May 18, 2017

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A Case For Reforming Whistleblower Laws In India And Australia

- Robert R Wyld, Partner [ Johnson Winter & Slattery Sydney, Australia ]

Robert R Wyld, Tom Burns

Law reform to provide greater protection to whistleblowers and to widen the range of people who qualify for such protection is currently being pursued in a range of jurisdictions. The authors of this article recently co-authored a submission to an Australian Parliamentary Committee considering whistleblower protection laws on behalf of the International Bar Association’s Anti-Corruption Committee.

Members of the Committee from Latin America, Europe, Africa, India, and Asia contributed to the submission and consistently commented on the need for greater whistleblower protection in their jurisdictions. Given the perceived need for reform in this area in various countries, it is worth considering why so many lawyers feel that there is a need for increased protection for whistleblowers. It appears that there is a need for change to whistleblowing laws for two major reasons: Social factors that make whistleblowers particularly vulnerable against governments and corporations, who, it appears, prefer to cover up problems rather than addressing them, and the relative lack of legislation in this area in many jurisdictions.

Social Factors

In Australia, like many countries, there is a culture wherein there is a reluctance to report wrongdoing (in Australian slang, a reluctance to “dob in a mate”). There is often a tendency to retaliate against whistleblowers rather than to deal with the alleged wrongdoing. This tendency can in part be explained by organizations acting in their own perceived self-interest. Where an organization believes that it would be less costly to “cover up” alleged wrongdoing and attack the whistleblower rather than to investigate a whistleblower’s claims and deal with the merits of the issue, it does not seem to hesitate to go on the front foot and attack those employees or others who challenge it. However, it is also likely that there are cultural factors at play.

Historically, there has often been a perception of whistleblowers as informants who report on their friends or colleagues to the state.2 A consequence of this perception is that whistleblowers have been viewed as facilitating abuses of power by the state rather than as acting to prevent them.3 This culture is not unique to Australia, and while the public’s perception of whistleblowers in many parts of the world has improved in recent years, the prevalence of these views goes some way to explain why practitioners in many jurisdictions perceive that there is a need for the law to provide greater protection to whistleblowers.

Legal Gaps

Another apparent reason why many legal practitioners believe that there is a need for law reform in this area has been the relative lack of robust legislation to protect whistleblowers in many jurisdictions at least until recent times. This has been particularly true in the private sector, as can be seen below in the discussion about the current state of law in India and Australia.


I n the Commonwealth public sector in Australia, whistleblower protection is provided by the Public Interest Disclosure Act, 2013 (Cth). The protection is broad. It is available to current and former public officials, and a whistleblower may disclose not only conduct that the government has engaged in but also conduct that government contractors have participated in.4 Misconduct is widely defined and need not amount to illegal conduct but could include other forms of misconduct,5 for example, falsifying scientific data.6 Generally disclosures are first required to be made internally.7 However, after an internal disclosure has been made and a whistleblower is not satisfied with the outcome of the investigation, then, in many circumstances, the whistleblower is permitted to make a disclosure to a third party such as the media.8 Finally, the Act also provides a wide range of protection to whistleblowers if retaliations are taken against them such as compensation, reinstatement if they are dismissed from their position as a result of their disclosure, and court-ordered apologies.9

In the private sector in Australia, protection for whistleblowers is much more limited. Protection is only available to current employees and officers (not former employees) of and suppliers of goods and services to the company about which the disclosure is made.10 Disclosures must be made internally within the company, to the company’s auditor or regulator (the Australian Securities and Investments Commission [ ASIC ]).11 There is no opportunity to make disclosures to a third party such as the media. In the private sector, there is also a requirement that a disclosure be made in good faith, which does not exist in the public sector.12 This requirement exposes potential whistleblowers to the risk that they may not be able to avail themselves of the limited protection available if it is found that they spoke out because of perceived self- interest or some ulterior motive. In other words, the focus turns away from the incriminating conduct to the morals or integrity of an individual whistleblower. There are also more limited remedies available to whistleblowers in the private sector. For example, there is no opportunity for a court-ordered apology to be made. It appears that little use has been made of whistleblower protection available in the private sector possibly because of the limited protection available.13 Any prospect of compensation to a whistleblower is remote as ASIC is often portrayed in the Australian media as doing little to support whistleblowers, and private litigation against a former employer (costly, time-consuming, and unpredictable) is the only avenue open to whistleblowers. Very few take this path against well-funded and aggressive companies who target the credibility of a whistleblower to limit their own liability.


In India, similar to Australia, there are different regimes for whistleblowers in public and private sectors. The Companies Act, 2013 provides protection to whistleblowers in the private sector in certain circumstances. The Whistleblowers Protection Act, 2011 is the principal act that provides protections to whistleblowers in the public sector. The protection afforded in the private sector is quite limited when compared to that available in the public sector. The Companies Act requires listed companies, companies that have accepted deposits from the public, or companies that have borrowed in excess of ` 50 crores to establish vigil mechanisms through which employees can report their concerns about conduct at a company. Requiring certain companies to establish internal reporting systems is an important step, but greater protection could be provided. Moreover, many companies are not subject to whistleblower protection requirements set out in the Companies Act because they do not meet the abovementioned criteria.

Law reform for Private Sector Whistleblowers

Both India and Australia have, at present, pursued separate systems for protecting whistleblowers in public and private sectors. This is in contrast to some other jurisdictions, such as the United Kingdom, that have whistleblower protection applicable across the public, corporate, and not-for-profit sectors. To some degree, having different protection available to public-sector and private-sector whistleblowers is understandable given the importance of maintaining the integrity of the public sector and expenditure of public funds. The public has an interest in ensuring that the public sector is transparent, law abiding, and not corrupt. Such interest is not as apparent in the private sector as in the public sector, but given the share of the economy that the private sector today comprises in Australia and India and the range of functions that it performs, there is still significant public interest in protecting the integrity of the private sector. One avenue for reform that could be considered in these countries would be to expand their public-sector whistleblower protection regimes to cover the private sector where appropriate.

However, in any event, it is clear that there is significant room to improve these laws in both countries. It is suggested that some of the minimum reforms that each country should explore include the following features:

  • consistency of broad protection across the public and private sectors;
  • protection should apply to any type of alleged offense or misconduct arising under any law, not limited to, for example, anti-corruption, tax, or revenue or misuse of public funds;
  • there should be no test of a whistleblower acting in “good faith”; rather, the test should be based on whether the whistleblower holds an honest belief (subjective) based on reasonable grounds (objective);
  • Australia and India should each establish a statutory office of the whistleblower to act as advocate of the whistleblower, similar to the model of the Office of the Whistleblower established by the United States Securities Exchange Commission;
  • while complaints should be encouraged to be made internally in the first instance, a whistleblower should have a statutory right to report, at any time, an offense or misconduct to a third-party regulator;
  • a statutory scheme for compensation should be established and administered by an independent office holder to ensure that losses a whistleblower suffers are properly compensated;
  • a statutory independent scheme for rewards should be established to incentivize whistleblowers to report any offense or misconduct and by which an independent office holder determines the reward, if any, applicable to circumstances (with an employer playing no role in the assessment of a reward); and
  • there should be clear, unambiguous criminal offenses (with material fines and/or imprisonment) penalizing any conduct whereby a corporation or an individual seeks to retaliate, discriminate against, or victimize a whistleblower.

The law should reflect the value that society places upon those who have courage to stand up and report or complain about improper or illegal conduct. They should not be persecuted, hounded, or victimized by angry employers or governments. Society values honesty, integrity, and transparency. These reforms would go a long way in enhancing transparency and behavioral changes across business and government in Australia and India and ensuring that the laws of Australia and India reflect what society demands from those holding positions of power and/or influence – honesty and integrity in all behavior.

1. Copyright 2017. The opinions expressed herein are those of the author and do not necessarily reflect the opinions of the firm or the firm’s clients.
2. Marek Arszutowicz and Wojciech W. Gasparski (Eds), Whistleblowing: In Defense of Proper Action, The International Annual of Practical Philosophy and Methodology, vol. 18. New Brunswick, NJ: Transaction Publishers.
3. Parliamentary Assembly of the Council of Europe (14 September 2009). Report on the Protection of Whistleblowers, Document 12006, Committee on Human Rights and Legal Affairs, para. 1. Available from X2H-Xref-ViewPDF.asp?FileID=12302&lang=en.
4. Public Interest Disclosure Act 2013 (Cth) s 26 &s 29(1)(c). There are similar laws in all Australian States and Territories covering the State and Territory public sector.
5. Ibid s 29.
6. Ibid.
7. Ibid s 26(1)(c).
8. Ibid.
9. Ibid s 14, 15 & 16.
10. Corporations Act 2001 (Cth), Pt 9.4AAA, s 1317AA(1).
11. Ibid.
12. Ibid.
13. Senate Economics References Committee, Commonwealth, Corporate whistle blowing in Australia: ending corporate Australia’s cultures of silence (2016) 31.

Disclaimer – The views expressed in this article are the personal views of the author and are purely informative in nature.

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