Whistleblowing Compliance Countdown: Are you ready?

The Protected Disclosures (Protection of Whistleblowers) Act 2022 has received royal assent.  The new legislation comes into effect on 1 July 2022 leaving little time for organisations to get their house in order.

Why the change?

The Protected Disclosures Act 2000 is now well over 20 years old. It is arguably no longer fit for purpose given the increased focus by regulators (and more broadly – many NZ organisations) on good governance, conduct and culture.  The FMA and RBNZ conduct and culture reviews of 2018/19 identified the pressing need in New Zealand for effective whistleblower policies that are accessible, confidential and comprehensive.  The Protected Disclosures (Protection of Whistleblowers) Act Bill was first introduced on 24 June 2020. The intent was to have new law by 1 July 2021, so the Act is a year behind its original schedule.  

What is in the new legislation? 

The amendments are aimed at strengthening the protection available to whistleblowers in New Zealand.  Some key changes are:

New detailed guidance for a receiver of information

The new guidance states that a receiver of information should acknowledge receipt; consider the disclosure; deal with the matter; and inform the discloser about what the receiver is doing.  The Act also explicitly states that a receiver can decide to take no action.  The receiver should communicate this decision to take no action, and the reasons why, to the discloser.  Reasons can include that the matter is best addressed by other means. This section contains a late amendment – ‘obligations’ has been swapped out for ‘guidance’.  It now states that there is no legal obligation on any person in relation to this section. 

Direct disclosure to an appropriate authority at any time

The Act enables disclosers to make a disclosure directly to an appropriate authority at any time.  Under the current legislation, this was only available in certain limited circumstances.  The Act adds a new schedule containing examples of the most likely appropriate authorities and examples of the nature of concerns they deal with.  This makes the rules more easily understandable for those who may need to refer to them.  

Extension to the definition of serious wrongdoing

The Act continues (as the current Act does) to apply only to allegations of ‘serious wrongdoing’.  In the past there had been criticism of the limited scope of serious wrongdoing, and as a result there is an expansion of the definition of serious wrongdoing to capture oppressive, unlawfully discriminatory or grossly negligent conduct (or gross mismanagement) by a public sector employee or any person acting or purporting to act on behalf of a public sector organisation or the Government.  Importantly, a very late amendment appears to have now further expanded of the definition of ‘serious wrongdoing’ to include ‘a serious risk to the health and safety of any individual’.  This late addition could be controversial for employers (see below) and was not originally consulted on in the introduction of the original Bill in 2020.

Protection available even if the discloser is mistaken

The Act specifically states that the protections available for disclosers apply even if the discloser is mistaken and there is no serious wrongdoing.  The protection is also available if:

• they do not refer to the name of the legislation when making the disclosure; 
• if they fail to technically comply with the Act’s requirements; or 
• if they also make the disclosure to another person provided it is done on a confidential basis and for the purpose of seeking advice on making a protected disclosure.  

However, this is subject to the disclosure not being made in bad faith.

Protection also applies to someone who discloses information in support of or relating to a protected disclosure. 

Internal procedures for public sector organisations

Privacy and confidentiality

 

Are employment relationship problems captured here?

The widening of serious wrongdoing could lead to some complexities.  The new definition arguably covers bullying and harassment which are issues usually dealt with through an employer investigation, often as part of a personal grievance process.  Such investigations are generally governed by principles of natural justice which don’t fit neatly with some of the process requirements/protections provided for in the Act.  Employers will still be able to decide that a complaint presented as a protected disclosure can be dealt with through other means (as above) or that no action is required, but there appears scope here for the process requirements to apply anyway.

What should employers be doing?

Employers who do yet not have whistleblowing policies or procedures should look to implement them.  They are an important tool in ensuring that employees have a clear avenue through which to report concerns.  In some jurisdictions they are compulsory in the private sector. These policies should ideally reference this New Zealand legislation. 

Employers who do have existing policies in place need to be aware of the changes that will be introduced shortly and update (i) any internal whistleblowing policies and procedures and (ii) any associated/related policies that might interact with the serious wrongdoing definition. The key policies here will be health and safety related policies such as bullying and harassment policies which will likely cover matters that are ‘a serious risk to the health and safety of any individual’.

Many New Zealand employers still publish a ‘one size fits all’ global whistleblowing policy. While this can be a more cost-effective approach for multinationals, this may not be fit for purpose under this new Act and should be reviewed.

To discuss the new Act in more detail, please reach out to a member of our Employment team.