Missed opportunity to breathe life into new whistleblowing laws?

Wednesday 1 July 2020

Authors: Tim Clarke, Andrea Pazin and Charlotte Joy

​​The Protected Disclosures (Protection of Whistleblowers) Bill (the Bill), introduced to Parliament last week, has passed its first reading today. 

The Bill will replace the 'current' 20-year-old regime. It is intended to make the legislation more accessible, to facilitate protected disclosures, and protect those who “blow the whistle" on serious wrongdoing in their workplace. All organisations will need to consider any po​licies and processes they have around protected disclosures if the proposed changes go ahead.

Backgrou​nd

As discussed in our previous update, the Protected Disclosures Act 2000 (PDA) had long been criticised for being disconnected from the needs of a potential whistleblower. Compared to overseas jurisdictions, the PDA has received little attention from Parliament or the courts. However, in early 2020, the government announced that the PDA would be put back under the microscope.

The B​ill

The aim of the Bill is to improve the current provisions and principles of the PDA to make the whistleblowing scheme more accessible and easier to understand for “non-lawyers". At the same time, the Bill will address some of the issues identified with the PDA.

To achieve this, the Bill seeks to make a number of changes, including to:

  1. Extend the definition of serious wrongdoing to cover the misuse of public funds and the delivery of public services by the private sector: The changes ensure that unlawful, corrupt, or irregular use of public funds or resources comes within the scope of the PDA regardless of whether it occurs in a public or private organisation. The Bill also specifically includes non-government organisations delivering services or exercising authority on behalf of the government.​

  2. Enable disclosers to report serious wrongdoing directly to an appropriate authority at any time: Currently, disclosure to an appropriate authority is only an option in limited circumstances, including in urgent or exceptional circumstances, where the head of the organisation may be implicated, or where there is inaction following a disclosure. This change will provide more options to disclosers, and has the potential for greater scrutiny by appropriate authorities. A schedule has also been included to help disclosers identify which authority may be the most appropriate, depending on the nature of the disclosure. 

  3. Provide guidance on the process for disclosers and receivers: The Bill clarifies the process around making a disclosure, and guidance on the steps that a receiver should take within 20 working days of receiving a protected disclosure. This includes acknowledging the disclosure, considering whether the disclosure should be referred externally, and determining whether the disclosure has been made elsewhere (and any previous outcome). The proposed change provides options for dealing with a disclosure, and requires a receiver to keep the discloser informed about action taken (with reasons). While these steps are described as guidance only, failing to comply with the suggested process may result in the disclosure being escalated to a Minister or the Ombudsman, and the Ombudsman becoming involved in an investigation (at least in the public sector). 

  4. Clarify potential forms of adverse conduct against disclosers: The Bill amends the Employment Relations Act 2000 (ERA) by including a new personal grievance claim where an employer retaliates or threatens to retaliate against a discloser. The Bill also clarifies the prohibition of victimisation of disclosers and confirms that this would be a breach of the Human Rights Act 1993. 

  5. Provide more information on the content of public sector policies on protected disclosures: The Bill stopped well short of extending a requirement for all organisations (private sector included) to have policies on protected disclosures. However, the Bill provides more information on what policies should contain, including a summary of several key provisions in the Bill, describing how the organisation will consider disclosures, how they will provide practical assistance and advice to disclosers, and how they will meet their confidentiality obligations.

While the purpose of the Bill is to simplify and clarify provisions, and introduce new policy in some areas, there are still areas of uncertainty which will need to be considered by Parliament.

For example, under a summary of the protections available, the Bill states that a receiver must keep the discloser's identity confidential, which creates an impression that the duty is absolute. This impression fails to accurately capture the circumstances where a discloser's identity may be disclosed. In the employment context, for instance, an employer is typically required to disclose the identity of the discloser as part of an employer's statutory duty of good faith under the ERA and natural justice principles.

On a more positive note, the Bill requires the employer to consult with the discloser before releasing their identity, and generally provides for ongoing engagement with the discloser.

Where to from here?

No doubt there will be further debate in the House regarding the provisions of this Bill. Outside of these proposed legislative changes, the State Services Minister has also indicated there will be further work by the State Services Commission and the Ombudsman to improve awareness about the regime, and provide assistance in navigating it.

There will also be a second tranche of work to look at more contentious and difficult issues, including whether to establish a “one stop shop" for disclosures, whether to extend the requirement to have internal policies on whistleblowing to all organisations, and whether to introduce reporting requirements around protected disclosures.

In the COVID-19 environment, and in a society where employees are encouraged to call out unacceptable behaviour, we have seen more employees willing to speak out about unsafe work practices, non-compliance with government COVID-19 Alert Levels and wage subsidy requirements. Despite this willingness, there continues to be reluctance to report serious wrongdoing in the workplace when the discloser risks retaliation and injuring their reputation or job security. Whether the proposed legislative reform goes far enough to protect whistleblowers will no doubt be the subject of debate.

Employers may wish to follow the Bill as it proceeds through Parliament. T​he intended commencement date of the changes is 1 July 2021. It is important to note that the proposed reform does not replicate the significant reform around protected disclosures in Australia.

If you have any questions on the proposed reforms or about protected disclosures generally, please get in touch with the contacts listed or your usual Bell Gully adviser.


Disclaimer

This publication is necessarily brief and general in nature. You should seek professional advice before taking any action in relation to the matters dealt with in this publication.

For more information
  • Tim Clarke

    Partner Auckland
  • Liz Coats

    Partner Auckland
  • Rachael Brown

    Partner Wellington
  • Andrea Pazin

    Senior Associate Wellington
Related areas of expertise
  • Employment and workplace safety