“…the threat of disciplinary action can be held as a sword of Damocles over the heads of employees …” (Supreme Court of Appeal)

The Labour Court’s recent reinstatement of a dismissed whistleblower has confirmed that our laws will robustly protect anyone who reports wrongdoing in the workplace.

“The Whistleblower’s Act” removes the Sword of Damocles

The Protected Disclosures Act (“PDA”) – commonly referred to as the “Whistleblower’s Act” – protects employees, independent contractors, consultants, agents and workers employed by labour brokers from retaliation after reporting unlawful or improper conduct.

Without that protection, as our courts have pointed out, “the threat of disciplinary action can be held as a sword of Damocles over the heads of employees to prevent them from expressing honestly held opinions to those entitled to know of those opinions. A culture of silence rather than one of openness would prevail.”

The Act is complex, and its application is full of grey areas, so specific advice is essential. But in a nutshell:

The PDA applies to both public and private sector employers.
Employers must have in place “internal procedures for receiving and dealing with information about improprieties”.
Any form of reprisal against a whistleblower – not just dismissal but any type of “occupational detriment” (disciplinary action, demotion, suspension, harassment, intimidation, compulsory transfer and the like) – will expose an employer to harsh penalties.
If the reprisal takes the form of a dismissal, it is “automatically unfair” and could result in reinstatement with retrospective back pay, compensation of up to 24 months’ remuneration if reinstatement is inappropriate, payment of actual damages and other appropriate relief. Occupational detriments other than dismissal are deemed to be an “unfair labour practice” with a similarly wide range of remedies.
Any disclosure is protected if made in good faith and with a reasonable belief that it is substantially true, not for personal gain, and in circumstances where it is reasonable to make the disclosure. Employees should be careful here: groundless speculation is not enough, and a whistleblower acting maliciously or recklessly in disclosing false information risks criminal prosecution. Acting in good faith and reasonably is the key.
Once the employee presents evidence to show that the protected disclosure was the reason, or just one of the reasons, for the disciplinary action, the employer must show that it disciplined the employee for a fair reason such as misconduct unrelated to the disclosure.

Dismissed for breaching policy or for talking to the SIU?

In the case in question, a Facilities Manager accused his employer (the National Student Financial Aid Scheme, a public sector organisation) of unfairly dismissing him.

He had become seriously concerned when a tender specification for new office space was approved without being signed off either by him or by his immediate line manager. That, he said, was a fundamental procedural irregularity because he was effectively the “end user” representative in procurement processes related to lease agreements.

Worse still, the employer went ahead and accepted a lease option that was both more expensive (we’re talking big money here, with rental to the tune of R2 million per month) and less practical (it needed extensive fitting-out before occupation) than another, more affordable option. A proposed five-year extension of the lease reinforced the manager’s belief that irregular and wasteful expenditure was being incurred.

He did everything he could to alert senior management to his concerns, exhausting all the internal reporting mechanisms available to him – but to no effect.

Then came a break, when the Special Investigating Unit (SIU) was called in by the President to investigate irregularities at the organisation. The manager, on the advice of his employer’s internal audit lead, told SIU investigators about the serious procurement irregularities he had identified.

To support his disclosures, and out of fear of victimisation and to preserve evidence, he emailed relevant emails and other documents to his private email address, forwarding them to the SIU.

When these disclosures were leaked into the public domain, his employer launched an investigation into the source of the leaked information. It identified the manager as the informant and dismissed him for contravening its ICT (Information and Communication Technology) policies by forwarding work emails to his personal email address.

The Court however accepted the manager’s contention that his dismissal was not genuinely about a breach of policy but was instead a pretext for retaliation. His contraventions of company policy were an integral part of the disclosure process, his disclosures were protected, and his dismissal was automatically unfair.

His employer must reinstate him with full back pay, and, to rub salt into its wounds, it must also pay all his legal costs on the punitive attorney and own client scale.

Tips for employees

Make sure that your disclosures will pass all the tests we set out above and follow the correct procedures in making them. As we said above, good faith and reasonableness are your watchwords here.

Tips for employers

Put a whistleblower policy in place and tell all your employees about it. It’s not just a legal requirement: your business can only benefit from uncovering any improper or criminal conduct going on behind your back.

Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact us for specific and detailed advice.