Australia: Federal Court finds new whistleblower protections will not apply to detrimental conduct occurring before the commencement date of 1 July 2019

On 1 July 2019, the amended form of Part 9.4AAA of the Corporations Act 2001 (Cth) (Corporations Act), which sought to provide whistleblowers with greater protection than its predecessor, came into force. These amendments also repealed the specific whistleblowing protections in the Banking Act 1959 (Cth), Insurance Act 1973 (Cth), Life Insurance Act 1995 (Cth) and the Superannuation Industry (Supervision) Act 1993 (Cth) and consolidated those protections into Part 9.4AAA of the Corporations Act.

On 11 December 2020, the Federal Court in Alexiou v Australia and New Zealand Banking Group Limited [2020] FCA 1777 handed down the first judgment considering the operation of the “new” whistleblowing amendments.

The Federal Court in this case confirmed that sections 1317AD and 1317AE, will not apply to detrimental conduct which occurred before the commencement date (being 1 July 2019). Sections 1317AD and 1317AE of the Corporations Act govern the orders which a Court can make where a person suffers detriment having made a protected disclosure.

The applicant, Mr Alexiou, contended that he was terminated from his employment by ANZ for making several disclosures to ANZ management and sought compensation orders pursuant to section 1317AE(1). Under section 1644(2) of the Corporations Act, this provision provides that sections 1317AC, 1317AD and 1317AE also apply at and after 1 July 2019 in relation to those disclosures which are made before 1 July 2019 and which would have been protected by Part 9.4AAA if the relevant amendments were in force when the disclosure was made. On Mr Alexiou’s pleaded case, the disclosures made by him met the preconditions in section 1644(2), and thereby enlivening the provision.

However, ANZ's alleged detrimental conduct being the termination of Mr Alexiou's employment occurred before the commencement date. A question therefore arose as to whether section 1644(2) should be interpreted so as to allow sections 1317AD and 1317AE to apply to detrimental conduct occurring before the amendments came into force on 1 July 2019.

The Court ultimately found in favour of ANZ. The Court concluded that while section 1644(2) operates to allow sections 1317AD and 1317AE to apply to those disclosures made before 1 July 2019, those provisions do not have retrospective application. In other words, these provisions apply prospectively but their effect is widened in respect of disclosures made before the commencement date.

Practically speaking this means that where a disclosure made prior to 1 July 2019 qualifies for protection under the new whistleblowing regime, a remedy can only be sought by the person having suffered from detrimental conduct where such detrimental conduct is said to have occurred on or after 1 July 2019 (but not before that date).

• Remedy can be sought under the new whistleblowing protections where (1) the disclosure made prior to 1 July 2019 qualifies for protection under the Corporations Act; and (2) the detriment suffered takes effect on or after 1 July 2019
• Remedy cannot be sought under the new whistleblowing protections where (1) the disclosure made prior to 1 July 2019 qualifies for protection under the Corporations Act; and (2) the detriment suffered took effect prior to 1 July 2019

Based on the coverage in the media, it appears that Mr Alexiou will not appeal the judgment but will seek to rely on the whistleblowing protections in the Banking Act 1959 (Cth) as they existed prior to the commencement of the new whistleblowing protections.

This article was written by Shivchand Jhinku, Partner; James Banh, Solicitor and Rose Kethel, Vacation Clerk.

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