What the cross-bench whistleblower deal means for the public sector

By Stephen Easton

Wednesday November 23, 2016

This week’s late-night legislation session not only created a new union regulator, the Registered Organisations Commission, it also comes with a landmark government agreement to strengthen whistleblower protection laws across the board, including in the public sector.

Cross-bench senators Derryn Hinch and Nick Xenophon voted for the bill on the condition it included a set of strong legal protections for whistleblowers making allegations against unions that would later be applied to other sectors as well.

Nick Xenophon

The whistleblower provisions make a wide range of people eligible for protected disclosure status, and allow for a range of legal remedies if harm is suffered as a result, including reinstatement of employment, injunctions, apologies, compensation and even the possibility of bounties or rewards for information.

The government has agreed in writing to hold a parliamentary inquiry to report by the end of next June on the whistleblower protections in the new law, “with the objective of implementing the substance and detail of those amendments to achieve an equal or better whistleblower protection and compensation regime in the corporate and public sectors”.

The biggest impact of the agreement will be in the non-profit and private sector organisations, which will go from having whistleblower protection laws among the weakest in the world to some of the strongest, according to Hinch and Xenophon.

Even though the public sector is streets ahead of the rest in this regard, the agreement might still create a more encouraging environment for exposure of wrongdoing inside government.

” … they reported wrongdoing, and they ended up coming off second best as a result of it, through no fault of their own.”

Depending on how the inquiry goes, the Commonwealth Public Interest Disclosure Act could be amended to expand the circumstances in which whistleblowers are likely to receive compensation, or increase the range of potential remedies for harm that result from making a disclosure, for example. State and territory governments would look closely at whatever transpires and might be guided by the federal act when their own equivalent legislation is next in line for more reform.

The government has pledged to hold the inquiry and establish an expert advisory panel to quickly come up with legislation containing “enhancements to whistleblower protections” for the corporate and public sectors. It agreed to introduce that legislation to parliament by December, 2017 and support it in a parliamentary vote that will be held by the end of June, 2018.

“The changes will include, for the first time, a broadening of the definition of what a reprisal action is, and mechanisms to make clear the level of harm to individuals — much broader than the current public interest disclosure legislation across Australia, which has proven to be woefully inadequate in respect of this,” Xenophon told the Senate.

“It will also include, for the first time, a mechanism for civil compensation based on common law principles, which is broader than anything that has ever been done before in this country.”

Public sector whistleblower reform already brewing

AJ Brown
AJ Brown

The federal government is also currently considering the report from a review of the Commonwealth PID Act by former law enforcement integrity commissioner Philip Moss. It broadly recommends narrowing its scope to exclude one-off, personal workplace grievances but also stronger protection for people making disclosures.

The agreement with Hinch and Xenophon is likely to push federal PID Act reform beyond what Moss recommended, particularly in the area of compensation rights, according to public policy professor AJ Brown, who heads the Public Integrity and Anti-Corruption program at Griffith University’s Centre for Governance and Public Policy.

Brown advised Xenophon and helped drafted the amendments he and Hinch successfully inserted into the legislation, earning strong praise from the South Australian senator.

“He is the pre-eminent expert on whistleblower laws in this country,” Xenophon told his colleagues. “He has published many papers, made many submissions, and undertaken extensive research on the whole issue of whistleblowers, and I think knows more about this issue than anyone else in the country.”

Brown told The Mandarin that extending the new protections for union whistleblowers to the public and private sectors should “help ensure the good things recommended by Philip Moss get moved on” but also open the door to more changes that go even further.

Even if the Moss recommendations were all carried through, Brown says the PID Act would still be “defective” in some ways, “including the level of restriction that it contains on when whistleblowers can go the media”. He hopes “new, simpler solutions” that work in all sectors will emerge from the inquiry.

And while the Commonwealth’s agreement to extend the new stronger legal protection to “the public sector” cannot apply to the state and territory PID legislation that covers public sector whistleblowing, Brown thinks it will set a new standard.

“On key issues, the direction of reform (especially on the compensation rights, and possibly things like bounties) will likely set a whole new standard which the states will then sooner or later have to copy,” he said by email. “We should also try and make sure the inquiry does have a think about the inter-jurisdictional issues.”

The massive collaborative Whistling While They Work research project, led by Brown, has also just reported new results. As expected, the survey clearly reflects the lack of any comprehensive framework to legitimise and encourage public interest disclosures from within the private and not-for-profit sectors.

The survey also shows support and protection for whistleblowers is the weakest area for the public sector organisations, supporting the Moss review’s call for improvements in the same capacity. Brown told The Mandarin he thinks Moss broadly got it right on the federal PID Act review, but failed to address what he sees as one of its key flaws.

Moss noted the experience of becoming a whistleblower under the federal PID Act was “not a happy one” but didn’t agree with Brown’s argument that whistleblowers should have a right to claim compensation for disadvantage they suffer, separately from a criminal offence of reprisal against them being proven or negligence on the part of the employer.

“It’s just [for when] the person did the right thing; they basically followed the procedures or acted reasonably, they reported wrongdoing, and they ended up coming off second best as a result of it, through no fault of their own,” explained Brown.

“They should be entitled to be put back in the position that they were in.”

Brown thinks this “compensable duty of care” for disadvantage to whistleblowers — regardless of proving someone or the organisation did wrong thing — is the main defect in public sector PID schemes all over Australia, but he thinks the Xenophon-Hinch agreement is definitely a step in the right direction.

When next year’s inquiry considers the amendments he drafted to protect union whistleblowers and how to put in place “an equal or better whistleblower protection and compensation regime” for Commonwealth public servants, one issue it will consider is:

“The definition of detrimental action and reprisal and the interaction between criminal and civil liability.”

The changes for the public sector won’t be anywhere near as dramatic as whatever the result is for private enterprise and not-for-profit organisations. But a likely result is that whistleblowers in the orbit of the federal government who suffer as a result of speaking out will have more chance of receiving compensation, and states and territories will be watching.

“There is some way to go but this is a big shift,” said Brown.

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