Whistle-blower Protection: Does South Africa Match Up? - Part IV

Introduction

The last instalment in this four-part brief series will continue with examining the procedures contemplated in the Protected Disclosures Actⁱ (“PDA”) to protect whistle-blowers in the public and private sectors, comparing them against the best practice standards set out in the best practice guidelines for whistle-blowing legislation (“TI Guidelines”) published by Transparency International. It will also provide some concluding remarks regarding the approach the legislature should adopt towards such protections going forward.

Investigation of disclosures

The act of whistleblowing would be meaningless without investigation. Investigatory procedures must be regulated to ensure that disclosures are investigated timeously, diligently, and consistently. It is important that whistle-blowers have confidence that their disclosures will be acted upon. The TI Guidelines state that there is a duty on the body receiving the disclosure (whether internal or external) to assess its merit and to determine whether further investigation is warranted.

To minimise delay from the time that the disclosure is received, the TI Guidelines recommend that organisations devise a procedure for dealing with disclosures that set out time limits. The PDA provides that a decision must be taken whether to investigate or refer a matter – and the whistle-blower must accordingly be informed of the decision – within 21 days of the disclosure being made. If this cannot be done within that time period, the body that received the disclosure must inform the whistle-blower of this and periodically notify him or her that the matter is still pending. A decision whether or not to investigate the matter must, however, be made within six months after the disclosure is made. The imposition of time frames adds much needed structure to the process of investigation. However, it must be noted that should an investigating body not comply, the PDA contains no enforcement mechanisms or sanction that can be used by whistle-blowers.

Once a whistle-blower makes a disclosure, the matter should not end there for him or her. The TI Guidelines suggest that whistle-blowers should be informed as to the outcome of their disclosure. The PDA makes provision for this in section 3B(4). Some jurisdictions allow for whistle-blowers to give their comment on the findings that are made pursuant to the investigations. The PDA makes no provision for this, nor does it preclude it. Therefore, it would be left to the investigator’s discretion whether or not to seek the whistle-blower’s input or comment on the outcome of the investigation.

Relief

Whistle-blowers want assurance that, should they suffer unfair treatment as a result of their disclosure, they will obtain relief. The International Principles for Whistleblower Legislation by Transparency International provide that

“a full range of remedies must cover all direct, indirect and future consequences of any reprisals, with the aim to make the whistle-blower whole”.

The TI Guidelines recommend that relief measures should include all losses – direct, indirect, financial and non-financial. In essence, to the closest degree possible, the whistle-blower should be restored to the situation that he or she would have been in, had he or she not made the disclosure.

More people will be encouraged to come forward to report wrongdoing if they see that the relevant laws are applied consistently, thus allowing whistle-blowers to obtain redress for occupational detriments. To create a climate where whistle-blowers are comfortable coming forward, laws and policies should be drafted to minimise obstructions to obtaining relief.

Reverse onus

One way to curtail hindrances to relief is by providing for a reverse onus in cases where whistle-blowers allege that they have suffered an occupational detriment. This would mean placing a burden on the employer to show that action taken against an employee was not related to whistle-blowing. In addition, whistle-blowers themselves have little resources and access to information that could assist in making a case that they were unfairly treated due to their whistle-blowing. A reverse onus would assist in rectifying the power imbalance between employers and whistle-blowers.

The TI Guidelines recommend that, to make use of protections, the person making a protected disclosure should only need to make out a case at face value that firstly, he or she made a disclosure, and secondly, suffered a negative treatment. The employer would then have to show that the negative treatment was not linked to the disclosure.

In applying the PDA, judicial authorities have concluded that the onus to show that a whistle-blower’s disclosure is protected lies on the whistle-blower. In Randles v Chemical Specialities Limited, the Labour Court set out what the whistle-blower must do:

“…if the whistleblower wishes to succeed…on the basis that he or she had suffered an occupational detriment…the whistleblower must first prove that the disclosure was protected as contemplated by the PDA and that he or she was subjected to an occupational detriment. Having said this, it should be pointed out that the issue of onus in the context of the PDA is not specifically regulated in the PDA. The whistleblower must, however, set out his or her cause of action in his or her statement of case and in doing so must plead such facts that will bring him- or herself within the parameters of the relevant sections of the PDA”.ⁱⁱ

The courts therefore approach onus in the same way as cases relating to automatically unfair dismissalsⁱⁱⁱ, but this does not take into account the unique considerations that apply in the context of whistle-blowing. For the various reasons set out above, the PDA should be amended to bring its provisions in line with the principle of a reverse onus.

What form should relief take?

The TI Guidelines note that relief can take the form of reinstatement to the same or equivalent position in the case of dismissal, transfer, or demotion. If the whistle-blower had been denied access to opportunities for promotion or training, such access can be restored. In certain cases, reinstatement is not possible or does not go far enough to redress the harm suffered. In such circumstances, compensation may be the appropriate form of redress. Compensation can be paid for lost past earnings, for future loss of earnings, as well as costs linked to a change of occupation.

The timing of the relief is very important to whistle-blowers. It must not be forgotten that access to remedies is essentially a legal matter and their rights must be upheld through the courts, as is specifically provided for under the PDA. This can take a long time. Interim remedies should therefore be available from the outset. Such orders can help protect whistle-blowers against unfair treatment while the disclosure is being processed.

Section 4 of the PDA concerns remedies. This section provides that whistle-blowers can approach any court having jurisdiction for appropriate relief, with the caveat that only employees (as defined) can approach the Labour Courts. Section 4(1B) provides an open list of potential remedies, including compensation, damages, or a mandamus directing the employer (or client) to take steps to remedy the occupational detriment. Crucially, it is left to the courts to determine “an appropriate order that is just and equitable in the circumstances”, which can include interim relief^iv. The PDA therefore leaves the door open for a wide range of remedies which is to the benefit of whistle-blowers.

Legal assistance

One way that governments can assist whistle-blowers is by making them eligible for legal assistance in any legal proceedings to vindicate their rights, should they not have the funds to do so. Unfortunately, South Africa’s legal aid system is already under significant strain and resource constraints prevent funding assistance from being provided to all whistle-blowers. Presently, a whistle-blower that approaches Legal Aid South Africa would be subject to a means test.

There is good reason to consider creating a special fund to assist whistle-blowers with legal costs. A legal fund is a practical way of realising whistle-blowers’ rights, which are rendered illusory if they cannot be enforced due to a whistle-blower’s financial constraints. The removal of this obstacle would provide encouragement to whistle-blowers to make disclosures, as they would not bear the financial risks arising from legal exposure. The rules of such a fund could provide that funds received from costs orders in successful cases must be repaid to the fund as a way to improve its sustainability.

Rewards

A positive way to encourage whistle-blowing would be to create a system of rewards or honours. This can take the form of a pecuniary or ceremonial acknowledgement of the courage that it takes to report wrongdoing. The TI Guidelines suggest that where a reward system is established, it should come in addition to a comprehensive national whistle-blower protection framework.

In the United States, the False Claims Act allows whistle-blowers to receive a portion of monies recovered following a disclosure relating to the defrauding of the government. The US Department of Justice reported that the government had paid out $392 million to whistle-blowers who exposed fraud and false claims in the amount of $3.4 billion in the 2017 fiscal year.^v In 2015, the Deputy Public Protector remarked on the effect of this law and suggested that South Africa should consider the idea of a “sweetener” for whistle-blowers seriously.^vi

South Africa’s PDA makes no provision for rewards, financial or otherwise. The idea of creating such a regime should not be dismissed lightly. The aim of providing rewards or honours would not be to enrich whistle-blowers but rather to encourage a behavioural shift away from apathy, paralysing fear, or indifference and towards disclosure of wrongdoing.

Whistle-blower Authority

One suggestion in the TI Guidelines that has no traction in South Africa is the establishment of an independent agency responsible for the oversight and enforcement of whistle-blowing legislation. An existing agency’s powers can be extended to undertake such functions or an entirely new institution can be set up. The vision in the TI Guidelines is that such an agency should:

• Be independent and have sufficient power and resources to operate effectively;

• Be competent to receive, investigate and address complaints of unfair treatments;

• Provide advice and support to whistle-blowers;

• Monitor and review whistle-blower frameworks, collect and public data and information regarding the functioning of whistleblowing laws and frameworks;

• Raise public awareness to encourage the use of whistle-blower provisions; and

• Enhance cultural acceptance of whistleblowing.

The role of providing education and advice sorely needs filling in South Africa. While non-governmental organisations do provide some assistance in this regard, they are constrained by lack of resources and often are not be able to provide individualised advice. More education is needed to explain how disclosures come to be protected and how to go about enforcing whistle-blower rights. Potential whistle-blowers may well be emboldened by having a dedicated, knowledgeable institution to which they can turn for advice. This can well make the difference between disclosure and silence.

A whistle-blower authority could make useful contributions to research and policy-making by collecting and publishing information regarding the implementation of the whistle-blowing legislation, such as the number of disclosures received and the actions taken in response.

Unfortunately, with the many pressures on the national fiscus that leave even Chapter Nine institutions underfunded, the possibility that such an agency will be established is remote.

Legislative structure and review

The TI Guidelines recommend that laws relating to whistleblowing be consolidated into once piece of legislation “to lend both clarity and coherence to the legal framework protecting whistle-blowers”. South Africa’s PDA provides a general statute relating to all whistle-blowers, whether in the public or private sector. As mentioned in Part I of this brief series, provisions relating to whistle-blowing can be found in other pieces of legislation, namely:

• The Companies Act^vii;

• The Prevention and Combatting of Corrupt Activities Act^viii;

• The National Environmental Management Act^ix;

• The Protection from Harassment Act^x;

• The Witness Protection Act^xi, and

• The Promotion of Access to Information Act^xii.

What is needed is a rationalisation of the laws relating to whistle-blowing. As has been discussed in this brief series, in many respects the PDA and the abovementioned Acts do not provide adequate blanket protections to whistle-blowers. For instance, a whistle-blower may not meet the threshold requirements to be a “witness” for the purposes of the Witness Protection Act but may face danger equal to or more severe than that which is faced by witnesses who do qualify for such protection. Whistle-blowers need to be able to make use of the safeguards of that Act or be provided with a comparable regime for protection. The 2017 amendment of the PDA, while commendable in some respects, failed to entrench wide-scale protections that cover the field of harms potentially faced by whistle-blowers.

In line with the suggestion that in the TI Guidelines that laws regulating whistle-blowing be reviewed periodically – such as every five years – it is suggested that South African legislators do not become complacent following 2017’s amendment to the PDA. Rather, research and information-gathering should be embarked upon with some urgency, paving the way for revision of the legal regime to further enhance whistle-blower protections.

Conclusion

The surreptitious nature of corruption makes it difficult – if not impossible - to quantify the costs of such practices to our national fiscus.^xiii A 2018 report by PwC stated that “economic crime in South Africa is now at the highest level over the past decade”^xiv. Given that corrupt practices have been linked to negative outcomes such as decreased economic growth^xv, the need to fortify mechanisms in place to combat fraud and corruption is urgent.

Whistle-blower protection is one such mechanism. In sprawling institutions with hundreds or thousands of employees, the best way to identify corrupt practices is to have eyes on the ground. The act of witnessing must then be turned into the act of reporting before investigation and sanction can follow.

The whistle-blower is the key that unlocks the process. But, at present, the law as it stands does not adequately consider the whistle-blower’s position, including the various pressures and disincentives that he or she faces. It fails to take into account the impact of not protecting a whistle-blower’s confidentiality, of uncertainty as to who to approach to make a disclosure, or of how he or she may not be able to access legal advice or services to ensure protection of rights. South Africa’s legislative framework regarding whistle-blower protections should be reconsidered with a view to expanding them in line with the recommendations contained in the TI Guidelines and international best practice.

It is not the just the law, but the entire approach to whistle-blowing that needs an overhaul. There is a need to move away from being suspicious of whistle-blowers and towards providing wide-reaching protection for bona fide disclosures with minimal procedural obstruction. A reversal of onus to prove that a disclosure is protected is one way to do this. Another is to empower more organisations to receive protected disclosures and refer them to more appropriate authorities as required. The personal safety of whistle-blowers and their families must be prioritised. We should consider rewarding those who take on the risks associated with whistle-blowing for the common good.

There is so much more that can be done. As this brief series has shown, by protecting and encouraging each “lone voice” to speak out, a rousing chorus against corruption and wrongdoing can be created.

Cherese Thakur

Legal Researcher

cherese@hsf.org.za