Authors – Maricia Smith BA LLB and Zunaid Lundell BA(hons) LLB LLM – LHL Attorneys
Recent times have borne witness to the sharp increase in corruption and financial fraud across the world. Several global movements have galvanised as a response to such rampant corruption and financial greed, chief among which would be the “#MeToo” movement. In times when corruption is rife strong whistle-blower protection plays a critical role in protecting those who call corruption out and ensuring redress for those who are victimised as a result of making a protected disclosure. We explore whistle-blower laws in several jurisdictions to gain an understanding of whistle-blower protection internationally and how this compares to our laws in South Africa.
United Kingdom:
Does the specific country have a specialized statute or law that deals with whistleblowing? Or do various pieces of legislation deal with it only in specific sections?
Similar to South African legislation, The United Kingdom (UK) has a single dedicated whistleblower protection law.1 Protection for whistle-blowers is provided under the Public Interest Disclosure Act 1998 (PIDA) which amends the Employment Rights Act 1996.2 It can be argued that the protection provided in single dedicated laws, like the PIDA, provides more clarity and streamlines the processes and mechanisms involved in disclosing a wrongdoing.3
Under the PIDA, employees who make a protected disclosure are shielded from retaliation and can claim unfair dismissal before an employment tribunal if their contracts are terminated due to a disclosure.4
For an employee to receive protection, the disclosure must be made to an appropriate party for it to be valid and the disclosure must expose a criminal offence, a breach of contract or legal obligation, a miscarriage of justice, a danger to public health or safety, damage to the environment or the deliberate covering up of information relating to any of the above.5 When looking at the above grounds of illicit conduct it is clear to see that the South African legislators have borrowed heavily from the PIDA in drafting the South African Protected Disclosures Act 26 of 2000.
The Enterprise and Regulatory Reform Act 2013 (ERRA),amended the Employment Rights Act 1996 by introducing a public interest element that indirectly complements the PIDA legislation and thus changed the good faith test which is provided for by PIDA.6 It also extended whistleblowing protection to workers who have been bullied and harassed by coworkers because of making a protected disclosure.7
The UK government also introduced a witness charter that could apply to possible whistleblowers. The Charter sets out the standard of care that should be applied to all witnesses of a crime and to character witnesses.
Are the above whistleblowing laws aimed at both the public and private sector?
The PIDA applies to every employee in the UK whether they are in the private, public or the voluntary sector. In addition to employees, PIDA covers workers, contractors, trainees, agency staff, homeworkers, police officers and every professional in the NHS.9
Further, PIDA has extended its own jurisdictional purview by allowing workers to make disclosures about matters that occur outside the UK and which are not covered by UK law.10 It is clear that PIDA has a very broad scope of application.
Does the above law provide for anonymity and/or confidentiality?11
The PIDA protects confidential reporting rather than anonymous reporting. This reflects the school of thought that believes that anonymous reporting of information should not be encouraged. This argument is based on the premise that anonymous reporting may raise questions about whether or not the disclosure was made in good faith. It also it makes it more difficult to establish whether an action taken by an employer against a whistle-blower was actually a reprisal for legitimate whistleblowing.12
Does the above law provide an incentive to the employers to make a disclosure?
None of the key whistleblowing laws or institutions in the UK (except the UK Competition and Markets Authority) offer incentives for whistle-blowers to come forward with information regarding fraudulent and corrupt conduct. However, “according to Clive Howard, a senior principal lawyer at Slater and Gordon, incentives should be extended to the UK. He stated that, “Financial awards to whistle-blowers in the US, since the programme began, have surpassed $160m. So, there is very serious money being awarded to individuals from around the world who are blowing the whistle to the US government. It is disappointing that UK attempts to introduce a bounty award system, in addition to existing protection, have been rejected. It means the focus is still on the messenger and not the message, and that is the wrong focus.”13
United States:
The United States (the US) has been seen as the leading innovator when it comes to whistleblowing laws. Many argue that encouraging whistleblowing in the US can be traced back as far as the American Revolutionary War. 14
Does the specific country have a specialized statute or law that deals with whistleblowing? Or do various pieces of legislation deal with it only in specific sections?
The US does not have a unified approach to whistleblowing. There are various statutes on both federal and state level that deal with whistleblowing.
The best-known piece of legislation is that of the False Claims Act (FCA), which has been subject to amendment since its original adoption. The FCA allows both individuals and companies to institute an action on behalf of the US government if they have knowledge of fraud against the federal government.15 The success of the FCA can be linked to its incentive provisions, otherwise known as its qui tam provisions. The qui tam provisions incentivise whistle-blowers to report fraud by offering a percentage of any reward recovered from a successful lawsuit. The percentages usually range between 15-25%.
By inserting this type of provision, the government is acknowledging that it lacks the information and resources to pursue all claims submitted to it. It highlights that private citizen whistle-blowers are an important resource to provide evidence of corruption and fraud.16
Under the FCA, employees have the right to significant remedies if they have experienced detrimental treatment from their employer. These remedies include requesting reinstatement with seniority, double back pay covering the period from the date of dismissal to the judgment, special damages for discriminatory treatment, and reclaiming lawyers’ fees and costs.17
The Whistle-blower Protection Act 1989 is also a notable piece of legislation. This Act sets out the administrative procedures for employees who blow the whistle on wasteful or illegal activities in the federal government. 18
Other pieces of US legislation that include whistleblowing are the Sarbanes-Oxley Act19, The Wall Street Reform and Consumer Protection Act20, Defend Trade Secrets Act of 201621 and the Occupational Safety and Health Act 197022
Are the above whistleblowing laws aimed at both the public and private sector?
Most of the above laws relating to fraud and corruption are aimed at the public sector. However, the Sarbanes-Oxley Act (SOX) focuses on fraud and corruption in the private sector. It generally applies to all US and non-US companies that have securities registered with the US Securities and Exchange Commission (SEC).23
SOX does not specify a method of submitting complaints but has adopted far-reaching rules that aim to protect whistle-blowers who have some connection to publicly traded companies. SOX was the first law in the US to enact an anti-retaliation provision which gave a nationwide right to employees who faced wide-ranging types of retribution because they reported fraud. “The statute also requires in-house attorneys who have a reasonable belief that their companies are engaging in illegal behaviour to report their concern up the corporate chain of command.”24
SOX has been criticised on a variety of grounds, which include charges that it is unconstitutional, too costly and that it is not very effective.25
Do the above laws provide for anonymity and/or confidentiality?
The question of whistleblowing anonymity in the US came to the forefront in 2019, in terms of the Intelligence Community Whistle-blower Protection Act of 1998 (ICWPA), when a male CIA analyst filed a detailed complaint about US President Donald Trump’s phone call with the president of Ukraine and related events.26 Adam Schiff, the Chairman of the House intelligence committee investigating the incident, alleged that such intelligence community whistle-blowers have a statutory right to anonymity. However, ICWPA nor any related statutes have language guaranteeing anonymity for those types of whistle-blowers.27
Other statutes do permit anonymity, such as SOX- related complaints, in which an anonymous, confidential methods of reporting a complaint is required.
From the above it can be seen that there is not a unified approach to anonymity for whistleblowers in the US statues.
Does the above law provide an incentive to the employers to make a disclosure?
Yes, refer to paragraph 1 under the US on the explanation of the False Claims Act qui tam provisions.
Canada:
Does the specific country have a specialized statute or law that deals with whistleblowing? Or do various pieces of legislation deal with it only in specific sections?
Canada’s whistleblowing law, The Public Servants Disclosure Protection Act (PSDPA), was passed by the Canadian Parliament in 2005 and came into force in April 2007.28 The creation of this piece of legislation was largely reactive and scandal-driven as a result of the findings of the Gomery Commission.29 The Gomery Commission, a commission of inquiry into the Canadian government’s corrupt sponsorship programmes from 1997 to 2001 and its corrupt advertising activities from 1998 to 2003, highlighted the need to better protect public state employees who tried to expose corruption and served as motivation for the creation of the legislation. 30 The PSDPA is a specialized piece of legislation that tries to provide protection to whistle-blowers.
The PSDPA differentiates between ‘wrongdoings’ and ‘reprisals’. It creates two different mechanisms to deal with complaints of the above conduct. Wrongdoings can be described as the illegal or corrupt conduct that can be reported by a public servant to his or her supervisor or to the Commissioner.31 The Act established an independent Public Sector Integrity Commissioner. The Commissioner reports directly to Parliament and has powers to investigate alleged wrongdoing and reprisals.32 Section 8 of the Act provides a closed list of conduct that may be reported to the Commissioner.33
The PSDPA prohibits employers from taking retributive action against a public servant who has made a protected disclosure or has, in good faith, cooperated in an investigation into a disclosure or an investigation commenced under the Act.34 These retributive actions are known as ‘reprisals’. The Act also established a mechanism for complaints filed by public servants who have reasonable grounds to believe that a reprisal has been taken against them. The Commissioner has the power to hear these complaints, conduct investigations, and attempt to bring about a settlement between the parties. The Act also established the Public Servants Disclosure Tribunal, which can decide whether remedies and disciplinary action is necessary in terms of a complaint. 35
Are the above whistleblowing laws aimed at both the public and private sector?
The PSDPA initially only provided protection to public servants who made disclosures about wrongdoings or reprisals. However, in 2006 the Act was amended by the Federal Accountability Act (FAA) to also protect private sector employees who disclose wrongdoings within the federal public service. 36
It is important to note that only wrongdoing in the federal public service is covered/governed by these Acts. Whistleblowing relating to illegal or corrupt conduct in the private sector is not protected in these Acts. Canada does not have a single dedicated whistle-blower protection law that applies to both public and private sector employees.
The Whistleblowing Society of Canada argues that “to take full advantage of the potential benefit whistle-blowers can bring to preventing public harms and shoring up accountability and democracy in Canada, a broader approach to determining what and who is a whistle-blower is needed.”37
Does the above law provide for anonymity and/or confidentiality?
Section 44 of the PSPDA provides that ”unless the disclosure is required by law or permitted by this Act, the Commissioner and every person acting on behalf of or under the direction of the Commissioner shall not disclose any information that comes to their knowledge in the performance of their duties under this Act”. When interpreting this section in its plain language, one can assume that it provides that the Commissioner and his/her employees are required to keep protected disclosures from public servants confidential.
Like Belgium, Ireland, France and Norway, Canada`s whistleblowing Act does not provide anonymity to public sector whistle-blowers.38 In other words, the identity of the whistleblowers is not protected; only the information they provide is protected. 39
Does the above law provide an incentive to the employers to make a disclosure?
The PSDPA does not provide whistle-blowers with incentives to report crimes.
However in the state of Ontario, the Ontario Securities Commission (OSC) provides incentives for those who report corporate misconduct. The provision is similar to the US SOX incentive programme. This program is the only of its kind in Canada, “No such ‘bounty for information’ programme exists in the criminal or anti-corruption sphere, or in any other Canadian jurisdiction except Ontario”.40
The Quebec Securities Commission (known as the Autorité des marchés financiers, or ‘AMF’) also launched a whistle-blower program. However, unlike in Ontario, the AMF’s approach will only be based on confidentiality, anti-reprisals and anonymity for whistle-blowers but will not provide incentives for whistle-blowers who report violations of AMF laws.41
Conclusion:
From the above, it can be concluded that each country has its own approach to whistle-blowing policies. The United States may have the most innovative laws in terms of the FCA incentives but the multiplicity of federal and state laws relating to whistle-blowing may lead to confusion and reflects a fractured approach to disclosures.
The United Kingdom has crafted a unified legal approach through PIDA which provides clarity to whistle-blowers and legal practitioners but the legislation does not make use of incentives to motivate employees to report fraud or corruption. However, it must be noted that the PIDA applies to both the private and public sector broadly. Something that the US and Canadian whistle-blowing laws do not do.
Canada’s PSDPA applies mostly to federal employees and does not provide incentives to employees to disclose information.
1 The Public Interest Disclosure Act 1998 applies in full to England, Wales and Scotland, but only Section 17 is in force in
Northern Ireland. As a devolved jurisdiction, Northern Ireland has a distinct statutory instrument, the Public Information
Disclosure (Northern Ireland) Order 1998.This reflects the rest of the Act and was made only for purposes corresponding to the
PIDA 1998.
2 E Collins, M Culver, P H Janofsky & Walker ‘Rights and protection for whistle-blowers’ (2006) 2 Practical Law Article UK 1 at
8.
3 Organisation for Economic Co-operation and Development (OECD) ‘Committing to Effective Whistleblower Protection –
highlights booklet’ (2016) 4.
4 Collins & Culver Op cit note 1 at 8.
5 Katie Yahnke ‘A Practical Guide to Whistleblower Protections in 2020’ available at https://i-sight.com/resources/a-practicalguide-to-whistleblower-protections/ accessed on 15 May 2020.
6 ‘Enterprise and Regulatory Reform Act 2013 Section 17’ available at
http://www.legislation.gov.uk/ukpga/2013/24/section/17/enacted accessed on 18 of May 2020.
7 Nick Maxwell, Ben Cowdock & Philip Jones (ed) ‘Corruption Laws – A non-lawyers guide to laws and offences in the UK
relating to corrupt behaviour’ (2016) 48; Enterprise and Regulatory Reform Act 2013 Section 19 available at
http://www.legislation.gov.uk/ukpga/2013/24/section/19/enacted accessed on 18 May 2020.
8 Maxwell and Cowdock Op cit note 7 at 50.
9 Blueprint for Free Speech ‘United Kingdom – Whistleblowing Protection’ available at
https://blueprintforfreespeech.net/document/united-kingdom/ accessed on 15 of May 2020.
10 Ibid.
11 The notion of anonymous reporting is debated; some consider it a safer avenue for individuals to come forward, while other
remain sceptical regarding the extent of its protection and argue that anonymous disclosures shows a lack of trust in the
whistle-blower protection system and an organisation’s integrity – OECD Op cit note at 5.
12 Blue Print for Free Speech Op cit note 9.
13 Richard Summerfield ‘Whistleblowing in the UK’ in Financier Worldwide Magazine (2018) available at
https://www.financierworldwide.com/whistleblowing-in-the-uk-feb18#.Xr6JDmgzZ1s accessed on 15 May 2020.
14 David Schultz & K Harutyunyan ‘Combating corruption: The development of whistleblowing
Laws in the United States, Europe, and Armenia’ (2015) 1 International Comparative Jurisprudence Articles 87 at 89.
15 Collins & Culver Op Cit note 2 at 12; Berger & Montague ‘False Claims Act’ available at https://bergermontague.com/federalfalse-claims-act/.
16 Pietragallo Gordon Alfano Bosick & Raspanti, LLP “ Federal False Claim Act available
https://www.falseclaimsact.com/federal-false-claims-act/ accessed on 30 March 2020.
17 Collins & Culver Op cit note 2 at 12.
18 Ibid.
19 Sarbanes-Oxley Act
20 https://www.sec.gov/about/offices/owb/dodd-frank-sec-922.pdf
21 http://www.mondaq.com/unitedstates/whistleblowing/526468/the-whistleblower-protections-of-the-defend-trade-secrets-actcould-have-a-broad-impact–but-only-if-employees-are-told-about-them
22 https://www.whistleblowers.gov/statutes
23Collins & Culver Op cit note 2 at 13.
24 Schultz & Harutyunyan Op Cit note 14 at 90.
25 Terry Morehead Dworkin “SOX and Whistleblowing’ (2007) 105 Michigan Law Review 1757 at 1758.
26 Salvador Rizzo ‘Schiff’s claim that the whistleblower has a ‘statutory right’ to anonymity’ in the Washington Post Newspaper
available at https://www.washingtonpost.com/politics/2019/11/20/schiffs-claim-that-whistleblower-has-statutory-right-anonymity/
accessed on the 15th of May 2020.
27 Ibid
28 Chloe Forget & Elise Hurtubise-Loranger ‘In Brief: Federal Public Sector Whistleblowing’ (2015) No. 2008-63-E Library of
Parliament,Ottawa, Canada at 1.
29 OECD Op Cit note 3 at 2.
30 Forget Op Cit note 28 at 1.
31 Ibid at 2.
32 Ibid.
33 Section 8 of the PSDPA: Act applies in respect of the following wrongdoings in or relating to the public sector:
(a) a contravention of any Act of Parliament or of the legislature of a province, or of any regulations made under any such Act,
other than a contravention of section 19 of this Act.
(b) a misuse of public funds or a public asset.
(c) a gross mismanagement in the public sector.
(d) an act or omission that creates a substantial and specific danger to the life, health or safety of persons, or to the
environment, other than a danger that is inherent in the performance of the duties or functions of a public servant.
(e) a serious breach of a code of conduct established under section 5 or 6; and
(f) knowingly directing or counselling a person to commit a wrongdoing set out in any of paragraphs (a)
to (e).
34 Lawrence E. Ritchie, Kaeleigh Kuzma, Malcolm Aboud, Sonja Pavic, Fabrice Benoît, Frédéric Plamondon and Riyaz Dattu
for Osler Hoskin & Harcourt LLP ‘Whistleblowing in Canada’ (2019) Lexology Global available at
https://www.lexology.com/library/detail.aspx?g=e7991ff7-a432-4f34-b6e8-4773a06a7846 accessed 17 February 2020.
35 Forget Op Cit note 28 at 3.
36 Ibid at 2.
37 Pamela Forward ‘Who is a Whistle-blower? Pressing Need for Changes in Canada to defend democratic institutions’ (2019) 1
Whistleblowing Canada Research Society 1.
38 OECD Op Cit note 3 at 6.
39 Ibis at 5.
40 Lexology Op Cit note 34.
41 Ibid.
