from managers. This iterative, data-driven approach ensures the prompt resolution of issues and paves the way for broader organisational reforms.

Summary

Whistleblowing plays a pivotal role in promoting accountability and transparency within organisations. Understanding the legal protections, benefits, and challenges associated with whistleblowing is essential for both potential whistleblowers and organisations. By developing effective policies and fostering a culture of openness, organisations can support whistleblowers and ensure that misconduct is addressed and rectified.