In September, we reported that the types of organisations that must comply with whistleblower protection laws under the Corporations Act 2001 (the Act) have been widened, with effect from 1 January 2020.

There are now two types of not-for-profit (incorporated) legal structures that are covered by the Act.

1. Companies limited by guarantee: these companies fall within the definition of 'public companies' so are covered. Companies limited by guarantee are the most common type of company structure used by not-for-profits.
2. Trading or financial corporations: this will depend on whether your organisation’s trading or financial activities make up a significant proportion of their overall activities. These include incorporated associations registered with ASIC as Registered Australian Bodies. If you are not sure whether your organisation is a trading or financial corporation, refer to ASIC’s guide.

Tip! If you not sure what your legal structure is, search the organisation name (or its ABN) on ABN Look Up.

The reforms also require public companies (including those registered as charities with the Australian Charities and Not-for-profits Commission (ACNC)), large proprietary companies and corporate trustees of superannuation funds to have a whistleblower policy from 1 January 2020.

In response to this new policy requirement, more than 20 submissions were made to the Australian Securities & Investments Commission (ASIC). We supported the Law Council of Australia's submission seeking an exemption for all companies limited by guarantee registered as charities with the ACNC because we felt the requirement to have a whistleblower policy places an unreasonable regulatory burden on these organisations.

In a partial advocacy win, the requirements were changed and not-for-profits and charities with an annual consolidated revenue of less than $1 million are not required to have a whistleblower policy unless they are trading or financial corporations. This was made law under Instrument 2019/1146. ASIC has published an Explanatory Statement on this change.

But, the best way to demonstrate compliance may still be to have a whistleblower policy. ASIC has published a guide about whistleblower policies (Regulatory Guide 270) (Warning: it's long and not drafted with not-for-profits in mind!)

Under the Act, a whistleblower policy must include information about:

• protections available to whistleblowers
• how and to who the whistleblower may make the disclosure
• how the company will support whistleblowers and protect them from detriment
• how the company will investigate disclosures
• how the company will make sure employees mentioned in disclosures, or related to disclosures, will be fairly treated, and
• how the policy will be made available to officers and employees

You might need legal advice on your particular situation. We are developing some resources to help you better understand your organisation's obligations, including a template policy. We expect to publish these early in the new year - we'll keep you posted!

Not-for-profits and charities with revenue of more than $1 million will need to have a policy in place by 1 January 2020. We know that many charities will be helping people who face issues like poverty, domestic violence and bush fires over the Christmas and new year season. We hope that ASIC will be cognisant of the fact that charities will be dealing with these seasonal challenges and take a reasonable approach to legal compliance by this deadline.