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Protected Disclosures: What employers need to know

In a one-of-a kind ERA decision (June 2024), the Authority found that the Bank of New Zealand had unjustifiably terminated the employment of a whistleblower and breached good faith as the employee was subject to retaliation as a result.

The case is significant as it highlights that protected disclosures should not be treated just like any normal complaint and the correct policies and procedures must be applied.

What is a Protected Disclosure?

Protected Disclosures are made by individuals, under the protection of legislation, when an individual has concerns that there has been serious wrongdoing in or by the discloser’s organisation. This is sometimes known as whistleblowing.

This Act applies to both public and private sectors and one of its main functions is to ensure that workers are protected when they report concerns and can be free from any type of retaliation by employers.

The BNZ Whistleblower case

While the facts of this case occurred under the previous Protected Disclosures Act 2000, it is relevant to the application of the current Protected Disclosures (Protection of Whistleblowers) Act 2022.

The Applicant, Ms Bowen, was employed by BNZ from September 2015 as a Manager of the Acquisition Specialists team. During her employment she raised a complaint (“First Complaint”) about the conduct of one of her employees in her team and the Head Manager of the Small Business Unit.

BNZ investigated the complaint and, not long after, the Head Manager (who was the subject of Ms Bowen’s First Complaint) developed a restructure proposal which had the effect of disestablishing Ms Bowen’s role.

When the proposal was presented to Ms Bowen, another protected disclosure was made (“Second Complaint”). This disclosure formed part of the personal grievance raised (although it was later found that it was not successful as it was raised out of the 90-day PG timeframe).

It was found that the Head Manager had not only designed a structural change without any logical commercial basis, but the Head Manager had also deliberately closed the opportunity for Ms Bowen to be considered for the newly created role that the seconded person had been confirmed into. This was found to be in retaliation for the First Complaint.

The Authority also criticised BNZ for their handling of the protected disclosures and found that the organisation’s policies were confusing and flawed. The treatment of Ms Bowen’s First Complaint was found to be a breach of the NAB Whistleblower Policy that BNZ had in place because they did not treat it as a protected disclosure nor protected her from retaliation.

In summary, BNZ was found to have acted in an unjustified manner towards Ms Bowen through retaliation from the Head Manager for the First Complaint, which caused disadvantage. BNZ had breached good faith, as Ms Bowen had suffered retaliation and the restructure caused Ms Bowen to be unjustifiably dismissed.

What do employers need to know about Protected Disclosures?

The main takeaways from this case are that organisations should understand the difference between a normal compliant and a protected disclosure and ensure that this difference is clear in policies.

BNZ were criticised as the primary document for their employees was the Code of Conduct and this had no reference to the separate Whistleblower Policy which applied, which was not found to be clear to any employee who would be looking to make a complaint that falls within Whistleblowing territory.

A way employers could distinguish between a normal complaint vs a whistleblowing complaint is by identifying whether the complaint falls into the category of “serious wrongdoing” which is:

  • illegal activity and breaking the law; or
  • high-risk behaviours such as failure to comply with health and safety laws.

Put simply, company policies need to be structured on the basis that employees can quickly distinguish between a normal complaint and one attracting the additional protection of a Whistleblowing complaint and can therefore make a choice one way or the other.

Further, this case demonstrates that retaliation will not be tolerated. Employers should therefore take care to ensure that best practice is applied and the procedures are followed while the protected disclosure is being investigated.

Organisations could seek to mitigate any risk of retaliation  by appointing an independent investigator to conduct the enquiries, which would reduce any risk that internal players could misuse findings or information.

Either way, organisations must communicate clear expectations with those who are party to a protected disclosure about their obligation of confidentiality and privacy, to dis-incentivise them from using positions of power or information in a way that may be seen a retaliation.

If you would like to ensure your employment policies are fit for purpose in this area, or require information around independent workplace investigations, please get in touch.

 

Disclaimer

This article, and any information contained on our website is necessarily brief and general in nature, and should not be substituted for professional advice. You should always seek professional advice before taking any action in relation to the matters addressed.

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