The risks and protections for whistleblowers
The Protected Disclosures Act 2000 protects a whistleblower in certain circumstances but beware of bad faith, writes Dan Moore.
FORMER NATIONAL Security Agency contractor Edward Snowden and others have put the spotlight on whistleblowing as a global phenomenon, by exposing government secrets. But whistleblowing also occurs in the private sector and it can cause significant costs for businesses.
In New Zealand we have the Protected Disclosures Act 2000 which protects a whistleblower in certain circumstances. The act applies to both the public and private sector and has two purposes: It’s there to facilitate disclosure and the investigation of serious wrongdoing in organisations; and to protect employees who ‘‘blow the whistle’’.
The scope of the act is wide. An ‘‘organisation’’ is not only a limited liability company, it also extends to a sole trader. An ‘‘employee’’ includes current and former employees, and contractors. However, the act only protects disclosure of ‘‘serious wrongdoing’’, such as the organisation acting in a way that it is a serious risk to public health or safety or to the environment, or acting in a way that is a legal offence.
If you take retaliatory action against your whistleblowing employee it can be cause for them to take a personal grievance claim. Your employee can’t be prosecuted for making the disclosure. Therefore, as an employer, you can’t necessarily rely on confidentiality clauses in your employment and contractor agreements.
Your employee must make their disclosure in the way set out in the legislation. The issue must be a ‘‘serious wrongdoing’’, your employee must believe that the information is true, and they must be making the disclosure so it can be investigated.
If your business has an internal procedure for the disclosure of wrongdoings, your employee must follow that. If there’s no internal procedure, or it’s not possible to use it, the act provides other methods. The first step is for your employee to approach your company’s chief executive. Alternatively the legislation provides a list of ‘‘appropriate authorities’’ to which your employee can make a disclosure.
What is fairly certain is that going to the media is not protected by the act, as the media doesn’t generally qualify as an ‘‘appropriate authority’’. Also, where your employee makes false allegations or acts in bad faith they won’t be protected.
What does this mean for a business in the private sector? The first matter to consider is whether you should implement a ‘‘protected disclosure policy’’. While there will be some time, effort and cost involved, having a policy gives you the opportunity to gain awareness of issues early on in the disclosure process. This can reduce the on-going costs of dealing with issues raised and could limit negative publicity.
If no disclosure policy is in place, your senior managers still need to be aware of the act’s provisions. Most importantly, you need to know that if an employee makes a ‘‘disclosure’’ then action dealing with the wrongdoing needs to be taken within 20 working days. After that time your employee may make the disclosure to an appropriate authority and the ability to control how the issue is dealt with will have been lost. Dan Moore is a partner in Hamilton law firm Norris Ward McKinnon. Information in this column should not be taken as legal advice.