Whistleblower Bill

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Justice and Correctional Services

06 March 2000
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Meeting Summary

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Meeting report

JUSTICE AND CONSTITUTIONAL DEVELOPMENT PORTFOLIO COMMITTEE
7 March 2000
"PROTECTED DISCLOSURES" BILL

Documents handed out:
Protected Disclosures Bill [dated 06/03/2000]
Draft Resolution

SUMMARY
The Committee discussed sections 1-4 of the new draft. There was general agreement on most of the definitions, however, the definitions of 'employer' and 'employee' still needed to be decided upon. Section 2(3) was discussed, particularly the possibilities of undermining the Act with agreements that exclude the consequences of the Act by placing conditions on its operation. Sections 3 & 4 discussed.

MINUTES
The Chair, Adv J de Lange (ANC), welcomed the members and drew their attention to the new draft He stated that he had not had the opportunity to go through the document and that the drafter, Mr Johan de Lange, would therefore be requested to assist in places. He noted that he would have to excuse himself at some point in the meeting for a few moments. Ms F Chohan-Khotha (ANC) would take the Chair in his absence.

The Chair noted that a discussion of the preamble would be left to the end of the discussion of the Bill and turned to the definitions (section 1).

Section 1 - Definitions
Section 1(i) - 'detriment': The Chair remarked that the option provided in the draft captures what the Committee intends. In the previous drafts, 'detriment' was not well defined. The definition has been narrowed - the term 'occupational detriment' is now defined.

A new s1(i)(a) has been added and covers disciplinary action and the list (s1(i)(a)-(h)) remains open. The opening line to s1(1) reads: '"occupational detriment", means any conduct relating to the working environment of an employee which adversely affects that employee, including -'. The Chair remarked that this definition was very descriptive.

Mr Mzize (IFP) observed that this refers to the employment relationship exclusively. He stated that from his understanding, the protection of the Bill should be available to everybody. He questioned whether the labour laws were simply being repeated.

The Chair responded that in other jurisdictions, whistle-blower legislation does not go wider than the employment relationship. He remarked that this Bill does not duplicate existing labour laws. This Bill functions as a shield - to give protection to the person making the disclosure.

The Chair noted that in the Committee's Resolution, there should be an indication that the Bill is confined to the employment relationship, but that the Committee is not opposed to extending the ambit of those entitled to protection. However, much research needed to be done before the ambit of protection could be extended beyond the employment relationship.

The Chair invited further comment regarding the definition of 'occupational detriment'.

Mr de Lange noted that the old s1(i)(d) has been split into the new ss(1)(e) and (h). The new (h) is a catch-all provision.

The Chair questioned whether, if (h) is a catch all provision, it is necessary that the list of situations in s(1)(i)(a)-(h) should be open. If the list is open and a catch-all phrase is used, this leaves the definition too wide for the courts to interpret. He suggested using the phrase 'occupational detriment.... means... ' rather than 'includes...' and remarked that this would make the definition more specific. He invited comments.

Dr J Delport (DP) stated that, if (h) caters for other possibilities of conduct that has an adverse effect, the opening paragraph (which introduces an open list) is repetitious. He suggested that 'including' should be deleted.

The Chair noted that, while a definition is required which does not set out a completely closed list, this list should not be too wide. The Chair then proposed a formulation: '"occupational detriment", in relation to the working environment, means...'.

Mr M Masutha raised concerns regarding s1(i)(g) - being denied appointment or election to an office. He stated that appointment to an office, for example to the office of a director, falls outside the employment relationship - a director is not an employee of a company.

The Chair questioned whether this, in fact, falls outside the employment relationship. The definition refers uses the phrase 'in relation to the working environment'. The Bill should protect people adversely affected in the working environment. If the reason for not being appointed to a directorship is whistle-blowing, a person adversely affected in this way should be afforded the protection of the Bill.

Ms S Camerer (NNP) brought up the situation of an auditor and an outside director. The Chair questioned whether auditors could be regarded as whistle-blowers - they have a legal to make certain disclosures. He stated that more research is required here.

The issue of the outside director was discussed. The Chair remarked that whether such a person is regarded as an employee depends on the definition of 'employee'.

Dr Delport stated that there needed to be clarity. He stated that the Bill is not concerned with, for example, witness protection programs or the laying of a charge. Instead, the Bill addresses a specific situation: "the small man who splits or tells on".

The Chair regarded this as an important point. The Bill should deal with situations of uneven power relationships - people in positions of power are in a position to push their own agenda. He noted that there is broad agreement on the type of concept of 'detriment' that is required. There needs to be some rewording and the Chair noted that Mr de Lange would look at the question of office bearers.

Mr de Lange noted that the old s1(i)(g), dealing with threats, has been deleted. He stated that these situations will be covered by the new s1(i)(h).

The Chair suggested that the old (g) should be reinserted before (h). He remarked that these situations should be mentioned specifically rather than leaving it to the courts to imply.

Ms Chohan-Khotha raised a grammatical concern with the new draft of the definition. She doubted whether the use of 'to be' at the beginning of each of the listed situations was correct and suggested using 'being'.

Section 1(ii) - 'disclosure': The Chair noted that the change from 'relevant information' to 'information concerned' is an improvement.. Regarding s1(ii)(c), he expressed a preference for the original formulation over the options. The original formulation is familiar.

Regarding s1(ii)(e), the Chair remarked that he was originally in favour of including the words 'in an unlawful manner', but that he was no longer certain. He stated that the inclusion of the words would narrow the scope of the Bill considerably. He stated that there were enough safeguards in the Bill - the whistle-blower must go through one of "the doors" before the situation can be regarded as a whistle-blower situation. He concluded that the checks and balances in the Bill are perhaps sufficient and that the exclusion of the words 'in an unlawful manner' would not be a problem.

Mr de Lange stated that he was "divided fifty-fifty" over whether the words should be deleted. He remarked that the Chair was probably correct in saying that there are sufficient checks and balances in the Bill.

Ms Chohan-Khotha stated that she was also in agreement. She remarked that if the words are included there would be a range of situations that would not attract the protection of the Bill - there would be a legal 'vacuum'. The inclusion of the words would create an unnecessary barrier.

The Chair repeated his point that the Bill, in requiring a person to go through one of "the doors", sets up sufficient barriers and that there was more or less agreement that the words should be omitted.

Mr Masutha used the example of a company that pumps poisonous gas into the air. This may be a legal activity where no delictual action would be available. However, a particular method of pumping the gas may be disclosed to the media. This could give rise to negative publicity and may damage the company's business. The person who made the disclosure may then be subject to some form of detriment. He stated that the question is whether such a person should be protected. If it has been decided that such a person is to be protected, the words 'in an unlawful manner' should be deleted.

The Chair noted that it has been agreed that the protection of the Bill is provided by going through one of "the doors" and that the protection is not related to the type of information disclosed.

Ms Chohan-Khota noted that s1(ii)(e) provides a test - it must be shown that the environment has been or 'is likely to be' damaged.

There were no further comments regarding s1(ii). Section 1(ii)(c) will remain as originally formulated (the options are to be deleted). There was agreement that the introductory paragraph should read 'information concerned' and not 'relevant information'.

Section 1(iii) - 'employee': The Chair noted that Mr de Lange would take the Committee through the various options and that he should indicate which definitions are the broadest, which are the narrowest and which reflect the current employment situation.

Ms Camerer proposed that the original draft should be changed to read 'or who receives... remuneration' rather than 'and who receives... remuneration'. A person who is employed receives remuneration in any event.

Mr de Lange remarked that all the examples of the definitions of 'employee' did not need to be discussed. The crucial issues were independent contractors and interns.

He noted that the Labour Relations Act definition seems best. It expressly excludes independent contractors and requires there to be remuneration. He observed that the definition in the original draft is similar to this, but it does not expressly exclude independent contractors. He remarked that the LRA definition is clearer than the original draft.

He remarked that the definition in the Business Act is on the opposite end of the spectrum - it is very wide and the second part of this definition does not require there to be remuneration.

The definition in the Manpower Training Act is also very wide, but it does include the requirement of remuneration. It therefore excludes interns, but it includes independent contractors.

He stated the choice was ultimately between the original formulation, the LRA definition and the Business Act definition.

The Chair remarked that the LRA is clearer than the original draft. It has three elements: a) work performed, b) remuneration and c) assistance in the carrying on of the business. The Business Act does not mention the assistance element.

Mr de Lange noted that the Business Act would cover the situation of the intern. However, he did not regard it as important to provide for the intern situation, as this consideration was only relevant when indemnity from criminal and civil liability was proposed.

Mr Mzize (IFP) asked about the position of the subcontractor.

The chair responded that the employees of the subcontractor would be regarded as employees for the purposes of the Act, but that they are treated as employees of the subcontractor and not of the main contractor.

The Chair excused himself and Ms Chohan-Khota took over the chair. She noted that in previous discussions it had been pointed out that an intern might be vulnerable when he or she is, for example, denied a reference. She cited Ms Botha's example where an intern works for an NGO but receives sponsorship or remuneration from another source. Such an intern who makes a disclosure regarding the NGO may be vulnerable and may suffer a detriment. He or she may be at the beginning of his or her career and his or her career prospects may be prejudiced.

Mr de Lange conceded that an intern could suffer detriment, albeit limited, and that interns should therefore be protected.

Mr Masutha noted that remuneration might not be commensurate to, or constitute consideration for, the work done. He cited the example of a volunteer who receives an "allowance" and questioned whether such persons would be protected.

The Chair noted that this was a point, but that this stepped outside the employment relationship. She distinguished between the intern and the volunteer by noting that an intern would typically be at the beginning of his or her career, and that the prejudice to his or her future career is where the potential detriment lies.

The Chair suggested moving on to the question of the independent contractor. Ms Camerer noted that it had been agreed to leave contractual relationships outside the scope of the Act. The Chair agreed and noted that independent contractors must therefore be excluded.

Mr Masutha remarked that these persons are protected by their contracts. The Chair added that they are provided with further protection through other parts of the common law and other statutes. She requested that the Committee move on to the next issue.

Ms Camerer requested clarity on the position. The Chair responded that independent contractors would be excluded from the scope of the Act and that interns would be included.

Ms Camerer repeated her proposal that 'and' (which preceeds 'receives... remuneration' in the original draft) be changed to 'or'. The Chair noted that this would be included as an option.

Section 1(i)(iv) - 'employer': Mr de Lange noted that this definition was perhaps more important than the definition of 'employee' as the term 'employer' is referred to more often. He noted that the new draft presents various definitions from different statutes, but stated that the choice was essentially between the definition in the Business Act and the definition in the Occupational Health and Safety Act. He suggested that the Committee should also consider the option of adding 'and any person acting on behalf of or on the authority of such employer' to the definition.

He noted that the definition in the original draft would exclude interns. The Business Act, on the other hand, defines an employer as one who permits a person "to assist in the carrying on or conducting of his business'. This would include an intern.

Ms Camerer suggested simply changing 'and remunerates' in the original draft to 'or remunerates'. The Chair stated that this would be included as an option.

Mr Masutha questioned the position of the intern. A student who has to work in a company as part of his or her training is regarded as an intern. However, there are two possibilities regarding the payment of such a student. Firstly, the company could remunerate the student and secondly, the institution that sent the student could pay him or her an allowance. He asked who the employer would be in this situation.

The Chair responded that the option which proposes adding 'and any person acting on behalf of the employer' to the definition of 'employer' caters for this situation.

Mr Masutha remarked that the option is directed at the employer who prefers not to deal with human resources issues in his or her company and engages the services of another to deal with these issues.

The Chair proposed a discussion regarding whether the definition of employer should be restricted to those who offer remuneration or whether the definition should be broader. If employers are to be reported to, it is important to know who the employer is. She repeated the difficulty with Mr Masutha's example of the third party institution that sends a student to a company to undertake training, and the third party pays an allowance.

Dr Delport stated that remuneration should be the key. The bill is designed to protect whistle-blowers from intimidation. A volunteer cannot be intimidated in the same way as an employee - the volunteer can simply leave because he or she is not financially dependent on the employer.

The Chair remarked that Dr Delport's argument deals with volunteers but does not address the question of interns. Dr Delport stated that he would think about the issue.

Imam G Solomon (ANC) suggested using the original definition, adding the option ('and any person acting on behalf of the employer') and then inserting an express inclusion of interns.

The Chair remarked that this would raise the possibility of unintended consequences. If a particular definition of 'employer' is adopted simply because it includes interns, the definition may be opened wide enough to include independent contractors. She stated that it is desirable to include the intern situation, but that the consequence of leaving the definition too wide should be avoided.

The Chair remarked that the option (adding 'and any person acting on behalf of the employer') was attractive - it covers supervisors etc. It also takes into account internal procedures. The question does arise, however, as to whom the disclosure should be made - the immediate supervisor or the ultimate employer?

Adv de Lange returned to the Chair.

Section 1(v) - 'impropriety': Referring to "O1" - the option, the Chair noted that 'by an employer or an employee of that employer' has been deleted, as it is unnecessary. A new paragraph (c) has been added. This provides that the impropriety may have occurred before or after the implementation of the Act. This must be read with section 2(3), which provides that the protected disclosure must have been made after the implementation of the Act.

Mr de Lange noted that the retrospectivity of the impropriety is found in the Australian legislation. It covers the situation where, for example, money is stolen before the implementation of the Act. The Act would apply here, but only if the disclosure regarding this conduct is made after the implementation of the Act.

The Chair noted that there was no problem with covering conduct that has occurred prior to the implementation of the Act. He stated that there should be an indication that section 1(v)(c) is 'subject to section 2(2)', but accepted that such a formulation could not be used in the definitions section. He asked whether it would not be safer to remove paragraph (c) from s1(v) and to insert it into s2(2).

Mr Lange doubted whether this would make a difference. The Chair said he was concerned with two separated clauses dealing with retrospectivity and the application of the Act. He stated that there was no disagreement regarding the principles, but that problems could arise in the Act's interpretation.

Mr de Lange stated that he would look at the possibility of bringing s1(v)(c) under s2(2) and would investigate other alternatives.

The Chair noted that, while there are no contradictions in the current formulation, a contradiction could be implied in the interpretation process.

Imam Solomon observed that the two separate sections seem to disconnect 'impropriety' and 'disclosure'. He asked whether these two concepts are not linked.

The Chair stated, while there is a logical connection, there some disconnection. One aspect of a disclosure concerns the actions of the employee and the other concerns the actions of the employer. Impropriety refers to the actions of the employer.

The Chair stated that the further matters were being discussed, the more it appears that way it is drafted is correct. He stated, however, that it should be considered how the formulation could be made clearer.

The Chair noted that Mr R Calland's (idasa) suggestion regarding the 'concealment' element has not yet been included.

Section 1(vi) - 'organ of state': The word 'when' has been included in paragraph (b).

Section 1(viii) - 'protected disclosure': The Chair noted that change in paragraph (a) is correct.

Dr Delport raised the suggestion of bringing the express exclusions in section 10 under the definition of 'protected disclosure'.

Mr de Lange remarked that the Committee had previously elected to provide, in sections 5-9, that each section is subject to section 10. He stated that there is no problem with including section 10 under the definition of 'protected disclosure', but that there may not be the same impact when the lay person reads through the Bill.

Dr Delport commented that he did not feel very strongly about this issue.

The Chair noted that the definition of 'protected disclosure' deals with procedure, while section 10 deals with substance. He stated that it would be preferable not to mix the two. However, if mixing the two does work, the issue could be given further consideration.

The Chair noted that paragraph (e) is a further issue regarding s1(viii). It refers to disclosures made any person in accordance with s9. Section 9, however, concerns disclosures made to persons and bodies. There is an inconsistency that could be solved by inserting 'or body' behind 'person'.

Mr Masutha suggested using the term 'functionary or institution'. The chair noted that this term is restricted to government, while the concern here is also with the private sector. The Chair noted that there must simply be consistency and uniformity. He suggested that a better way of dealing with this might be to consider it in section 9.

Conclusion - section 1
The remaining definitions did not present any problems. The chair noted that there was general agreement on most of the definitions, except 'employer' and 'employee', which must still be decided upon.

Section 2 - Objects and application of the act
Section 2(1)
- The Chair stated that a discussion of this subsection would be left to the end of the discussion of the draft, together with a discussion of the preamble. Section 2(1) and the preamble have not been finalised.

Section 2(3) - The section provides that a clause in an agreement that purports to exclude any provision of the Act is void. The Chair questioned whether the concern was with clauses that exclude provisions of this Act or rather with agreements that exclude the consequences of the Act. He questioned whether a sanction was required in addition to providing that the agreement is void.

Mr de Lange responded that the provisions of the Act include the consequences. Regarding further sanctions, he stated that he had not come across further sanctions in other jurisdictions.

The Chair remarked that voidness probably acts as a defense and no further remedy is required.

Ms Camerer questioned whether 'muzzling provisions' could not be directly addressed and made void.

The Chair noted that the Bill goes wider than addressing confidentiality agreements. Section 2(3) provides that a person cannot exclude, for example, clause 9, which allows a whistle-blower to go to the media. He noted that the Bill is not an attempt to affect restraint of trade agreements. Rather, the Bill deals with information that constitutes a protected disclosure.

Ms Camerer remarked that she was not convinced that s2(3) is sufficient.

Mr Masutha raised a possible scenario where the Act could be undermined by agreement. This situation would arise where the provisions of the Act are not excluded by agreement, but it is agreed that a special procedure should be followed for making a disclosure. For example, the procedure could require the employee to give notice to the employer before going to the media. The employer would argue that this does not exclude s9.

The Chair remarked that this was an interesting point - the agreement may not exclude the Act but may put up barriers. Mr de Lange stated that he was not sure about this and that he would look at this issue.
Dr Delport remarked that the reading of this paragraph is difficult because of the repeated use of 'or'. The Chair agreed.

The Chair noted that, because s2(3) is simply stated, it may have consequences when interpreted that are not contemplated. He stated that the tricky issue was Mr Masutha's point. If a person is clever, he or she will not try to exclude a provision of the Act but will add conditions that would change the operation of a provision. He stated that this issue requires attention and that Mr de Lange has a difficult task in this respect.

Section 3 - Employee making protected disclosure not to be subjected to detriment.
The Chair commented that it has been decided not to go for criminal or civil liability. The Bill rather protects a person who makes a disclosure from suffering detriment. The Bill attempts to protect the small person in the employment relationship. It has been discussed in detail whether defamation should be protected. It has been decided that defamation will not be protected - protecting defamation would encourage it. The belief that the information disclosed is 'substantially true' (ss8 & 9) is what should guide the discloser and provide him or her with protection. He noted that the old subsection (b) has now been included in the definition of 'detriment' and the old subsection (a) has been omitted.

Ms Camerer asked whether the phrase 'suffers loss or damage' should not be used here. The Chair responded that damages did not need to be mentioned because this is covered by civil law.

The Committee discussed the issue of defamation. The Chair emphasised that defamation is not to be protected. He stated that it is 'wrong' to give employees the right to defame and to then protect them. Protection will only be afforded if something is disclosed which the discloser reasonably believes to be substantially true.

A brief discussion of not affording protection to disclosures made for personal gain followed. The Chair noted that there is the view that these people should be protected. However, the British model, which does not afford protection, is preferred - it makes a person think twice before making a disclosure. He noted that there is a healthy balance.

Ms Botha, in response to the persistent reference to 'small man', suggested that it should be provided that the Bill is to protect the 'small man and woman'. The Chair responded that this could be captured in the preamble.

Section 4 - Additional remedies
The Chair noted that s4(1) will be included in the Resolution. He noted that Dr Delport's option should also be included in the Resolution. He remarked that a broad clause is required here - a clause that provides for the availability of general remedies.

Regarding Option 2, Mr de Lange remarked that the Labour Department seems to believe that these remedies are available. He stated that they could remain in the Bill and that they do not affect the remedies available in labour law.

The Chair concluded that Mr de Lange would formulate new wording for s4(1) and that this would be included in the Resolution, as would Dr Delport's suggestion. He noted that this issue required further discussion, as did the issue of defamation.

The matter of defamation was briefly discussed again. The Chair provided a warning: the intention to protect whistle-blowers may be a good one, but not all whistle-blowers are angels. He stated that there are two sides to the equation and that the employer's dignity must be protected. He stated that there should be extensive research before the employee is given the right to defame.

The Chair concluded meeting.

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