By Judith Griessel, Griessel Consulting: On 2 August 2017, amendments to the Protected Disclosures Act of 2000 were published. The Amendment Act introduces several new provisions which broadens the application of the Act beyond the employer/employee relationship, and places further obligations on both whistleblowers and employers.
Background
The Protected Disclosures Act (PDA) came into effect on 16 February 2001 and provides procedures and protection to whistleblowers in the private and public sector, who disclose information regarding unlawful or irregular conduct by their employers or fellow employees. It encourages a culture of good governance, accountability and transparency.
The protection extended to whistleblowers by the Act is however not unconditional, and not all disclosures are protected. There are specific requirements which must be met in order to enjoy protection and employees need to understand what qualifies as a protected disclosure and when they can claim that they have suffered an occupational detriment. Practical Guidelines have been published by the Minister on 31 August 2011 to further guide employers and employees in this regard.
The irregularities covered by the Protected Disclosures Act include the following:
- criminal offences being committed or likely to be committed;
- failure of any person to comply with certain legal obligations;
- miscarriages of justice;
- endangering of the health or safety of individuals;
- damage to the environment; and
- unfair discrimination.
The Act specifies different ways in which protected disclosures can be made: internally to the employer / organisation; and externally to lawyers and bodies like the Public Protector. There are also requirements such as that the whistleblower must act in good faith, not for personal gain, and must substantially believe that the information is true. If these parameters are not met, the disclosure may not be protected and the whistleblower may be subject to disciplinary- and/or legal action.
Enter the recent amendments to the PDA on 2 August 2017. Of particular importance for employers are two new administrative obligations created by the Amendment Act, namely that (1) employers must formulate and document internal whistleblowing procedures, and must bring this to the attention of all its employees; and (2) employers are required to respond in writing to a disclosure within 21 days and keep the employee/worker informed of steps being taken in relation to investigating the matter. More about this below.
The amendments in a nutshell
- The Amendment Act introduces the new term “worker” in addition to “employee”. The definition of ‘worker’ includes individuals who currently or previously worked for the employer; also independent contractors, consultants, agents and those rendering services to a client whilst being employed by a temporary employment service (labour broker).
- The PDA protects an employee (and now also a ‘worker’) who makes a protected disclosure against any occupational detriment by the employer because of making the disclosure. ‘Occupational detriment’ has always included discipline, dismissal, transfers, refusing promotions, bad references, not appointing the whistleblower to a position, threatening to do any of these, or any other adverse effect on their work security or employment. In terms of the Amendment Act, the employee or worker is now in addition also protected against –
- any civil claim by the employer for breach of confidentiality, if they disclose (i) a criminal offence; or (ii) information which shows or tends to show that a substantial contravention of, or failure to comply with the law has occurred, is occurring or is likely to occur; and
- any adverse effect in respect of the retention or acquisition of contracts to perform work or render services.
So, for example, if a consultant or labour broker blows the whistle on (intended) criminal or illegal conduct of a client, it could potentially qualify for statutory protection against cancellation of its service contract by the client, or refusal to give them further work because of the disclosure.
- As regards disclosures made to the employer itself, this is governed by section 6 of the Act. Section 6 requires that the disclosure must be made in good faith and must be in terms of a procedure laid down by the employer. As mentioned above, a new obligation is imposed on employers in terms of section 6(2)(a), i.e. that all employers must now –
(i) authorise appropriate internal procedures for receiving and dealing with information about improprieties; and
(ii) take reasonable steps to bring the internal procedures to the attention of every employee and worker.
Therefore, employers must ensure that they have measures and procedures in place to deal with employee disclosures and that these are communicated to their employees. Ideally this would be done by way of a company policy which is made available to all employees. Such a policy should indicate the types of irregular conduct which should be reported; stipulate the steps to be taken if a person wants to report it; and provide guidance on the specific information which should be provided in the disclosure. The employer should also provide training to their employees in this regard or make it part of educating employees in terms of the company’s ethics and its views on anti-corruption.
- A further new provision introduced into the PDA by way of section 3B is the duty of the employer to inform an employee or worker of the steps taken once a disclosure has been made.
- After receiving a protected disclosure, employers are required to – as soon as reasonably possible but within a period of 21 days after receiving the protected disclosure – decide whether to investigate the matter or refer the disclosure to another more appropriate person or body for investigation.
- The employer must acknowledge receipt of the disclosure in writing and inform the employee or worker of its decision to investigate the matter or to refer it to another person or body. If the employer decides not to investigate, reasons for doing so must be provided. If it will be investigated, a time frame for the investigation should be indicated where possible.
- If the employer cannot make a decision within this time period, it must inform the employee or worker in writing of this and thereafter regularly (not more than 2 month-intervals) advise the employee or worker that the decision is still pending – however the decision must be made and communicated within a period of six months after the protected disclosure has been made.
- The outcome of any investigation must also be communicated to the whistleblower.
- The employer need not comply with the above if the identity and contact details of the whistleblower is not known; or need not advise an employee or worker of its decision on whether or not to investigate the relevant matter if “it is necessary to avoid prejudice to the prevention, detection or investigation of a criminal offence”.
- A new liability is created by insertion of section 3A, namely that an employer and its client are jointly and severally liable for those instances where the employer “under the express or implied authority or with the knowledge of a client” subjects an employee or worker to an occupational detriment.
- If an employee or worker discloses information that a criminal offence has been/ is being / is likely to be committed, or which shows that a substantial contravention of, or failure to comply with the law has occurred / is occurring / is likely to occur, such an employee or worker will not be liable to any civil, criminal or disciplinary proceedings for making a disclosure which is “prohibited by any other law, oath, contract, practice or agreement requiring him or her to maintain confidentiality or otherwise restricting the disclosure of the information with respect to a matter”. However, this exclusion of liability does not extend to the civil or criminal liability of the employee or worker personally for his or her participation in the disclosed impropriety.
- It is now also a criminal offence when an employee or worker intentionally discloses false information (or when they should reasonably have known that it was false) with the intention to cause harm, and the affected party does suffer harm. Imprisonment of up to 2 years or a fine can be imposed. Disclosures should therefore not be based on mere speculation – such allegations can also have serious consequences for the company and persons implicated in the allegations.
Conclusion
The changes introduced by the Amendment Act are important. The ambit of the PDA is now much broader and it is more important than ever for employers to focus some time and resources on this. A proper whistleblowing policy to augment the anti-fraud and corruption policies of the employer, is now a necessity and a legal requirement.
The aim of this legislation is to create workplaces that operate lawfully and ethically and employers are expected to create a culture within which employees are encouraged to blow the whistle on conduct that irregular, illegal, corrupt or unethical. This will however only happen if the leaders of the organisation pay more than lip service to this and ensure that they lead by example.
For more information, please contact Judith at judith@griesselconsulting.co.za
