The Protected Disclosures Act 2022

Under new whistleblower legislation (the Protected Disclosures (Protection of Whistleblowers) Act 2022), making disclosures about an organisation's wrongdoings will be easier while whistleblowers will receive increased protection. A key improvement in the new Act enables a person, from any organisation or business, to make a protected disclosure direct to an appropriate authority at any time – instead of needing to disclose to their employer first. The legislation also extends and clarifies the grounds where protected disclosures can be made to cover wrongdoing in, or by, any organisation, including small businesses, government agencies, and non-government associations.

Introduction

The Protected Disclosures (Protection of Whistleblowers) Bill introduced into parliament in 2020 received royal assent on 13 May 2022 and will repeal and replace the Protected Disclosures Act 2000 (PDA) on 1 July 2022.  This will be known as the Protected Disclosures (Protection of Whistleblowers) Act 2022 (Act). The new Act continues the PDA’s purpose which is to facilitate the disclosure and investigation of serious wrongdoing in or by an organisation (also known as whistleblowing), and provide protection for people who disclose in accordance with the Act.

For greater clarity, the bill was proposed as a complete redraft because of the extent of changes between the PDA and the bill.

Background

New Zealand is seen as a world leader in integrity, transparency and openness. It has for many years been ranked the least corrupt country in the world and in the latest Transparency International - Corruption Perceptions Index 2021 shares this record alongside Denmark and Finland.

New Zealand was one of the first countries in the world to introduce dedicated whistleblower protection legislation in 2000. Unlike many other jurisdictions, the PDA applied to the public and private sector and a broad range of “employees” were covered, including former employees, contractors and volunteers.

A 2017 State Services Commission review of the PDA identified a lack of clarity with the existing regime, and highlighted a number of issues with the PDA including:

• confusion around when the PDA can be used, how to manage multiple concerns from the same employee, and how the PDA fits with related legislation and regulation
• fear that speaking up will expose a staff member to acts of retaliation or mistreatment
• staff not always knowing who they can talk to within their organisations or having no internal procedures to follow
• confusion around which external authority an employee can report to and when
• uncertainty around the extent of whistleblowing in New Zealand (as organisations were not required to report on how many disclosures have been made under the PDA).

Further consultation on options for change to the PDA took place in late 2018, resulting in the Protected Disclosures (Protection of Whistleblowers) Bill being introduced in June 2020.

The 2022 Act

The new Act, which comes into force from 1 July 2022:

• extends the definition of ‘serious wrongdoing’ to cover private sector use of public funds and authority, and expressly includes behaviour that is a serious risk to the health and safety of any individual – this could apply in situations of bullying and harassment
• enables people to report serious wrongdoing directly to an appropriate authority at any time, while clarifying the ability of the appropriate authority to decline or refer the disclosure
• strengthens protections for disclosers by specifying what a receiver of a disclosure should do
• clarifies the potential forms of adverse conduct disclosers may face
• clarifies internal procedures for public sector organisations, and requires them to state how they will provide support to disclosers.

As in the PDA, every public sector organisation is required to have procedures in place to manage disclosures, however there are no similar requirements for private sector organisations or not-for-profits. No criminal, civil or disciplinary proceedings can be taken against anyone making a disclosure in accordance with the Act.

New Zealand’s Chief Ombudsman, Peter Boshier says the passing of new whistleblower legislation will help reinforce New Zealand’s international reputation as a free and transparent society.

Ombudsman welcomes passage of Protected Disclosures Bill 10 May 2022

“Insiders are usually the first to know about serious wrongdoing in the workplace. Every worker in New Zealand needs to know if they make a disclosure it will be taken seriously and action will be taken. The new legislation builds on the previous provisions and provides some additional protections for whistleblowers”.

Mr Boshier says it is important for people to feel they can raise these serious issues in confidence and that they won’t be punished for bringing them to light.

“Our reputation as an honest society free from corruption depends on it.”

What’s in it for directors?

In addition to the Act enhancing NZ’s international reputation as a transparent and honest society free from corruption, the Act is designed to support people who expose criminal, fraudulent or other serious misconduct in their workplace by protecting them from unfair dismissal or treatment.

This is a reminder that a strong ethical focus needs to be seen coming from the top to be embedded in an organisation. Boards have a key role in setting the tone for the organisation including by defining and leading the organisation’s ethical framework, purpose, values and culture. The board’s own culture and character underpins trustworthy leadership. As the IoD noted in its 2018 submission on the bill: 

“Boards set the tone for ethical conduct by reinforcing and communicating a culture of speaking up. They also hold management to account on transparency and accountability on ethical behaviour. Whistleblowing policies and speak-up procedures help promote and support an ethical workplace culture. Our 2018 Director Sentiment Survey shows that 44% of directors discussed whistleblowing and how their organisation makes speak-up provisions effective in the last 12 months, up from 32% in 2017. We are very supportive of improving whistleblowing and speak-up procedures and have been promoting this with our members”.

Directors should familiarise themselves with the changes in the Act and ensure their organisations review and update internal whistleblowing procedures for consistency with the Act before 1 July 2022.

• Every public sector organisation must have appropriate internal procedures that set out a process for the organisation to follow as the receiver of a protected disclosure, identify who in the organisation a protected disclosure may be made to, and describe the protections available under the Act and how the organisation will provide practical assistance and advice to disclosers. As a result of the additional requirements of the new Act, all public sector organisations will need to review and update their procedures for the implementation of the new Act.
• Private sector organisations are not required by the Act to establish internal procedures for protected disclosures, but it is highly recommended they do so.
• Private sector organisations must follow the provisions of the Act including those as a receiver of a protected disclosure.
• Some private sector organisations may be “appropriate authorities”. For example an appropriate authority as defined in the Act includes the membership body of a particular profession, trade, or calling with the power to discipline its members. Any such body should handle a protected disclosure in accordance with the requirements in the Act.
• While private employers are not required to have whistleblowing procedures and policies under the Act, it is good governance practice for directors to ensure their organisation has a policy on protected disclosures for both employees and contractors. The policy should be communicated to all workers, and incorporated in to their employment agreements.
• It would be wise for organisations to revisit their existing bullying and harassment policies.

Refer also to the guidance provided by the Public Sector Commission on the new Act:

Protected-Disclosures-Act-2022-Guidance 

Protected-Disclosures-Act-2022-Summary-of-Guidance