ASIC issues relief for smaller not-for-profits from whistleblower requirements
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Amendments were made to the Corporations Act 2001 (Cth) earlier this year to strengthen the protection offered to whistleblowers, with the introduction of a mandatory requirement for certain companies (including all public companies) to have a whistleblowing policy in place by 1 January.
The use of a ‘public company limited by guarantee’ structure is common by many not-for-profits and charities, who were consequently captured by the new mandatory policy requirement given their public nature (whether or not the company had any actual employees).
Acknowledging the disproportionate burden on companies that are small not-for-profits or charities (many of which have limited staff and financial resources), ASIC has exercised its regulatory power to grant relief to a specified class of entity from the requirement to have a whistleblower policy.
Through ASIC Corporations (Whistleblower Policies) Instrument 2009/1146 made on 13 November 2019 (Instrument), ASIC has relieved companies limited by guarantee that operate on a not-for-profit basis from the policy requirement, for so long as the company’s consolidated revenue each financial year is less than $1 million.
Once a not-for-profit company’s consolidated revenue is $1 million or more, the company must have a whistleblower policy, regardless of whether or not a future financial year’s revenue drops back below $1 million. However, the Instrument allows a transitional compliance period for not-for-profits when they come out of the exemption category, allowing a six month window after the financial year their exemption ends to adopt a whistleblower policy.
If you are interested in discussing how the new whistleblower policy requirements affect your organisation, or your not-for-profit organisation is looking to take advantage of the relief granted by the Instrument, please contact a member of our Employment, Safety and Migration or Not for profit teams.
The information contained in this article is general in nature and cannot be relied on as legal advice nor does it create an engagement. Please contact one of our lawyers listed above for advice about your specific situation.
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ASIC issues relief for smaller not-for-profits from whistleblower requirements
Amendments were made to the Corporations Act 2001 (Cth) earlier this year to strengthen the protection offered to whistleblowers, with the introduction of a mandatory requirement for certain companies (including all public companies) to have a whistleblowing policy in place by 1 January.
The use of a ‘public company limited by guarantee’ structure is common by many not-for-profits and charities, who were consequently captured by the new mandatory policy requirement given their public nature (whether or not the company had any actual employees).
Acknowledging the disproportionate burden on companies that are small not-for-profits or charities (many of which have limited staff and financial resources), ASIC has exercised its regulatory power to grant relief to a specified class of entity from the requirement to have a whistleblower policy.
Through ASIC Corporations (Whistleblower Policies) Instrument 2009/1146 made on 13 November 2019 (Instrument), ASIC has relieved companies limited by guarantee that operate on a not-for-profit basis from the policy requirement, for so long as the company’s consolidated revenue each financial year is less than $1 million.
Once a not-for-profit company’s consolidated revenue is $1 million or more, the company must have a whistleblower policy, regardless of whether or not a future financial year’s revenue drops back below $1 million. However, the Instrument allows a transitional compliance period for not-for-profits when they come out of the exemption category, allowing a six month window after the financial year their exemption ends to adopt a whistleblower policy.
If you are interested in discussing how the new whistleblower policy requirements affect your organisation, or your not-for-profit organisation is looking to take advantage of the relief granted by the Instrument, please contact a member of our Employment, Safety and Migration or Not for profit teams.