TerraCom has been ordered by the Federal Court of Australia to pay an AUD7.5 million civil penalty for retaliating against a whistleblower in proceedings commenced by the Australian Securities & Investments Commission (ASIC). Australia’s whistleblower protection regime was strengthened in 2018 in the Corporations Act 2001 (Cth). The threshold to establish detrimental conduct against a whistleblower was lowered, and civil penalties for non-compliance were introduced. This is the first enforcement action taken by ASIC since the changes came into effect, and will likely set a precedent for penalties applied in future cases.
The penalty serves as a reminder to companies to put whistleblower policies in place, ensure careful compliance with those policies, and avoid engaging in conduct that could be seen as harmful to whistleblowers.
We previously published an article on these proceedings which discussed the risk of waiving privilege when making public disclosures: Waving goodbye to privilege with public disclosures | A&O Shearman - JDSupra.
During his employment in July 2019 as Commercial General Manager of ASX-listed mining company TerraCom, Justin Williams raised concerns to the company’s executives that coal quality testing results were being falsified. In August 2019, Mr Williams was told he was being made redundant and was dismissed. Over the course of 2020, TerraCom published two ASX announcements and a letter to shareholders that referred to Mr...
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