It is not always easy to speak out when you see wrongdoing in your organisation – particularly when it could result in serious, well-funded litigation against your person. That is set to get easier in Australia thanks to new laws to protect whistleblowers who have seen businesses carrying out illegal or unethical activity, and want to set it right. The Treasury Laws Amendment Bill (2017) will, once in effect, enhance legal protections for whistleblowers who report bad corporate behaviour to various authorities like ASIC and the AFP. Most notable of these: protections for reporting of a far broader range of offences – essentially, anything that could result in a jail term of a year or more.
Apart from this, however, whistleblowers can also take a stand knowing they are protected by a range of other legal precedents and rulings in Australia. Here are some of the key things that every employee should know in case they spot wrongdoing in their organisation:
- The truth is never defamatory.
Whistleblowers often worry about the risk of being sued for defamation by the organisations they are seeking to expose. They are not wrong to do so. Defamation occurs when a person’s or organisation’s reputation is unfairly tarnished by someone with a motive for doing so – and whistleblowers certainly have motive, even if it may be a well-meaning one. This makes going to the media with allegations of wrongdoing a particularly risky move, even if it may be the only option for driving meaningful change.
There is, however, one ironclad defence against defamation for whistleblowers: “you cannot sue if it is true”. If whistleblowers can muster enough evidence to guarantee their claims are true on the balance of probability, they are safe from defamatory counter-suits regardless of whether they go to the authorities or the media. Though you will certainly want to make sure your evidence is reliable and comprehensive.
Criminality is not subject to confidentiality.
If you report criminal activity in your organisation, does that constitute a breach of your non-disclosure agreement? Here, Australian law is extremely clear: it does not. In an English case dating back to 1856, which has often been followed in Australia, the Judge found:
“…there is no confidence as to the disclosure of iniquity. You cannot make me the
confidant of a crime or a fraud, and be entitled to close up my lips upon any secret
which you have the audacity to disclose to me relating to any fraudulent intention on
your part: such a confidence cannot exist.” (Gartside v. Outram, 1856)
In simpler terms: you cannot force someone to keep a crime confidential, no matter what they have signed. That is a rule which Australian courts have been extremely aggressive in upholding, which should give whistleblowers – even those under strict NDAs or other contracts limiting disclosure – the confidence, pun intended, to speak out for what is right.
In fact, whistleblowers may be in greater personal danger if they do not disclose the crimes that they have witnessed. Section 316 of the Crimes Act in NSW, for one, indicates that failure to disclose a serious crime, known as a “serious indictable offence”, can lead to up to two years’ imprisonment. Additionally, “serious indictable offence” refers not just to your usual felonies – murder, armed robbery, drug or people trafficking – but a range of other offences including tax evasion, occupational health and safety breaches, and even commercial scale infringements of copyright. The best bet for potential whistleblowers is to be brave and contact the right parties with what they know, or risk going down with the metaphorical pirate-ship.
Make your message count.
The question many whistleblowers face, particularly in the case of “white-collar crimes”, is: who to tell? The police, for example, will almost certainly act on allegations of drug smuggling in your workplace – but they are much less likely to prosecute the use of unlicensed software (which can count as a “serious indictable offence” in Australian law). In such an instance, whistleblowers may find their disclosure protected, but at the same time not very effective.
In these cases, the best bet is for whistleblowers to go to a party which has the power and will to act upon their information. For example, an employee witnesses the use of unlicensed software by one department in their business. That usage would count as an infringement of copyright law on a commercial scale, not a personal one – meaning that the firm could not use confidentiality agreements or NDAs to gag their employee.
If the employee went to an organisation like the BSA | The Software Alliance – made up of software providers who have both an ethical and commercial case for protecting their licences – they would be willing and able to use the information to act against the firm. Though there is no clear legislation on this point, the decided cases mean that provided what is disclosed is indeed illegal activity, the firm could not use the employee’s contract to stop them from talking to the BSA, which has a very justifiable interest in righting the wrong that’s occurring.
Ultimately, whistleblowers should always exercise due diligence and caution before making any claims about their organisation. If you do see criminal activity, even “white-collar” crime in your organisation, make sure to gather enough hard evidence and reach out first to either the authorities or an interested third-party before any attempt to “go public”. Most of all, remember that Australian law and authorities will always do their utmost to protect your rights.
Sheryl Lee, Counsel – BSA APAC.
