Whistleblower protections

Charities that are companies registered with the Australian Securities and Investments Commission (ASIC) and foreign, trading or financial corporations (which are particular types of entities under the Australian Constitution) must comply with the legislation.

An incorporated association may be considered a ‘trading or financial corporation’, depending on its circumstances.

Trading or financial corporations

Whether an incorporated association or other body corporate is a trading or financial corporation depends on its activities and circumstances.

While we cannot provide a definitive answer for all charities, we can provide general guidance.

Generally, a body will be a trading or financial corporation if its trading or financial activities are a significant proportion of its overall activities.

Trading activities involve buying and selling goods or services. Financial activities involve commercial dealings or transactions in finance, such as borrowing, lending or investing and providing advice on financial matters.

If a charity is unsure whether it is a ‘trading or financial corporation’, it should seek legal advice.

There will be some incorporated associations and other bodies corporate that fall within the definition of a trading or financial corporation. If they do fall within this definition, they will be subject to the whistleblower protection requirements in the Corporations Act.

Under the whistleblower protection legislation, an eligible whistleblower can be someone who is or was:

• an officer or employee of the charity
• an individual or an employee of a person that supplies services or goods to the entity (including volunteers)
• an individual who is an associate of the entity
• a relative or dependant of any of the above, or a dependant of the spouse of any of the above
• an individual prescribed by the Regulations as being an eligible whistleblower.

An eligible whistleblower can remain anonymous and still qualify for protection.

A whistleblower is entitled to protection under the Corporations Act if they make a qualifying disclosure to an eligible recipient.

A qualifying disclosure involves reporting conduct by a charity or an officer or employee of the charity that represents misconduct, an improper state of affairs or circumstances, or breach of the law. This can include conduct that:

• contravenes the Corporations Act, or the ASIC Act
• constitutes an offence against another Commonwealth law that is punishable by imprisonment for 12 months or more
• represents a danger to the public or the financial system, or
• is prescribed by the Regulations.

To qualify for protection, the whistleblower must have reasonable grounds to suspect that the information they will disclose indicates misconduct.

To qualify for protection, a whistleblower must make their disclosure to an eligible recipient:

• the Australian Securities and Investment Commission (ASIC)
• the Australian Prudential Regulatory Authority (APRA)
• a Commonwealth body nominated for this purpose in the Regulations (this does not include the ACNC)
• a legal practitioner, if someone is seeking legal advice about whether the protections will apply to them
• an officer or senior manager of the charity in question
• an auditor or member of the audit team for the charity
• an actuary of the charity (mainly relevant for banking, insurance, and superannuation entities)
• a person that the charity has authorised to receive a disclosure (this can include a person external to the charity).

Whistleblowers, or potential whistleblowers, can be compensated for any loss, damage, or injury they suffer. It is illegal to fire, harass or discriminate against a whistleblower or potential whistleblower because someone thinks they made a disclosure.

If a person breaches a whistleblower’s confidentiality or causes detriment to a whistleblower because of their disclosure, the person faces criminal or civil penalties.

Importantly, these penalties are not limited to situations with an actual disclosure. They extend to situations where the person merely believes or suspects someone made or could have made a disclosure.

For more, see the guidance on the protections available to whistleblowers and the penalties for an entity failing to provide these protections on the ASIC website.

If a whistleblower of a charity wants protection, or is concerned about possible harm as a result of making a disclosure, they must raise their concerns with an eligible recipient. It is important to remember that the ACNC is not an eligible recipient.

A whistleblower of a charity who wants to access the protections or fears harm can report to both an eligible recipient and the ACNC, though they are only covered by the protections from when they report to an eligible recipient.

Generally, if someone makes a disclosure about a charity to ASIC, ASIC will recommend the whistleblower also contact the ACNC. ASIC may also release information to the ACNC itself. ASIC will generally obtain the consent of the whistleblower to do this.

To make a complaint about a charity registered with the ACNC, read about what the ACNC can investigate, then complete our online raise a concern form.

The Taxation Administration Act 1953 (Cth) also contains protections for whistleblowers reporting misconduct related to tax.

The ACNC encourages charities assess their own risks. For more, see the guidance on whistleblower protections on the ATO’s website.