This year has seen two pieces of legislation come out that, on the face of it, target corporates and large private companies.
The new rules around Whistleblower protections and Modern Slavery may at first sight, be something you think will not impact your business. However, it is worth taking a closer look at both of these areas, as the potential impact could spread much further than the big end of town.
First, let’s take a quick look at both of these and then we can start to assess the potential impact on your business.
Changes to the Australian whistleblower protections law came into effect on 1 July 2019.
The new laws are designed to encourage whistleblowers to speak up about misconduct or dishonest or illegal activity without fear of intimidation, disadvantage or reprisal.
The key reforms include expanding the scope of disclosable matters, expanding the category of people who can make disclosures, providing greater protections for whistleblowers, and increased obligations on companies to comply with the legislation with higher penalties for breaches.
What are the key changes?
- Expands the definition of eligible whistleblowers to include officers, current and former employees, contractors and suppliers (and their employees), associates, and relatives of these people.
- Allows protected disclosures to be made about a broad range of misconduct including fraud, bribery, corruption and money laundering.
- Allows for anonymous disclosures.
- Increased protection for eligible whistleblowers.
- Narrows the scope of persons who can receive disclosures.
- Increased penalties for breaching whistleblower protections (up to $10.5 million).
- Requirement for public companies, large proprietary companies and proprietary companies that are the trustee of a registrable superannuation entity to introduce a Whistleblower Policy
It is recommended that ALL companies implement this policy as a matter of best practice.
The Commonwealth Modern Slavery Act 2018 (the Act) was passed by the Australian Parliament on 29 November 2018 and came into effect 1 January 2019. It requires entities operating in Australia with annual revenue of $100 million or more to submit annual statements on potential modern slavery risks within their operations and supply chains our emphasis and steps they are taking to address these risks. If you are based in New South Wales, you should note there is also state legislation with obligations on companies with $50 million in annual revenue.
The first statement under the Act must be submitted in 2020 within 6 months of the entity’s reporting year.
What is Modern Slavery?
The term ‘modern slavery’ refers to a range of exploitative practices including slavery, servitude, child labour, forced labour, human trafficking, debt bondage, forced marriage and deceptive recruiting for labour or services, or where a person cannot refuse or leave work because of threats, violence, coercion, abuse of power or deception.
What needs to be reported?
The Modern Slavery Statement must describe:
- The entity’s structure, operations and supply chains
- The potential modern slavery risks in the entity’s operations and supply chains
- Steps taken to assess and address the modern slavery risks in the operations and supply chains of the reporting entity and its controlled entities
- How the entity assesses the effectiveness of these actions
What does all of this mean for my business?
At this point you may be thinking, ‘So What?’ This legislation is great, you can see why it’s there, but it is about stopping large companies doing the wrong thing. So far so good.
But what about your clients, the people and businesses that to which you offer your services? Remember:
- Under Whistleblower policies, will they need to have something in place to ensure you meet the standards they are required to meet? Is it possible that they have someone who decides to blow the whistle on some real or perceived actions that could affect your relationship with them?
- Modern Slavery requirements involve entities examining and reporting on their assessments of their entire supply chain. What, as their supplier, will they be asking of you?
If any of this is the case, we suggest you start thinking now, about what you need to put in place to ensure you can continue to service your large clients. Do you need to speak to them about reporting requirements. Would it be wise to have your own Whistleblower policy. These are all important considerations.
Employee Matters would be happy to talk to you about these issues and help you with your own Whistleblower (and all other HR) policies.
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