Whistleblower Sues Former Employer over Unfair Dismissal
Wednesday 6 August 2014 @ 9.54 a.m. | Corporate & Regulatory | Industrial Law
A sacked whistleblower has launched a $900,000 unfair dismissal claim against his former employer, Pepperstone Financial. The matter is scheduled to appear before the Federal Court.
Background
Joel Murphy, a broker, was head of sales at the foreign exchange company Pepperstone Financial when he alleged that he became aware of suspicious trading by two clients, NAB employee Lukas Kamsay and ABS employee Christopher Hill. Murphy was fired from his position shortly after alerting the Australian Securities and Investments Commission (ASIC) to the $7 million dollar scandal. The official reason given for the termination of his contract was due to “global FX market volatility being at record lows…and the entire FX trading market contracting.”
The tip-off to ASIC about Kamay and Hill led to a sting operation by the Australian Federal Police and blew open one of the biggest insider trading cases in Australian history. Kamay and Hill have been charged with serious offences, including insider trading and money laundering, with a committal mention due in the Melbourne Magistrates Court later this month.
Murphy’s employment was terminated on the same day news broke of the scandal. He claims that it was his reporting to ASIC of the scandal that lead to his termination. He is currently suing his former employee for a total of $904,779 based on bonuses he says he was owed for the period.
Whistleblower Protection Law
Murphy is claiming that his complaint to ASIC about the scandal falls under whistleblower protection laws currently prescribed by the Corporations Act 2001 (Cth). The substance of the act basically forbids an employee from being sacked on the basis of disclosure.
Professor of Law at Melbourne University, Mr Ian Ramsay, describes the current Australian system as providing modest protection to whistleblowers. He explains that these allegations are not too common given the limited protection we offer to current whistleblowers:
“There’s not a great deal of these sort of claims in Australia, that’s not to say it doesn’t have merit...The laws in other countries provide greater protection for whistleblowers than we see in Australia so there is a growing sense that our laws need an overhaul to provide protection for whistleblowers.”
Senate Committee ASIC Recommendations
The recent Senate Committee Report released on 26 June recommends a number of major reforms to the regulation, protection and reward of whistleblowers in Australia. The report was described as a fundamental shift in approach to corporate law enforcement.
The committee supported the establishment of an “Office of the Whisteblower” as a specialist office within ASIC. The committee further recommended that protection should be extended to anonymous whistleblowers and that the current ‘good faith’ requirement be removed from the provisions of the Act.
The most significant recommendation introduced by the committee was the exploration of options to incentivise whistleblowers in Australia through a reward-based system similar to the ones currently implemented in the United States. With no incentive system in operation in Australia, the current regime is largely focused around protection legislation.
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