Final whistle imminent for introduction of new Protected Disclosures legislation
The Protected Disclosures (Protection of Whistleblowers) Act 2022 (the PDA 2022) has been a long time coming. Having finally passed through Parliament, the new legislation received Royal Assent on 13 May 2022 and will come into force on 1 July 2022, replacing the Protected Disclosures Act 2000.
While whistleblowing has long been recognised as uniquely valuable in bringing to light otherwise undiscovered misconduct and serious wrongdoings in an organisation, it often requires considerable risk and/or sacrifice on the part of an individual. In this respect, the 2000 Act has been criticised as not being sufficiently understood or going far enough to protect those who make themselves vulnerable and often risk their job and even their personal safety by exposing wrongdoing or misconduct in the workplace. The intention of the PDA 2022 is to increase and simplify the current protections, raise public awareness, and generally make it easier for whistleblowers when they choose to act.
As noted by Chief Ombudsman Peter Boshier:
“Insiders are usually the first to know about serious wrongdoing in the workplace. Every worker in New Zealand needs to know if they make a disclosure it will be taken seriously and action will be taken….New Zealand was one of the first countries in the world to introduce legislation that protects people who report concerns of serious wrongdoing in their workplace. But it was apparent that the original law wasn’t working as well as it should for either employees or organisations.”
In this article, we examine what a protected disclosure is and whether the new legislation will make a difference to workers who find themselves in the unenviable position of potentially having to choose between personal and public interest.
For a disclosure to be protected under the PDA 2022, the individual making it must have reasonable grounds to believe there has been serious wrongdoing; further, they must not make the disclosure in bad faith.
Meaning of serious wrongdoing
Notably, the new legislation extends the definition of ‘serious wrongdoing’ to cover private sector use of public funds and explicitly includes behaviour that is a serious risk to the health and safety of any individual eg bullying and sexual harassment.
Serious wrongdoing also includes any conduct that is or involves:
- An offence
- A serious risk to public health and safety
- A serious risk to the environment
- Interference with the maintenance of law, including the prevention, investigation, and detection of offences, and the right to a fair trial
- Unlawful, irregular, or corrupt use of public funds or resources
- Unlawful discrimination, or gross negligence or mismanagement by the public sector
All workers making a protected disclosure about their organisation are protected, which includes employees, secondees, contractors, board members, and volunteers.
Making protected disclosures
Under the PDA 2022, the disclosure must be made:
- In accordance with any internal disclosure procedures; or
- To the head or a deputy head of the organisation; or
- To an appropriate authority.
This final option to report serious wrongdoing directly to an appropriate authority at any time is a further significant extension to the previous legislation, which only permitted that option in certain circumstances.
Receiving protected disclosures
The PDA 2022 also strengthens protections for disclosers by specifying what a receiver of a disclosure should do. Specifically, it states that a person receiving a disclosure has 20 working days to:
- Acknowledge to the discloser when the disclosure was received
- Consider the disclosure and whether it warrants investigation
- Check with the discloser whether the disclosure has been made elsewhere and if there was any outcome
- Deal with the matter by:
- Investigating the disclosure
- Addressing any serious wrongdoing by acting or recommending action
- Referring it to an appropriate authority
- Deciding that no action is required
When compared to the 2000 Act, these options provide further clarification as to the ability of the appropriate authority to decline or refer the disclosure.
To that end, the receiver must inform the discloser within 20 days what is being done (with reasons). If a receiver decides that no action is required, the discloser must be informed and provided with the reasons for this decision.
Protections for disclosers
The PDA 2022 also clarifies the potential forms of adverse conduct disclosers may face and the applicable protections. A discloser is entitled to protection even if they are mistaken, and there is no serious wrongdoing and also if they do not refer to the legislation when making the disclosure or technically fail to comply with it (as long as they substantially do).
A person receiving a disclosure must use their best endeavours to keep confidential any information that might identify the discloser. This is the case unless the discloser consents to being identified or it is essential for the effective investigation of the disclosure, to prevent serious health and safety risks, to comply with natural justice, or for an investigation for the purpose of law enforcement.
Where information is released that will identify a discloser, they must be informed that this has happened. The PDA 2022 also provides for enhanced protections for disclosers under the Privacy Act 2020, meaning that the release of information that might identify a discloser can amount to an interference with privacy, even if no harm eventuates.
Retaliation includes dismissal, detriment or disadvantage, retiring the employee, or treating differently by refusing opportunities or benefits. Where an employer retaliates against an employee because they have made or intend to make a protected disclosure (or the employer threatens retaliation), the employee has a personal grievance. No other person should be treated less favourably or victimised in any respect because they have made or intend to make a protected disclosure.
No contracting out
The PDA 2022 also expressly states that organisations cannot contract out of the legislation and whistleblowers cannot be prevented from making a protected disclosure by any agreement, contract, or internal procedure (eg a settlement or non-disclosure agreement).
Special rules for all public sector organisations
In addition, the PDA 2022 identifies internal procedures required by public sector organisations and the need to state how they will provide support to disclosers.
These procedures must set out the process that will be followed by the organisation when receiving a protected disclosure. This includes who it may be made to, a description of the protections provided under the PDA 2022, and the practical assistance and advice the organisation will provide to disclosers.
Although the new legislation does not require private sector organisations to establish similar procedures for protected disclosures, it would be in their best interests to do so.
Many will consider that the PDA 2022 does not go far enough to achieve its goals. Particularly in contrast to protected disclosure legislation elsewhere, such as Australia where, for example, it is a criminal offence for someone to take or threaten to take reprisal action for a protected disclosure made by a public sector worker. Since the beginning of 2020, it has also been a requirement in Australia for public companies, large proprietary companies, and corporate trustees of APRA-regulated superannuation entities to have a whistleblower policy.
Nonetheless, it is evident that the PDA 2022 improves on the previous legislation in terms of providing clarity and accessibility to the protections available. It may also be hoped that the Government will keep the promise made by Minister Hipkins to “build awareness of the new legislation so that organisations know what they need to do, and people can better understand the protections available and feel safer raising their concerns when they do see something seriously wrong in their workplace.”
If you have any questions about the Protected Disclosures (Protection of Whistleblowers) Act 2022 or need help preparing for its introduction, please feel free to contact our employment team for advice.
Disclaimer: The content of this article is general in nature and not intended as a substitute for specific professional advice on any matter and should not be relied upon for that purpose.