Gear up now for a new whistleblower law

Wednesday 2 November, 2022

Whistleblower legislation has been updated for the first time in 22 years to protect people who come forward and report serious wrongdoing in the workplace.  

The Protected Disclosures Act 2022 is a positive change for New Zealand and should instil greater confidence in employees that workplace issues will be dealt with through a robust process.

The government has chosen not to make it mandatory for businesses to have a whistleblower policy - avoiding extra compliance in the workplace. But it’s still something that businesses should consider. Having an effective whistleblower policy can make life easier for businesses, and organisations have the flexibility to develop a policy to suit their business.

A quick recap of what’s changed

The Protected Disclosures Act 2000 was created to facilitate the disclosure and investigation of serious wrongdoing in the workplace.

One of the main complaints with this legislation was that it was complex and lacked clarity on what happens when there is serious wrongdoing in the workplace. In the end, the legislation wasn’t doing what it set out to achieve: to give whistleblowers (or ‘disclosers’) the security they need to come forward.

The changes to the Protected Disclosures Act are all aimed to help businesses – big and small – if and when a whistleblower drops a bombshell.

The 2022 edition has been updated with a clearer definition of “serious wrongdoing”. It also has much clearer guidance and obligations for ‘receivers’ of disclosures.

The updated legislation also increases protections for disclosers, including protecting the whistleblower’s identity - even through the Official Information Act or Local Government Information Act process - and ensuring they won’t be treated unfairly or face retaliation for coming forward. The whistleblower is entitled to protection even if they were  mistaken and there was no serious wrongdoing (as long as the discloser was made on reasonable grounds and not in bad faith).

Not mandatory, but equally, not insignificant

While public sector organisations must have internal practices in place for protected disclosures, the New Zealand Government chose not to mandate whistleblower policies for private businesses,  unlike Australia where whistleblower policies are compulsory for public and large proprietary companies and there are strict penalties for non-compliance.

The decision is not surprising given the majority of businesses in New Zealand are small to medium size enterprises, and many are already dealing with a raft of challenges and regulatory compliance issues enacted in recent years.

However, not having a whistleblower policy can pose a serious risk to both the business and the whistleblower. Businesses must be aware of their obligations to whistleblowers and comply with their responsibilities under the Protected Disclosures Act.

The benefits of having a whistleblower policy are that it sets out the framework for dealing with serious wrongdoing, and gives the discloser comfort that misconduct will be taken seriously in the organisation. It also gives clarity to both sides of the party around to whom the disclosure should be reported, the timeframe for considering the disclosure, and how the disclosure will be dealt with.

Another benefit of a whistleblower policy is that it fosters an internal culture of trust where employees can feel confident that the organisation values openness and honesty in the workplace and will act in good faith in protecting whistleblowers.  

Media misses out on whistleblowers

Another key difference between New Zealand’s and Australia's whistleblower legislation is that whistleblowers in Australia can disclose to parliamentarians and journalists provided they satisfy the threshold for disclosure.

Here in New Zealand, anyone exposing wrongdoing to the media will have no protection.

It’s arguable that in some cases, there is a place for disclosure to the media, particularly in an emergency or when public health or safety is at stake. However, disclosure to the media should be a last resort, and only if the employer or authority is not dealing with the disclosure appropriately.

Lack of protection from retaliation may not always discourage a whistleblower from going to the media or other external agencies. In some cases, a whistleblower may intentionally make their identity public to drive change.

Fostering an organisational culture of trust means whistleblowers are more likely to feel comfortable raising concerns in-house rather than approaching outside agencies.

The new legislation is already in force so it is in the best interest of your business to be prepared before a whistleblower comes forward.