Justice Administered Fund Bill & Protected Disclosures Amendment Bill: Department briefing; Determination of salaries, allowances & benefits for judges: adoption

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Justice and Correctional Services

01 March 2016
Chairperson: Ms C Pilane-Majake (ANC)
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Meeting Summary

A delegation from the Department of Justice and Constitutional Development (Department) presented the Protected Disclosures Amendment Bill, the Justice Administered Fund Bill, and proposals on increments in the salaries and benefits of judges and magistrates.

The Protected Disclosures Amendment Bill sought to extend the application of the Public Disclosure Act (PDA) to the private sector, regulate the joint liability of employers, introduce a duty to inform whistle blowers of investigation progress, provide them with immunity against civil and criminal liability, and criminalise the disclosure of false information.

Several Committee Members noted that the Bill had taken nine years to be presented. Given its inclusion of the private sector, they raised concerns over its clash with legislation such as the Companies Act, the Public Service Act and the National Environmental Management Act. They queried the vague definition of an employer, the meaning of “occupational detriment,” the 21 days allocated for employers to investigate disclosure allegations, the protection of the identity of whistle blowers, the non-provision of legal aid to whistle blowers, and the exclusion of Members of Parliament from disclosure bodies.

In response, the delegation blamed wide consultations and the general elections for the delay in the submission of the Bill. It stated that provisions on whistle blowers’ protection in other legislation did not clash with the PDA or the Bill. It was not appropriate to include other bodies such as Parliament in disclosure institutions, because several stakeholders in the private sector needed to be consulted. 21 days was reasonable for employers to investigate disclosures. It admitted that protecting the identity of whistle blowers was a difficult issue, employers could not be sanctioned for failure to investigate within 21 days, and legal aid to whistle blowers had not been considered.

Committee Members noted that the Justice Administered Fund Bill presentation indicated progress. However, they questioned the keeping of reserve accounts, the ten-year period for unclaimed monies, the lack of efforts in tracing beneficiaries, and usage of the interest that accrued on reserve accounts. The delegation responded that beneficiaries could still reclaim monies after the ten-year period. The Department had not really thought about accrued interest, but used part of the money to offset banking costs. Some Committee Members demanded that the Department inform people of their right to claim bail money.

Although Members approved the proposals for increments in judges’ and magistrates’ salaries and benefits, they were concerned by the huge disparities between the salaries of judicial officials and other arms of government. They noted that magistrates were on the negative end of salary disparities.

A Member warned that action needed to be taken before something serious – like a strike by magistrates – occurred. 

Meeting report

New Chairperson and Opening remarks
The Chairperson, Dr M Motshekga (ANC), asked Ms C Pilane-Majake (ANC) to chair the meeting.

Ms Pilane-Majake welcomed everyone, set out the agenda, and called on the delegation from the Department of Justice and Constitutional Development to present the Protected Disclosures Amendment Bill.

Briefing on Protected Disclosures Amendment Bill
Mr Henk du Preez, State Law Advisor, Department of Justice and Constitutional Development (DoJ&CD), restated the objectives of the Protected Disclosures Act (PDA) as being the protection of employees from subjection to occupational detriment on account of a protected disclosure, to provide remedies for any detriment suffered as a result of disclosure information, and to provide for procedures for responsible disclosure.

The Bill seeks to extend the application of the Act to any person who works or worked for the State or another person, assists or assisted in the business of an employer or client as an independent  contractor, consultant, agent or temporary employee; to regulate joint liability of employers and their clients; to introduce a duty to  inform  employees or workers who have disclosed information  regarding unlawful or irregular conduct; to provide for immunity against civil and criminal liability flowing from a disclosure of information on a criminal offence; to create an offence for the disclosure of false information; and for matters connected therewith. (See attached presentation)

Discussion
Mr S Swart (ACDP) noted that the Bill was based on the recommendations of the South African Law Reform Commission (SALRC) of 2007. He queried the delay between the recommendations and the presentation of the Bill, remarking that there could have been developments in the nine-year period. He wondered whether the provisions of the Companies Act, the Public Service Act and the National Environmental Management Act (NEMA) dovetailed with sections of the PDA, especially now the Bill sought to extend the PDA to the private sector. He gave the example of the NEMA, which grants a financial incentive of 20% to whistle blowers. He expressed concern at the non-passage of regulations to the PDA 16 years after its passage. He asked whether the allocated time period was sufficient for an employer to respond and what happened where an employer failed to respond within this period. He also wanted to know whether whistle blowers should not be granted legal aid.

Mr W Horn (DA) raised the issue of the protection of the identity of whistle blowers. He recalled that the SALRC had advised against a blanket protection of whistle blowers. He re-echoed Mr Swart’s concern over the seven years that had elapsed, noting that corruption had increased in this period. He wondered what the consequences were for an employer who failed to comply within the 21 days provided in the Bill, given the absence of enforcement mechanisms.   

Mr L Mpumlwana (ANC) asked why the Bill did not include Members of Parliament among those to whom disclosure could be made.

The Acting Chairperson called on the Department to respond to the queries, noting they were not in a position to answer the corruption allegations.

Mr Du Preez said that a number of factors impacted on the timely submission of the Bill to Parliament. The first was wide consultations. Other than the SALRC, entities in the private sector were extensively consulted, even though their inputs were not acknowledged in the Bill. The second limiting factor was the general elections. There were other provisions on whistle blowers’ protection, but they did not clash with the PDA or the Bill in any obvious manner. However, the Department would review this legislation and report to the Committee.

On section 16 bodies, disclosure may only be made to the Public Protector and the Auditor General. The Department reported to the Minister that the SALRC had recommended that there should be additional bodies and institutions to which disclosure could be made. However, the Department had suggested that it would not be appropriate to include these bodies. It had advised that consultations on the issue could be undertaken after the PDA was amended. This legislation applied to both the public and private sector. It was easier to include other bodies for disclosure in the public sector. However, the private sector was different in that one might have to approach several stakeholders to determine what type of disclosures may be received and what the jurisdictional areas were. In this respect, duplication of disclosure was a big concern.

Regarding the 21 days for an employer to investigate a disclosure, the Department believed that this was reasonable, since the 21 days must not be exhausted and the employer was expected to act as soon as possible. This was why provision was made for a longer period of investigation. Sometimes the disclosure may have to be analysed or pre-investigated. The given time period was aimed at giving the employer a fair notice. If the employer exceeded this period, progress updates should be given to the whistle blower.

The question of legal aid to whistle blowers did not come up in the consultations, but would be reviewed and reported back to the Committee.

Protecting the identity of whistle blowers was a difficult issue. Nothing stops the employer from protecting the identity of an employee who makes a disclosure. It need not be included in the legislation. The anti-corruption law had a provision for anonymous disclosure. The solution for anonymous disclosure was a practical one in light of section 3(b) of the Bill. The Department had decided to leave the protection of a whistle blower to the employer. The Department lacked statistics on the percentage of whistle blowers and was mindful of a number-crunching exercise to determine the extent of protection. The ambit of disclosure was very wide. It could involve elements of discrimination, so one had to make a decision whether a provision like that should be introduced.

On the proposed section 3(b) that lacked consequences for an employer that failed to act after a disclosure, two answers may be given. Firstly, it may be difficult to prosecute an employer. Secondly, if an employer received a disclosure and failed to act, the consequences were reputational damage. The employee could make the disclosure to other bodies such as the Public Protector. So the mere fact that an employee was not obliged to make the disclosure only to the employer was an incentive for the employer to act.

Unfortunately, the Department was unable to assess the success of the PDA with statistics on disclosure, but was open to introducing it.

The inclusion of MPs in the section 8 category was problematic, because an MP did not have investigative powers, and would likely refer disclosures to another body. The Department was, however, open to debate on this.

The Acting Chairperson expressed concern at the viability of legal aid for whistle blowers, given the financial implications.

Mr Swart admitted that legal aid was contingent on funding. He said that one or two other bodies such as the Public Service Commission could be added to section 8 to deal with protected disclosures. Protected disclosure should include Members of Parliament. Furthermore, there was a disclosure obligation in the Corruption Act. Had there ever been a conflict between it and the PDA?

Ms M Mothapo (ANC) asked whether the meaning of “occupational detriment” and “unfair labour practice” would not cause confusion for employees over the choice of legislation.

Mr Mpumlwana remarked that the definition of an employer in the Act was vague. For example, was the Public Service Commission not an employer? He wondered what the impact of hierarchies was on the ability of employees to make disclosures. He sought clarification on the meaning of an organ of state falling within the area of responsibility of the member concerned, or body of members (page seven). What if the persons to whom disclosures were supposed to be made were involved in the corruption supposed to be reported? There needed to be clarification of what an employer meant with regard to the civil service.

The Acting Chairperson requested the criteria the Department had used to decide which whistle blower to protect. She suggested that the inclusion of MPs in the category of disclosure bodies should be left for the plenary, to ensure wider consultation.

Mr M Maila (ANC) stated that in light of the Bill’s extension to the private sector, bodies such as the Public Service Commission and the Auditor General may be more focussed on the public service, so which bodies would play similar roles for the private sector?

Mr Du Preez responded that the PDA did not stop anyone from making disclosures to a Member of Parliament. The opportunity to make a protective disclosure to an MP did exist in the procedural rules in section 9 of the PDA.
 
The definition of occupational detriment was refined in line with the Labour Relations Act with respect to discrimination.

The definition of an employer with respect to hierarchy was not a problem, because the PDA did not require a whistle blower to follow a certain hierarchy

Mr Lawrence Bassett, the Chief Director, Legislative Development, DoJ&CS, said that an employer meant any person who employed, or provided work and paid for it.

Mr Johan Johnson, from the Office of the Chief Financial Officer, said that the Department would obtain information from the National Prosecuting Authority on statistics of corruption. Disclosures involving more than R100 000 qualified as protected disclosure, which fell under the Corruption Act. Presently, the Department was not in a position to answer the question of statistics from the National Prosecuting Authority. Disclosure to the Public Service Commission was not prohibited. There were many bodies, such as the Banking Council, to which disclosures in the private sector may be made.

Regarding blanket immunity, employees were sometimes subject to confidentiality. The recommendation was that blanket immunity should not be granted, except in serious issues such as crimes. The issue of blanket immunity would come up only when an employee who made a disclosure was subjected to a specific form of occupational detriment.

The Acting Chairperson called for systems put in place for disclosures to be monitored to ensure they were working. She called for presentation of the Justice Administered Fund (Fund).

Briefing on Justice Administered Fund Bill
Mr Bassett presented the Bill, and said its purpose was to establish a justice administered fund to regulate the management, control, investment and utilisation of money in the Fund. The Bill provides that certain monies received on behalf of third parties must be administered through the Fund. These are money received in terms of maintenance orders under the Maintenance Act, 1998; money received as bail in terms of the Criminal Procedure Act, 1977 or any Act of Parliament; money paid to court in terms of any Rule of Court or any law; money received which can not immediately be allocated into any of the above categories; and interest earned, or bank charges raised on money paid into or retained by the Fund. Bank costs relating to bank accounts maintained in respect of the Fund must be defrayed against the interest earned in respect of those accounts, and any net balance of interest earned on those accounts must be paid into the reserve account. Monies are carried over into the next financial year. The Director-General was accountable for the Fund. (See attached presentation)

Discussion
The Acting Chairperson remarked that the presentation showed progress, because the Fund had proved problematic.

Mr Horn remarked that the Fund largely dealt only with reserve funds. The ideal was not to have a reserve fund, but this was not a matter for the legislature.

Ms Mothapo commended the Department for progressing with the Bill, because it had been difficult for it to have a clean audit. She sought clarity on unclaimed monies, wondering what happened if beneficiaries failed to claim monies within ten years. Would these monies be forfeited to the state? On the investment of money, to whom would the interest accrue?

Mr Mpumlwana echoed Ms Mothapo’s concern on the forfeiture of money. He asked for the criteria for the ten-year limit and whether accrued interest was not supposed to be for the beneficiaries of the Fund. He alluded to the parable of the talents in the Bible.  

The Acting Chairperson remarked that discussion could stray into financial figures that the Committee could not handle. She called on the Department to respond to Members’ concerns.

Mr Johnson said that new systems had been put in place yesterday. A reserve fund was not ideal, and one of the weak elements of reserve funds was unclaimed bail. At the end of the last financial year, about R300 million had been derived from bail, a portion of which was unclaimed. The Department had consulted Treasury and sought legal opinions. Unclaimed monies were put in reserve accounts after ten years.

Mr Nico van Harmelen, Third Party Funds Director, said that ten years had been chosen because it was a reasonable time for people to claim their money.  This did not mean that if someone came after 20 years, the person could not reclaim it from the revenue fund. The money wa neither lost nor forfeited. In any case, the ten years was open for discussion. A lot of unclaimed bail money occurred when the NPA declined to prosecute and people were not aware that they could claim their bail money. On the interest that accrued, the Department had not really thought about this. The Department used part of the money to offset banking costs. But it was difficult to calculate interest on individual cases.

Mr Johnson said that around 98% of beneficiaries received their monies directly into their bank accounts. About 4 000 of 250 000 beneficiaries received their money in cash because they did not have bank accounts. The Department tried to trace beneficiaries by working with court services. It made short term investments to take cash out of its hands. Interest generated remained a contentious issue.

Mr Mpumlwana said that some sort of responsibility on the Department to inform people of their right to claim bail money should be inserted in the Bill, because people did not read Gazettes. This was because the details of the people were on record. He asked for advance notice of Bills or new regulations.

The Acting Chairperson excused the Department delegation, and announced a break at noon.

Public discussion of increment of judges’ salaries and benefits
On resumption, the Acting Chairperson called on Mr Blendynn Williams, Director of Legal Services, to present the draft notice and schedule determining the rate, with effect from 1 April 2015, of salaries, allowances and benefits payable to Constitutional Court judges and judges annually in terms of section 2(4) of the Judges’ Remuneration and Conditions of Employment Act, 2001, and those payable to magistrates annually in terms of section 12(3) of the Magistrates Act, 1993.

Mr Williams presented the recommended rates of increment in judges’ salaries, which were published in November 2015. The recommended increment for chief judges up to the Supreme Court of Appeal judges and Constitutional Court judges was 5%. The same rate was recommended for high court judges. The proposal for Parliament was for a 4.4% increment for judges. The Remuneration Dommission had recommended an increment of 5.5% for chief magistrates. The proposal before Parliament was a 6% increment for senior magistrates and 5.5% for others. A judge earned more than twice the salary of a magistrate. This was despite the fact that cases in both civil and criminal matters in regional and district courts had increased. A chief prosecutor earned more than a chief magistrate and a regional court president.

The Acting Chairperson acknowledged the need for intervention to avert a crisis with respect to the huge disparities in salaries of judicial officials. She called for responses.

Mr Mpumlwana requested a suggestion on the way forward from the Department for the Committee to consider. He remarked that increments were lopsided in favour of the prosecutor, and called for suggestions on the way forward.

Mr B Bongo (ANC) highlighted that disparities between the salaries of officials in the three arms of government were huge. He restated Mr Mpumlwana’s call for recommendations for Parliament to consider.

Mr Swart saidd that delay in resolving this issue would prejudice magistrates who were on the negative end of salary disparities. He noted that the last discussion on this issue occurred eight months ago. He suggested that the Committee approve the proposals, given the fiscal climate.

The Acting Chairperson said that the call for suggestions was not to block the process of finding a solution. She called for the institution of a process that should engage the Remuneration Commission.

Ms Christine Silkstone, Committee Content Adviser, promised to clarify and generate a report on the disparity in the salaries of judicial officials.

Dr Motshekga noted that the proposals before the Committee were for salaries of judges and magistrates only. He requested that the Committee approved them.

Mr Mpumlwana stated that the Committee may reluctantly approve the proposals because the issue had lingered for too long.

Ms Mothapo moved the adoption of the proposals for salary increases of judges and magistrates while the Committee waited for Ms Silkstone’s report.

Mr Maila seconded the motion.

The Acting Chairperson declared the proposals accepted, noting the concerns of Members on salary discrepancies, and hoped they would be examined.

Mr Williams requested that the Committee invite the Remuneration Commission and the Department to do a joint presentation on salary discrepancies.

Dr Motshekga said there were other forums for dealing with this matter, so it would be premature for the Committee to invite the Remuneration Commission.

Mr Mpumlwana said that there was a distinction between the remuneration of judges and other judicial officials. He said that action needed to be taken before something serious – like a strike by magistrates – occurred.

The Acting Chairperson said that the Committee would await Ms Silkstone’s report. She thanked everyone and closed the meeting.


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