Should you tell? Or will there be unpleasant repercussions? Rochelle Brown, a solicitor with the Dunedin and Queenstown firm of Anderson Lloyd Caudwell, outlines how the new Protected Disclosures Act looks after whistle-blowers.
Fraudsters beware: your colleagues or employees may be more likely to "blow the whistle" on you now that they are guaranteed legal immunity and protection from retaliation by their employer. While this is bad news for the fraudsters out there, it is good news for honest business owners who are now more likely to find out if their employees are up to no good.
The protection is provided by the Protected Disclosures Act 2000 ("the Act"), which came into force on 1 January 2001. While there has been little discussion about this Act, known by many as the whistle-blowing law, its effects have the potential to be wide reaching. The Act applies to all organisations employing people, from family businesses to local kindergartens to large companies.
The purpose of the Act is to facilitate the disclosure and subsequent investigation of matters of "serious wrongdoing" in or by an organisation. It does so by protecting employees who make such disclosures. Former employees, independent contractors, and managers will also be protected.
An employee may fear victimisation for making a report about a colleague's or employer's transgressions. An employee's duty of fidelity towards an employer has been used as a legitimate justification for dismissing an employee who reported a transgression on the part of their employer. The Act removes the fear by protecting the employee from civil or criminal liability or retaliatory action by the employer.
The Act overrides this situation and positively protects employees who reveal serious wrongdoings. The protection provided by the Act includes employees' rights to have their name and identity kept confidential, unless disclosure is essential to the investigation or to public health or safety. If employees suffer "retaliatory action" by the employer, they may pursue a personal grievance under the Employment Relations Act 2000. Retaliatory action would include the employer dismissing, demoting, disadvantaging, or harassing an employee.
Perhaps the most valuable protection the Act gives is immunity from liability. An employee who discloses information under the Act cannot be held liable in respect of that disclosure, whether civilly, or criminally. Employers who pass the information on to the authorities are guaranteed the same immunity.
The Act provides examples of the serious wrongdoing that employees may disclose. These include conduct that constitutes an offence or a serious risk to public health or safety, the environment, or the maintenance of the law. Serious wrongdoing also includes oppressive, discriminatory or grossly negligent conduct by public officials, as well as corrupt or irregular use of public funds or resources.
An employee who wants to make a protected disclosure must believe on reasonable grounds that the information is likely to be true and must wish to disclose it so that the wrongdoing can be investigated. The disclosure will be protected even where the wrongdoing occurred before the Act came into force.
Every public sector organisation has to develop an internal procedure for employees wishing to make protected disclosures. Private sector organisations are not required to have a procedure; but if they do not, employees can make disclosures according to the procedure set out in the Act. If an employer does not follow the appropriate procedure, the disclosure may not be protected.
The internal procedure should set out the steps to be taken by an employee who wishes to make a disclosure. It must comply with the principles of natural justice and be published regularly in staff manuals or on notice boards and in newsletters.
In certain situations an employee may bypass the internal procedure or make disclosures to people outside the organisation. Depending on the circumstances, these people include the Commissioner of Police, the Serious Fraud Office, an Ombudsman, the Health and Disabilities Commissioner, or a Minister of the Crown. The internal procedure should detail when you may approach an outside person and the steps involved.
It is worth noting that to be a protected disclosure, the disclosure must be about "serious wrongdoing" as it is defined. It is perceivable than an employer may challenge an employee's disclosure on the grounds that the disclosure was about an action that does not fall within the definition of serious wrongdoing. If the court agreed, then the employee's disclosure would fall outside the Act and the employee would arguably not be protected. This is presumably an oversight on the legislature's part, which could be remedied by protecting all disclosures that are made in good faith.
While some less scrupulous individuals may fear the new Act, businesses are likely to look upon it favourably, as it makes it safer for employees to disclose the wrongdoings of other employees or employers. A good internal procedure will ensure that disclosures are made to the appropriate people and cause the least disruption possible.
Copyright The Lawlink Group Ltd 2001
Every effort has been made to ensure that this information is accurate. However, it is general introductory information only. It does not constitute legal advice and should not be relied on as such. Specialist legal advice should be sought in particular matters.
Rochelle Brown is a solicitor in the Lawlink firm of Anderson Lloyd Caudwell.
Web site: Anderson Lloyd Caudwell
Email: rochelle.brown@andersonlloydcaudwell.com
June 2001
Fraudsters beware: your colleagues or employees may be more likely to "blow the whistle" on you now that they are guaranteed legal immunity and protection from retaliation by their employer. While this is bad news for the fraudsters out there, it is good news for honest business owners who are now more likely to find out if their employees are up to no good.
The protection is provided by the Protected Disclosures Act 2000 ("the Act"), which came into force on 1 January 2001. While there has been little discussion about this Act, known by many as the whistle-blowing law, its effects have the potential to be wide reaching. The Act applies to all organisations employing people, from family businesses to local kindergartens to large companies.
The purpose of the Act is to facilitate the disclosure and subsequent investigation of matters of "serious wrongdoing" in or by an organisation. It does so by protecting employees who make such disclosures. Former employees, independent contractors, and managers will also be protected.
An employee may fear victimisation for making a report about a colleague's or employer's transgressions. An employee's duty of fidelity towards an employer has been used as a legitimate justification for dismissing an employee who reported a transgression on the part of their employer. The Act removes the fear by protecting the employee from civil or criminal liability or retaliatory action by the employer.
The Act overrides this situation and positively protects employees who reveal serious wrongdoings. The protection provided by the Act includes employees' rights to have their name and identity kept confidential, unless disclosure is essential to the investigation or to public health or safety. If employees suffer "retaliatory action" by the employer, they may pursue a personal grievance under the Employment Relations Act 2000. Retaliatory action would include the employer dismissing, demoting, disadvantaging, or harassing an employee.
Perhaps the most valuable protection the Act gives is immunity from liability. An employee who discloses information under the Act cannot be held liable in respect of that disclosure, whether civilly, or criminally. Employers who pass the information on to the authorities are guaranteed the same immunity.
The Act provides examples of the serious wrongdoing that employees may disclose. These include conduct that constitutes an offence or a serious risk to public health or safety, the environment, or the maintenance of the law. Serious wrongdoing also includes oppressive, discriminatory or grossly negligent conduct by public officials, as well as corrupt or irregular use of public funds or resources.
An employee who wants to make a protected disclosure must believe on reasonable grounds that the information is likely to be true and must wish to disclose it so that the wrongdoing can be investigated. The disclosure will be protected even where the wrongdoing occurred before the Act came into force.
Every public sector organisation has to develop an internal procedure for employees wishing to make protected disclosures. Private sector organisations are not required to have a procedure; but if they do not, employees can make disclosures according to the procedure set out in the Act. If an employer does not follow the appropriate procedure, the disclosure may not be protected.
The internal procedure should set out the steps to be taken by an employee who wishes to make a disclosure. It must comply with the principles of natural justice and be published regularly in staff manuals or on notice boards and in newsletters.
In certain situations an employee may bypass the internal procedure or make disclosures to people outside the organisation. Depending on the circumstances, these people include the Commissioner of Police, the Serious Fraud Office, an Ombudsman, the Health and Disabilities Commissioner, or a Minister of the Crown. The internal procedure should detail when you may approach an outside person and the steps involved.
It is worth noting that to be a protected disclosure, the disclosure must be about "serious wrongdoing" as it is defined. It is perceivable than an employer may challenge an employee's disclosure on the grounds that the disclosure was about an action that does not fall within the definition of serious wrongdoing. If the court agreed, then the employee's disclosure would fall outside the Act and the employee would arguably not be protected. This is presumably an oversight on the legislature's part, which could be remedied by protecting all disclosures that are made in good faith.
While some less scrupulous individuals may fear the new Act, businesses are likely to look upon it favourably, as it makes it safer for employees to disclose the wrongdoings of other employees or employers. A good internal procedure will ensure that disclosures are made to the appropriate people and cause the least disruption possible.
Copyright The Lawlink Group Ltd 2001
Every effort has been made to ensure that this information is accurate. However, it is general introductory information only. It does not constitute legal advice and should not be relied on as such. Specialist legal advice should be sought in particular matters.
Rochelle Brown is a solicitor in the Lawlink firm of Anderson Lloyd Caudwell.
Web site: Anderson Lloyd Caudwell
Email: rochelle.brown@andersonlloydcaudwell.com
June 2001
August, 2001
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