Protected Disclosures: What Employers Need to Know
- Business Central
- Oct 30, 2024
- 3 min read
Updated: Nov 5, 2024
In a landmark decision by the Employment Relations Authority (ERA) in June 2024, the Bank of New Zealand (BNZ) was found to have unjustifiably dismissed an employee who acted as a whistleblower, violating principles of good faith by retaliating against her.
This case stands out because it underscores the critical need to differentiate between regular complaints and protected disclosures, requiring organisations to follow specific procedures in handling whistleblowing incidents.
What is a protected disclosure?
A protected disclosure, commonly known as whistleblowing, is a report made by an individual, usually an employee, about serious wrongdoing within their organisation. The Protected Disclosures (Protection of Whistleblowers) Act 2022 provides legal protection for whistleblowers, ensuring they can safely raise concerns about illegal or unethical activities without fear of retaliation. This law applies to both public and private sectors, offering protection against retaliation such as dismissal, demotion, or harassment for those making disclosures.
The intent of the legislation is to create an environment where employees can freely report serious misconduct, including illegal activity or high-risk behaviours such as non-compliance with health and safety regulations, without fear of negative repercussions.
The BNZ whistleblower case
In the BNZ case, although the events occurred under the previous Protected Disclosures Act 2000, the principles applied remain relevant under the current 2022 Act. The applicant, Ms Bowen, joined BNZ in September 2015 as Manager of the Acquisition Specialists team. During her tenure, she raised concerns about the behaviour of one of her subordinates and the Head Manager of the Small Business Unit. This initial complaint, referred to as the “First Complaint”, triggered an investigation by BNZ.
However, shortly after this investigation, the same Head Manager proposed a restructure within the company, which resulted in Ms Bowen’s role being disestablished. When presented with the restructure proposal, Ms Bowen raised another complaint, referred to as the “Second Complaint”, which was a protected disclosure. This complaint was not included in her personal grievance claim due to it being filed outside the 90-day statutory timeframe.
The ERA found that the Head Manager had engineered the restructuring with no logical business justification and had intentionally excluded Ms Bowen from being considered for a newly created position. This was viewed as direct retaliation for her First Complaint. The ERA determined that BNZ had not only failed to follow proper procedures but had also mishandled Ms Bowen’s protected disclosures. The policies BNZ had in place for dealing with whistleblowing were confusing and flawed. Specifically, BNZ failed to recognise Ms Bowen’s initial complaint as a protected disclosure and did not take steps to protect her from retaliation as required under the bank’s Whistleblower Policy.
In conclusion, the ERA ruled that BNZ had acted unjustifiably by retaliating against Ms Bowen for making a protected disclosure, resulting in her unfair dismissal. The bank was found to have breached its duty of good faith, leading to serious disadvantage for Ms Bowen.
Lessons for employers on protected disclosures
This case highlights several critical takeaways for employers regarding the treatment of protected disclosures. First and foremost, organisations must clearly differentiate between regular complaints and whistleblowing. The failure of BNZ to do so was a central issue in this case. Its primary employee document, the Code of Conduct, did not reference the separate Whistleblower Policy, leaving employees unclear on how to proceed with serious complaints involving misconduct.
Employers must ensure that their policies explicitly define what constitutes a whistleblowing complaint, which typically involves “serious wrongdoing” such as illegal activities or violations of health and safety laws. Clear guidelines should be provided to help employees distinguish between normal complaints and those requiring special protections.
Additionally, the case demonstrates the importance of protecting whistleblowers from retaliation. Employers should implement safeguards, such as appointing independent investigators, to ensure that internal power dynamics do not influence the handling of disclosures. Furthermore, organisations must stress the importance of confidentiality and privacy for all parties involved in a protected disclosure.
Ultimately, the BNZ case reinforces that retaliation against whistleblowers will not be tolerated, and employers must take all necessary steps to ensure that whistleblowing processes are transparent, fair, and properly executed to prevent unjust treatment.
