Whistle-blowing

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CHAPTER 4: THE PROTECTED DISCLOSURES ACT 26 OF 2000

Introduction

In the RSA, the legislation relating to whistle-blowing, and the remedies that are availed to a whistle-blower are mainly seated within the contents of the PDA. The PDA was assented to on 1 August 2000, enacted on 7 August 2000 by the Presidency, and has since remained the same with not one amendment having been incorporated. Within the context of the PDA the term “good faith” is used, without being defined by the Act, and as such it is deemed necessary to explore the meaning of the usage thereof, especially in light of the fact that it is also used in the text of some of the other international legislation within this document.
In order to ensure that the objectives of this research are effectively met, it is deemed expedient to set out briefly the most basic provisions relating to the PDA, in order to ensure that the context in which it provides remedies is clearly understood. It would however, go amiss, should the author fail to recognise the constitutional imperative in relation to the PDA.
The Constitution of the Republic of South Africa, 1996 (hereinafter referred to as “the Constitution”), which is seen to be the supreme law of the country, does not in its text explicitly make provision for the protection of whistle-blowers, however, it is argued that it does expound the values pertaining to how all people in the Republic of South Africa (hereinafter referred to as the “RSA”), including whistle-blowers, are to be treated.1
Having said this, it is argued that although it does not directly provide for whistle-blowers or whistle-blowing, it does indirectly provide for whistle-blowing within the provisions of section 16, which provides for freedom of expression. More specifically, section 16(1)(b), provides that everyone has the right to freedom of expression which includes the freedom to receive or impart information (own emphasis) or ideas. It is argued that blowing the whistle in fact amounts to imparting information and or ideas.
Another standard which is clearly set by the text of the Constitution2 is embodied in section 23(1), which provides that everyone has the right to fair labour practices. This is particularly relevant when it is borne in mind that the provisions of the PDA apply in respect of the employment relationship. It is noted that this right granted goes wider than applying only to employees, as it grants the right to everyone, and as such would include independent contractors and everyone else in an employment relationship, including the employer. What constitutes a fair labour practice is not defined within the body of the Constitution, nor in the Labour Relations Act 66 of 1995. In NEHAWU v UCT3 the Constitutional Court considered the fact that the meaning of a « fair labour practice » has not been defined, determining that it was in fact not desirable to attempt to define the concept, as a precise definition is impossible and would depend on the facts of each case, requiring a value judgement to be made. Having consideration of the test formulated by the Constitutional Court in this respect, it is argued that circumstances involving an alleged unfair labour practice as a result of the whistle having been blown, would find application in this manner.
The importance of the provisions and objectives of the PDA are to be seen within the context of the Constitution in another respect, was affirmed in Tshishonga v Minister of Justice and Constitutional Development and Another:4 in which the court stated that the PDA takes its cue from the Constitution of the RSA. The PDA asserts the democratic values of human dignity, equality and freedom, although it is not restricted to a particular section of the Constitution, although each one of the rights provided for can be invoked by a whistle-blower.
Although each of these rights can be invoked by whistle blowers, the analysis in this case is from the perspective of the overarching objective of affirming values of democracy, of which the particular rights form a part. Democracy embraces accountability as one of its core values. Accountability, dignity and equality are the main themes flowing through the analysis that follows.5
This is a clear acknowledgement that whistle-blowing and whistle-blowers are a necessary check and balance in ensuring accountability, a core value of democracy, within our democratic society. As pointed out in the previous chapters, one of the key challenges in respect of whistle-blowing is that more often than not people are too afraid to speak out, and it is in this respect that the protection and remedies offered by the PDA becomes pivotal.
The court summarised these considerations eloquently in Tshishonga by stating that whistle-blowers are not impimpis, self-serving or socially reprehensible, but rather that the negative connotations are recently being replaced by the concepts of openness and accountability. The court stated that:
Employees who seek to correct wrongdoing, to report practices and products that may endanger society or resist instructions to perform illegal acts, render a valuable service to society and the employer. Still of 230 whistle-blowers in the United Kingdom and the USA, a 1999 survey found that 84% lost their jobs after informing their employer of fraud, even though they were not party to it.6
Martin7 also recognises the importance of the Constitution in respect of transparency and resultant transparency, and in relation to whistle-blowing, stating that whistle-blowing is central to the principles underscoring the Constitution, and further that it is pivotal to the fight against corruption and mismanagement, especially in respect of public funds; that it is pivotal to the strengthening of transparency and accountability, not only within organisations, but also within society in general. 8 The preamble of the PDA recognises that:
In South Africa neither the common – or statutory law provides for procedures or mechanisms by way of which employees may or can make disclosures pertaining to suspected or alleged criminal or irregular conduct by colleagues or their employers in the public or private sectors, without fear of reprisal; and Every employer and employee has the duty to disclose criminal or irregular conduct alleged or suspected in the workplace; and that
Every employer has a duty to take necessary steps to ensure that employees who disclose such information are protected from potential or actual reprisals as a result of having made such disclosure.
It is stated that the provisions of the PDA are necessary to enable the creation of a culture which will facilitate employees disclosing information relating to alleged or suspected criminal or other irregular conduct in the workplace, in a responsible manner, by providing a comprehensive guideline for both disclosing such information and the protection against any reprisals for such disclosures made; and promote eliminating criminal and other irregular conduct in public and private bodies.
The PDA was widely welcomed; the Public Service Commission stated that as of February 2001South Africa has had the most extensive, state of the art whistle-blowing legislation in the PDA which will assist in halting and surfacing wrongdoing that occurs within the workplace.9
The National Anti-Corruption Forum, in the Guide to the Whistle-blowing Act, stated in 2006 that the purpose of the PDA is to embolden employees to report wrongdoing that they know of in their workplace without fearing reprisal, and that the PDA is to be viewed as a pivotal part of corporate governance.10
The Congress of South African Trade Unions (hereinafter referred to as “COSATU” also put its support behind the PDA, expressing the belief that the PDA is a pivotal interposition in respect of corruption within the South African society.11
Thus the impetus behind the purpose of the PDA is clear.
It is in essence against this background that the relevant provisions of the PDA need to be viewed.

Good faith and the PDA

Richard Calland, Executive Chair of the new Open Democracy Advice Centre, states in Camerer12 that at the core of the PDA is the ideal that prevention is better than cure, encouraging whistle-blowers to first make a disclosure to their employer, in order to avail the employer the opportunity to address the alleged wrongdoing. He points out that potential whistle-blowers need to do so first, in respect of which the test is that of good faith, rather than blowing the whistle externally in the first instance. The provisions of the PDA require that disclosures are to be made in good faith, in order for the disclosure to be a protected disclosure.13 It is to be noted that the only instance in which a disclosure does not need to be made in good faith, is when it is made to a legal practitioner, in accordance with the provisions of section 5 of the PDA.
What would constitute good faith is not defined within the text of the PDA.14
In Ramsammy v Wholesale & Retail Sector Education & Training Authority15 the court inter alia considered the meaning of good faith, also considering the Tshishonga 16 matter. The court referred to a United Kingdom case, Street v Unemployed Workers’ Centre 17 , in which the meaning of good faith within the context of a disclosure was discussed at paragraphs 203-206.
In Street v Unemployed Workers’ Centre18, the court stated that at the core meaning of good faith is honesty (own emphasis), opining that by setting good faith as a legislative requirement it was clear that the legislature required more than just a reasonable belief, to form the basis of a disclosure made.
Whether or not good faith was present in the making of a disclosure would centre on a finding of fact, with the court considering all the evidence cumulatively.
The Supreme Court of Appeal in Brisley v Drotsky19 considered the concept of good faith, albeit within the sphere of contractual law, with the court stating at paragraph 22 that what emerges from recent academic writing and from some leading cases is that good faith may be regarded as an ethical value or controlling principle, which is founded in community standards of decency and fairness.
Ngcobo J, in the Constitutional Court’s judgment in Barkhuizen v Napier 20 at paragraph 80, confirmed that good faith includes the concepts of justice, reasonableness and fairness.
One has to wonder why the legislature did not rather provide for an honest disclosure; as long as the information provided is truthfully made on the basis of reasonable belief, the motive of the whistle-blower should be irrelevant, thus negating the requirement of good faith.

The objectives of the PDA: defining the scope thereof

The objectives of the PDA are stated as follows:
To make provision for procedures in terms of which employees in the private and public sector may disclose information pertaining to irregular or unlawful conduct by their employers or other employees in the employment of their employers;
To provide for the protection of employees who make a protected disclosure as provided for in terms of the PDA; and
To provide for matters connected with regard to making protected disclosures.
The objectives of the PDA are further elaborated on in section 2(1) (a-c) of the Act, providing that the objectives include:
Protecting employees in the public and private sectors from being subjected to reprisal in the form of occupational detriment, for having made a protected disclosure;
Providing remedies for employees so subjected to occupational detriment; and
Providing procedures which prescribe the manner in which protected disclosures are to be made.
What should as such be clear from the outset is that the provisions of the PDA are only aimed at protecting employees, and further to this, only from occupational detriment. The scope of the provisions of the PDA is further defined in terms of the provisions of section 2(2), by providing that its provisions apply only to protected disclosures made after the date on which section 2 came into operation, irrespective of whether the alleged irregular or criminal conduct took place before or after the specified date.
The PDA specifically specifies that any provision in a contract of employment or other agreement entered into between an employer and an employee that attempts to exclude any provision of the PDA is void,21 including any such provision which attempts to preclude an employee from the protection offered by the PDA or discourage the employee from making a protected disclosure.22
The importance of defining the employment relationship, in terms of who would qualify as an employer and an employee, is simply stated by McGregor et al23 as understanding the protective nature of labour laws, in terms of which labour laws may be compared to an umbrella. In McGregor’s analogy used, those persons not standing under the umbrella will either get wet or will need to find another umbrella to protect them with from the rain. Succinctly put, persons not protected by the scope of the labour laws will need to find other laws with which to protect themselves.24
Thus the establishment of the people falling within the scope of the provisions of the PDA is of importance.

Who is the employer?

As the provisions of the PDA apply specifically to the relationship between the employer and an employee, it is necessary to establish who the employer would be within the context of the PDA.
Who the employer is, is defined in section 1of the PDA as including any person who:
Employs or provides work for any other person, and who remunerates that other person, or who undertakes to remunerate that person; or
Permits another to assist in the carrying on or conduct of his, her or its business in any way, and includes a person who allows the aforementioned on behalf or on the authority of the relevant employer.
It is to be noted that sections 78 and 231 of the Labour Relations Act 66 of 1995 (hereinafter referred to as the “LRA”) do not define the employer.
An interesting development in this regard was the court’s approach in Charlton v Parliament of the Republic of SA. 25 In this case the Labour Court (hereinafter referred to as the “LC”) was asked to differentiate between an employee and employer as defined in terms of the LRA, and an employee and employer for the purposes of the PDA. Although this point was found to be appealable by the Labour Appeal Court (hereinafter referred to as the “LAC”), the appeal was upheld in the Supreme Court of Appeal (hereinafter referred to as the “SCA”). 26 It seems to indicate that the differentiation in this respect may be entirely acceptable, and that the employment relationship could well be defined in respect of the parameters set by the definitions contained in the PDA.

Who is an employee?

As the provisions of the PDA apply specifically to the relationship between the employer and an employee, it is necessary to establish who the employee would be within the context of the PDA.
Who the employee is, is defined in section 1(ii)(a-b) of the PDA including:
any person who works for another or the State, and who receives or is entitled to receive remuneration, excluding an independent contractor; and
any other person who in any manner assists in conducting or carrying on the business of the employer.
It has to be noted that this is the exact definition (own emphasis) of an employee as per the provisions of section 213 of the LRA.
However, section 78 of the LRA in respect of workplace forums defines an employee as being any person who is employed, excluding a senior managerial employee, and whose employment contract or status allows him or her to represent the employer in its dealings with the workplace forum or determine policy in the workplace and take decisions on the employer’s behalf that may be in conflict with the representation of the employees in the workplace.
Thus by definition as per the PDA and as mirrored in section 213 of the LRA, both private and public sector employees are included, however, excluding independent contractors from the protection offered. Further to this, section 78 of the LRA excludes from employees senior managerial employees who may represent the employer in dealings with the workplace forum or who may determine policy and take decisions on behalf of the employer which may be in conflict with the representation of employees in the workplace. Note is taken that this definition pertains to workplace forums and their functioning, and as such is not to be seen as such senior employees being excluded from the protection offered by the provisions of the PDA.
Who qualifies as an independent contractor is not defined under the auspices of the LRA, leaving the distinction to be made on the grounds of the reality test.27 In this respect, the presumption created by the provisions of section 200A of the LRA is of pivotal importance. Section 200A provides that, until the contrary is proved, a person who works for or renders service to another, is presumed to be an employee, regardless of the form of the contract or agreement between them, if any one or more of the following factors are present, namely:
if the manner in which the person works is subject to either the control or the direction of another person;
if the person’s working hours are determined or subject to the control or direction of another;
if the person forms part of the organisation in question;
if the person has worked for that other person for at least 3 months, for an average of 40 hours per month;
if the person is economically dependent on the other for whom he works or to whom he delivers a service;
if the person in question is provided with tools or equipment in order to perform the work or service;
if the person only renders a service or works for that one other person.
In terms of section 200A (2), the above-mentioned does not apply to someone who earns more than the amount determined by the Minister, in terms of section 6(3) of the Basic Conditions of Employment Act 75 of 1997 (hereinafter referred to as the “BCEA”). At the present date28 the earnings threshold in this respect has been set at 205433.40 by the Minister of Labour.29 In terms of section 200A (3), if the proposed or existing working arrangement in question involves a person who earns less than or an amount equal to the earnings threshold, any of the contracting parties may approach the CCMA for an advisory award in respect of whether or not the persons involved are employees or not.
Section 83A of the Basic Conditions of Employment Act 75 of 1997 is a mirror image of the provisions of section 200A of the LRA, and as such will not be repeated. In the Charlton case supra,30 the court distinguished between employees in respect of the LRA and employees for the purpose of the PDA.31
It also needs to be noted that the LRA specifically differentiates between an independent contractor and a temporary employee, as a temporary employee is regarded as an employee. See in this respect the provisions of section 198 of the LRA.

A protected disclosure

There has been a noticeable trend in respect of the description of what a protected disclosure in fact encompasses, for example:
In general, such disclosures become protected when they are made to certain persons and offices under certain conditions…However, irrespective of the person or office to whom the disclosure is made, a disclosure will be protected if certain conditions are met. The disclosure must be in good faith, the employee must reasonably believe that it is substantially true and it must not be made for personal gain; and the employee must have reason to believe that if disclosure is made to the employer, he or she will suffer an occupational detriment or the same information was previously disclosed to the employer with no action within a reasonable period or it is exceptionally serious.32
In 2005 it was added that in general, such disclosures33 become protected when they are made to certain persons and offices under certain conditions.
Not every disclosure made by an employee will be protected and only gradually are our Courts beginning to consider the nature of a protected disclosure and the protection to be afforded employees.34
In the 2009 the matter is not directly broached:
Not every communication or disclosure by an employee will constitute a protected disclosure.
Before attempting to define a protected disclosure, one would need to establish what would constitute a disclosure. Section 1 of the PDA defines the concept of a disclosure as including any disclosure of information relating to the conduct of an employer or an employee of the relevant employer, and which is made by an employee who has grounds on a reasonable basis for believing that the information so reported has bearing on the following types of conduct that has taken place, is taking place, or is likely to take place:
A criminal offence;
A failure to comply with a legal obligation;
A miscarriage of justice;
The endangerment of the health or safety of a person;
Damage to the environment;
Unfair discrimination as provided for in terms of the provisions of the Promotion of Equality and Prevention of Unfair Discrimination Act 4 of 2000;
That any of the abovementioned is or has been deliberately concealed.
From the above it is clear that the manner of action which would constitute a disclosure is not defined within the PDA, but rather the type of information that the disclosure relates to. What is also to be noted is how wide the relevant subjects have been worded, which it is argued may make it difficult for the potential whistle-blower to determine with safety whether his potential disclosure would in fact amount to a disclosure as defined above.
A further point in this regard is that seemingly the ambit of this definition has been widened by the provisions of section 1(i)(a) and (b) of the Financial Services Law General Amendment Act 45 of 2013, by the insertion of the Pensions Fund Act 24 of 1956, after the definition of “dependant” of the widened definition of a disclosure. It provides that in addition to the meaning of a disclosure as defined in terms of section 1 of the PDA, a disclosure includes the disclosure of information relating to:
Any conduct of a pension fund, the administrator, board member, principal offer, deputy principal officer, valuator, officer or employee of a pension fund or administrator; and
The affairs of the pension fund which may prejudice the fund or its members.

TABLE OF CONTENTS
CHAPTER 1: AN INTRODUCTION TO THE STUDY AT HAND
1.1 Introduction
1.2 Background
1.3 Problem statement
1.4 Hypothesis
1.5 Research methodology
1.6 Content
1.6.1 The elements of analysis – considerations
1.7 The template to be utilised in determining measurable comparative points/ elements
1.8 Conclusion
CHAPTER 2: WHISTLE-BLOWING
2.1 Introduction
2.2 The origins of whistle-blowing
2.3 Defining the whistle-blower and whistle-blowing
2.4 The protection of whistle-blowers
2.5 Why blow the whistle?
2.6 Conclusion
CHAPTER 3: AN INTRODUCTION TO NOTEWORTHY INFLUENCES IN RESPECT OF WHISTLE-BLOWING WITHIN THE SOUTH AFRICAN CONTEXT
3.1 Introduction
3.2 The Code of Conduct for the Public Service
3.3 Minimum anti-corruption capacity requirements
3.4 United Nations Convention against Corruption
3.5 African union Convention on Preventing and Combating Corruption
3.6 OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions
3.7 SADC Protocol against Corruption
3.8 Conclusion
CHAPTER 4: THE PROTECTED DISCLOSURES ACT 26 OF 2000
4.1 Introduction
4.2 The main South African whistle-blowing legislation – the PDA
4.3 A protected disclosure
4.4 Occupational detriment
4.5 Conclusion
CHAPTER 5: FURTHER PROVISIONS WITHIN SOUTH AFRICAN LAW AFFECTING WHISTLE-BLOWERS
5.1 Introduction
5.2 Practical guidelines for employees in terms of section 10(4)(a) of the PDA
5.3 Public Service Act 103 of 1994
5.4 The Defence Act 42 of 2000
5.5 The South African Police Act 68 of 1995
5.6 The National Environmental Management Act 107 of 1998
5.7 The Western Cape Public Protector Act 6 of 1994
5.8 A few more considerations not covered in the guidelines
5.9 The protection of witnesses in terms of South African legislation
5.10 The Companies Act 71 of 2008
5.11 Conclusion
CHAPTER 6: REMEDIES AVAILED TO WHISTLE-BLOWERS IN SOUTH AFRICA AND WITHIN THE CONTEXT OF THE PDA
6.1 Introduction
6.2 The first remedy
6.3 The second remedy
6.4 The third remedy
6.5 The fourth remedy
6.6 The duties of the employer and vicarious liability within this context – a fifth remedy?
6.7 The insertion of section 200B in the LRA
6.8 Conclusion
CHAPTER 7: AN OVERVIEW OF SOUTH AFRICAN CASE LAW CONCERNING WHISTLE-BLOWERS
7.1 Introduction
7.2 The body of case law
7.3 A checklist devised
7.4 Case law dealing with jurisdictional considerations
7.5 Additional general considerations by legal practitioners in whistle-blower cases
7.6 The remedies provided
7.7 Suspension of the whistle-blower
7.8 Conclusion
CHAPTER 8: THE WHISTLE-BLOWER IN SOUTH AFRICA’S POSITION MEASURED
8.1 Introduction
8.2 The whistle-blower in South Africa’s position measured
8.3 Conclusion
CHAPTER 9: THE POSITION OF THE WHISTLE-BLOWER IN NEW ZEALAND
9.1 Introduction
9.2 The role of the Ombudsman
9.3 The Protected Disclosures Act 7 of 2000
9.4 Conclusion
CHAPTER 10: THE WHISTLE-BLOWER IN NEW ZEALAND’S POSITION MEASURED
10.1 Introduction
10.2 The whistle-blower in New Zealand’s position measured
10.3 Conclusion
CHAPTER 11: THE POSITION OF THE WHISTLE-BLOWER IN AUSTRALIA
11.1 Introduction
11.2 The purpose of the PDA A
11.3 The information that may be disclosed in accordance with the PDA A
11.4 To whom and how the disclosure is to be made
11.5 Disclosures to which the protected disclosures scheme does not apply
11.6 Notification of and the assessment of disclosures
11.7 Related disclosures made
11.8 Protection of the person making the protected disclosure
11.9 Confidentiality of disclosures
11.10 Guidelines, procedures and education in respect of the PDA A
11.11 Reports in respect of the PDA A
11.12 Conclusion
CHAPTER 12: THE POSITION OF THE WHISTLE-BLOWER IN AUSTRALIA – VICTORIA, MEASURED
12.1 Introduction
12.2 The whistle-blower in Victoria, Australia’s position measured
12.3 Conclusion
CHAPTER 13: THE POSITION OF THE WHISTLE-BLOWER IN THE UNITED KINGDOM
13.1 Introduction
13.2 The purpose of the PIDA
13.3 What comprises a protected disclosure?
13.4 To whom a qualifying disclosure may be made
13.5 Remedies provided by the PIDA
13.6 Unfair dismissal in terms of Employment Rights Act 1996 and as a remedy
13.7 The PIDA and the PDA
13.8 Conclusion
CHAPTER 14: THE POSITION OF THE WHISTLE-BLOWER IN THE UNITED KINGDOM, MEASURED
14.1 Introduction
14.2 The whistle-blower in the United Kingdom’s position measured
14.3 Conclusion
CHAPTER 15: A CONCLUSION ON THE DETERMINED POSITION OF THE WHISTLE-BLOWER IN SOUTH AFRICA
15.1 Introduction
15.2 The bigger framework of whistle-blower protection in South Africa
15.3 A re-evaluation of South Africa, strictly within the context of the PDA
15.4 An overview of the measurements allocated
15.5 In what respects the PDA does not measure up
15.6 What the PDA actually provides to the whistle-blower in respect of remedies
15.7 Conclusion and recommendations in respect of the suggested way forward
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