Treasury Laws Amendment (Enhancing Whistleblower Protections) Act 2019 (10 of 2019)

Schedule 1   Amendments

Part 2   Amendment of the Taxation Administration Act 1953

Taxation Administration Act 1953

15   After Part IVC

Insert:

Part IVD - Protection for whistleblowers

14ZZT Disclosures qualifying for protection under this Part

(1) A disclosure of information by an individual (the discloser ) qualifies for protection under this Part if:

(a) the discloser is an eligible whistleblower in relation to an entity (within the meaning of the Income Tax Assessment Act 1997); and

(b) the disclosure is made to the Commissioner; and

(c) the discloser considers that the information may assist the Commissioner to perform his or her functions or duties under a taxation law in relation to the entity or an associate (within the meaning of section 318 of the Income Tax Assessment Act 1936) of the entity.

(2) A disclosure of information by an individual (the discloser ) qualifies for protection under this Part if:

(a) the discloser is an eligible whistleblower in relation to an entity (within the meaning of the Income Tax Assessment Act 1997); and

(b) the disclosure is made to an eligible recipient in relation to the entity; and

(c) the discloser has reasonable grounds to suspect that the information indicates misconduct, or an improper state of affairs or circumstances, in relation to the tax affairs of the entity or an associate (within the meaning of section 318 of the Income Tax Assessment Act 1936) of the entity; and

(d) the discloser considers that the information may assist the eligible recipient to perform functions or duties in relation to the tax affairs of the entity or an associate (within the meaning of section 318 of the Income Tax Assessment Act 1936) of the entity.

(3) A disclosure of information by an individual qualifies for protection under this Part if the disclosure is made to a legal practitioner for the purpose of obtaining legal advice or legal representation in relation to the operation of this Part.

(4) In this section:

tax affairs means affairs relating to any tax imposed by or under, or assessed or collected under, a law administered by the Commissioner.

Note: There is no requirement for a discloser to identify himself or herself in order for a disclosure to qualify for protection under this Part.

14ZZU Eligible whistleblowers

An individual is an eligible whistleblower in relation to an entity (within the meaning of the Income Tax Assessment Act 1997) if the individual is, or has been, any of the following:

(a) an officer (within the meaning of the Corporations Act 2001) of the entity;

(b) an employee of the entity;

(c) an individual who supplies services or goods to the entity (whether paid or unpaid);

(d) an employee of a person that supplies services or goods to the entity (whether paid or unpaid);

(e) an individual who is an associate (within the meaning of section 318 of the Income Tax Assessment Act 1936) of the entity;

(f) a spouse or child of an individual referred to in any of paragraphs (a) to (e);

(g) a dependant of an individual referred to in any of paragraphs (a) to (e), or of such an individual's spouse;

(h) an individual prescribed by the regulations for the purposes of this paragraph in relation to the entity.

14ZZV Eligible recipients

(1) Each of the following is an eligible recipient in relation to an entity (within the meaning of the Income Tax Assessment Act 1997):

(a) an auditor, or a member of an audit team conducting an audit, of the entity;

(b) a registered tax agent or BAS agent (within the meaning of the Tax Agent Services Act 2009) who provides tax agent services (within the meaning of that Act) or BAS services (within the meaning of that Act) to the entity;

(c) a person authorised by the entity to receive disclosures that may qualify for protection under this Part;

(d) a person or body prescribed for the purposes of this paragraph in relation to the entity.

(2) If the entity is a body corporate, each of the following is an eligible recipient in relation to the entity:

(a) a director, secretary or senior manager (within the meaning of the Corporations Act 2001) of the body corporate;

(b) any other employee or officer (within the meaning of the Corporations Act 2001) of the body corporate who has functions or duties that relate to the tax affairs (within the meaning of section 14ZZT) of the body corporate.

(3) If the entity is a trust, each of the following is an eligible recipient in relation to the entity:

(a) a trustee of the trust;

(b) a person authorised by a trustee of the trust to receive disclosures that may qualify for protection under this Part.

(4) If the entity is a partnership, each of the following is an eligible recipient in relation to the entity:

(a) a partner in the partnership;

(b) a person authorised by a partner in the partnership to receive disclosures that may qualify for protection under this Part.

(5) Subsections (1), (2), (3) and (4) do not limit each other.

14ZZW Confidentiality of whistleblower's identity

(1) A person (the first person ) commits an offence if:

(a) another person (the discloser ) makes a disclosure of information (the qualifying disclosure ) that qualifies for protection under this Part; and

(b) the first person discloses any of the following (the confidential information ):

(i) the identity of the discloser;

(ii) information that is likely to lead to the identification of the discloser; and

(c) the confidential information is information that the first person obtained directly or indirectly because of the qualifying disclosure; and

(d) the disclosure referred to in paragraph (b) is not authorised under subsection (2).

Penalty: Imprisonment for 6 months or 30 penalty units, or both.

(2) A disclosure referred to in paragraph (1)(b) is authorised under this subsection if it:

(a) is made to the Commissioner; or

(b) is made to a member of the Australian Federal Police (within the meaning of the Australian Federal Police Act 1979); or

(c) is made to a legal practitioner for the purpose of obtaining legal advice or legal representation in relation to the operation of this Part; or

(d) is made to a person or body prescribed by the regulations for the purposes of this paragraph; or

(e) is made with the consent of the discloser.

(3) Subsection (1) does not apply if:

(a) the disclosure referred to in paragraph (1)(b):

(i) is not of the identity of the discloser; and

(ii) is reasonably necessary for the purposes of investigating misconduct, or an improper state of affairs or circumstances, to which the qualifying disclosure relates; and

(b) the first person takes all reasonable steps to reduce the risk that the discloser will be identified as a result of the disclosure referred to in paragraph (1)(b).

Note: A defendant bears an evidential burden in relation to the matter in subsection (3): see subsection 13.3(3) of the Criminal Code.

14ZZX Disclosure that qualifies for protection not actionable etc.

(1) If a person makes a disclosure that qualifies for protection under this Part:

(a) the person is not subject to any civil, criminal or administrative liability (including disciplinary action) for making the disclosure; and

(b) no contractual or other remedy may be enforced, and no contractual or other right may be exercised, against the person on the basis of the disclosure; and

(c) if the disclosure was a disclosure of information to the Commissioner - the information is not admissible in evidence against the person in criminal proceedings or in proceedings for the imposition of a penalty, other than proceedings in respect of the falsity of the information.

Note: Except as provided for by paragraph (c), this subsection does not prevent the person being subject to any civil, criminal or administrative liability for conduct of the person that is revealed by the disclosure.

(2) Without limiting subsection (1):

(a) the person has qualified privilege in respect of the disclosure; and

(b) a contract to which the person is a party may not be terminated on the basis that the disclosure constitutes a breach of the contract.

14ZZY Victimisation prohibited

Actually causing detriment to another person

(1) A person (the first person ) commits an offence if:

(a) the first person engages in conduct; and

(b) the first person's conduct causes any detriment to another person (the second person ); and

(c) when the first person engages in the conduct, the first person believes or suspects that the second person or any other person made, may have made, proposes to make or could make a disclosure that qualifies for protection under this Part; and

(d) the belief or suspicion referred to in paragraph (c) is the reason, or part of the reason, for the conduct.

Penalty: Imprisonment for 2 years or 120 penalty units, or both.

Threatening to cause detriment to another person

(2) A person (the first person ) commits an offence if:

(a) the first person makes to another person (the second person ) a threat to cause any detriment to the second person or to a third person; and

(b) the first person:

(i) intends the second person to fear that the threat will be carried out; or

(ii) is reckless as to causing the second person to fear that the threat will be carried out; and

(c) the first person makes the threat because a person:

(i) makes a disclosure that qualifies for protection under this Part; or

(ii) may make a disclosure that would qualify for protection under this Part.

Penalty: Imprisonment for 2 years or 120 penalty units, or both.

Threats

(3) For the purposes of subsection (2), a threat may be:

(a) express or implied; or

(b) conditional or unconditional.

(4) In a prosecution for an offence against subsection (2), it is not necessary to prove that the person threatened actually feared that the threat would be carried out.

14ZZZ Compensation and other remedies - circumstances in which an order may be made

(1) A court may make an order under section 14ZZZA in relation to a person (the first person ) if:

(a) the first person engages in conduct ( detrimental conduct ) that:

(i) causes any detriment to another person (the second person ); or

(ii) constitutes the making of a threat to cause any such detriment to another person (the second person ); and

(b) when the first person engages in the detrimental conduct, the first person believes or suspects that the second person or any other person made, may have made, proposes to make or could make a disclosure that qualifies for protection under this Part; and

(c) the belief or suspicion referred to in paragraph (b) is the reason, or part of the reason, for the detrimental conduct.

(2) A court may make an order under section 14ZZZA in relation to a person (the first person ) if:

(a) the first person is or was an officer (within the meaning of the Corporations Act 2001) or employee of a body corporate; and

(b) paragraphs (1)(a), (b) and (c) of this section apply to the body corporate because of detrimental conduct engaged in by the body corporate; and

(c) the first person:

(i) aided, abetted, counselled or procured the detrimental conduct; or

(ii) induced, whether by threats or promises or otherwise, the detrimental conduct; or

(iii) was in any way, by act or omission, directly or indirectly, knowingly concerned in, or party to, the detrimental conduct; or

(iv) conspired with others to effect the detrimental conduct.

(2A) A court may make an order under section 14ZZZA in relation to a person (the first person ) that is a body corporate if:

(a) another person (the third person ) engages in conduct ( detrimental conduct ) that:

(i) causes any detriment to a person (the second person ) other than the first person or the third person; or

(ii) constitutes the making of a threat to cause any such detriment to a person (the second person ) other than the first person or the third person; and

(b) when the third person engages in the detrimental conduct, the third person believes or suspects that the second person or any other person made, may have made, proposes to make or could make a disclosure that qualifies for protection under this Part; and

(c) the belief or suspicion referred to in paragraph (b) is the reason, or part of the reason, for the detrimental conduct; and

(d) the first person is under a duty to prevent the third person engaging in the detrimental conduct, or a duty to take reasonable steps to ensure that the third person does not engage in the detrimental conduct; and

(e) the first person fails in part or whole to fulfil that duty.

Burden of proof

(2B) In proceedings where a person seeks an order under section 14ZZZA in relation to another person:

(a) the person seeking the order bears the onus of adducing or pointing to evidence that suggests a reasonable possibility of the matters in:

(i) if subsection (1) of this section applies - paragraph (1)(a); or

(ii) if subsection (2) of this section applies - paragraph (1)(a), as mentioned in paragraph (2)(b); or

(iii) if subsection (2A) of this section applies - paragraphs (2A)(a) and (d); and

(b) if that onus is discharged - the other person bears the onus of proving that the claim is not made out.

Threats

(3) For the purposes of this section, a threat may be:

(a) express or implied; or

(b) conditional or unconditional.

(4) In proceedings for the purposes of section 14ZZZA, it is not necessary to prove that the person threatened actually feared that the threat would be carried out.

14ZZZAA Detriment

In sections 14ZZY and 14ZZZ, detriment includes (without limitation) any of the following:

(a) dismissal of an employee;

(b) injury of an employee in his or her employment;

(c) alteration of an employee's position or duties to his or her disadvantage;

(d) discrimination between an employee and other employees of the same employer;

(e) harassment or intimidation of a person;

(f) harm or injury to a person, including psychological harm;

(g) damage to a person's property;

(h) damage to a person's reputation;

(i) damage to a person's business or financial position;

(j) any other damage to a person.

14ZZZA Compensation and other remedies - orders that may be made

(1) For the purposes of subsections 14ZZZ(1), (2) and (2A), a court may make any of the following orders:

(a) an order requiring the first person to compensate the second person, or any other person, for loss, damage or injury suffered as a result of the detrimental conduct;

(b) if the court is satisfied that the first person engaged in the detrimental conduct in connection with the first person's position as an employee:

(i) an order requiring the first person to compensate the second person, or any other person, for a part of loss, damage or injury as a result of the detrimental conduct, and an order requiring the first person's employer to compensate the second person, or any other person, for a part of loss, damage or injury as a result of the detrimental conduct; or

(ii) an order requiring the first person and the first person's employer jointly to compensate the second person, or any other person, for loss, damage or injury suffered as a result of the detrimental conduct; or

(iii) an order requiring the first person's employer to compensate the second person, or any other person, for loss, damage or injury as a result of the detrimental conduct;

(c) an order granting an injunction, on such terms as the court thinks appropriate, to prevent, stop or remedy the effects of the detrimental conduct;

(d) an order requiring the first person to apologise to the second person, or any other person, for engaging in the detrimental conduct;

(e) if the second person is or was employed in a particular position and the detrimental conduct wholly or partly consists, or consisted, of the termination, or purported termination, of the second person's employment - an order that the second person be reinstated in that position or a position at a comparable level;

(f) if the court thinks it is appropriate - an order requiring the first person to pay exemplary damages to the second person, or any other person;

(g) any other order the court thinks appropriate.

(2) If the detrimental conduct wholly or partly consists, or consisted, of terminating or purporting to terminate a person's employment (including detrimental conduct that forces or forced the person to resign), the court must, in making an order mentioned in paragraph (1)(a) or (b), consider the period, if any, the person is likely to be without employment as a result of the detrimental conduct. This subsection does not limit any other matter the court may consider.

(3) In deciding whether to make an order under paragraph (1)(b) in relation to the first person's employer, the court may have regard to the following:

(a) whether the employer took reasonable precautions, and exercised due diligence, to avoid the detrimental conduct;

(b) if the employer has a policy dealing with any or all of the matters referred to in subsection 1317AI(5) of the Corporations Act 2001 (whether or not section 1317AI of that Act requires the employer to have such a policy) - the extent to which the employer gave effect to that policy;

(c) any duty that the employer was under to prevent the detrimental conduct, or to take reasonable steps to ensure that the detrimental conduct was not engaged in.

(4) If the court makes an order under subparagraph (1)(b)(ii), the first person and the first person's employer are jointly and severally liable to pay the compensation concerned.

14ZZZB Identifying information not to be disclosed etc. to courts or tribunals

If a person (the discloser ) makes a disclosure of information that qualifies for protection under this Part, the discloser or any other person is not to be required:

(a) to disclose to a court or tribunal:

(i) the identity of the discloser; or

(ii) information that is likely to lead to the identification of the discloser; or

(b) to produce to a court or tribunal a document containing:

(i) the identity of the discloser; or

(ii) information that is likely to lead to the identification of the discloser;

except where:

(c) it is necessary to do so for the purposes of giving effect to this Part; or

(d) the court or tribunal thinks it necessary in the interests of justice to do so.

Note: A discloser may also be able to apply to the court or tribunal, in accordance with the rules of the court or tribunal, for an order protecting the discloser's identity.

14ZZZC Costs only if proceedings instituted vexatiously etc.

(1) This section applies to a proceeding (including an appeal) in a court in relation to a matter arising under section 14ZZZA in which a person (the claimant ) is seeking an order under subsection 14ZZZA(1).

(2) The claimant must not be ordered by the court to pay costs incurred by another party to the proceedings, except in accordance with subsection (3) of this section.

(3) The claimant may be ordered to pay the costs only if:

(a) the court is satisfied that the claimant instituted the proceedings vexatiously or without reasonable cause; or

(b) the court is satisfied that the claimant's unreasonable act or omission caused the other party to incur the costs.

14ZZZD Interaction between civil proceedings and criminal offences

To avoid doubt, a person may bring civil proceedings under section 14ZZZA in relation to conduct even if a prosecution for a criminal offence against section 14ZZY in relation to the conduct has not been brought, or cannot be brought.

14ZZZE Compensation for acquisition of property

(1) If the operation of this Part would result in an acquisition of property (within the meaning of paragraph 51(xxxi) of the Constitution) from a person otherwise than on just terms (within the meaning of that paragraph), the Commonwealth is liable to pay a reasonable amount of compensation to the person.

(2) If the Commonwealth and the person do not agree on the amount of the compensation, the person may institute proceedings in the Federal Court of Australia or the Supreme Court of a State or Territory for the recovery from the Commonwealth of such reasonable amount of compensation as the court determines.

(3) Payments under this section are to be made out of money appropriated by the Parliament by another Act.

(4) To avoid doubt, section 16 does not apply to a payment under this section.