RESOLUTION OF PROTECTED DISCLOSURES BILL

FROM: A.T.C. of 12/05/00

1. Report of the Portfolio Committee on Justice and Constitutional Development on the Open Democracy Bill [B 67 - 98] (National Assembly - sec 75), dated 15 March 2000:

A. The Portfolio Committee on Justice and Constitutional Development reports as follows:

1. The Ad Hoc Joint Committee on Open Democracy Bill submitted the Promotion of Access to Information Bill [B 67B - 98] (National Assembly - sec 75) together with its Report to the Houses (see Announcements, Tablings and Committee Reports, p 15).

2. That Report, which was adopted by the two Houses, contained the following:

"The original Bill provided a chapter on the protection of whistle blowers. All parties were unanimous in their views that this legislation is vital for the fight against crime. The Committee was of the view that it is not apposite to include a chapter on whistle blower protection in legislation dealing with the right of access to information. Parliament has embarked on a process of redrafting the chapter into separate legislation. The whistle blower legislation will be the next priority of the Committee..."

3. On 12 April 2000, the National Assembly, with the concurrence of the National Council of Provinces (on 18 April 2000) amended that Report to read, inter alia, as follows:

"... with reference to paragraph 9 of the Report, the task of redrafting the chapter on whistle blower protection, which was omitted from the bill presented to the Houses by the ad hoc joint committee, be assigned to the National Assembly Portfolio Committee on Justice and Constitutional Development, the Committee to present the redrafted chapter as a separate bill; and ... the Ad Hoc Joint Committee on Open Democracy Bill is accordingly dissolved".

4. Therefore, the Portfolio Committee, having considered and examined its terms of reference, presents the Protected Disclosures Bill [B 30 - 2000] (National Assembly - sec 75).

B. The Committee further reports as follows:

1. The Bill is derived from Part 5 of the Open Democracy Bill [B 67 - 98], and purports to protect employees from victimisation by employers and, for that purpose, is confined to the relationship between employer and employee in both public and private spheres.

The Committee considered the possibility of extending the ambit of the Bill beyond the purview of the employer/employee relationship. The Committee, inter alia, considered the following possibilities:

(1) An individual who makes a disclosure concerning the corrupt activities of an insurance salesperson and who, as a result thereof, is denied insurance coverage by that or another insurance company.

(2) A pensioner who, as a result of reporting on the involvement of an employee of an organ of state in criminal activities, experiences delays in receiving his or her pension.

(3) A private contractor discloses information concerning corrupt activities in an organ of state or a private body and as a result thereof an existing contract is breached or any expectation in respect of future contracts is surrendered.

It was, however, noted that most foreign jurisdictions tend to limit legislation of this nature to the relationship between employer and employee. The Committee concluded that -

(a) any extension beyond the current ambit would require defining the different types of victimisation to which persons who are not in an employer/employee relationship may be subjected as a result of making certain disclosures; and

(b) existing labour, contractual or other remedies may not be sufficient to provide appropriate redress for persons who, as a result of making certain disclosures, are subjected to victimisation.

The Committee is not opposed to an extension of the current ambit of the Bill, but is nevertheless of the view that this would require comprehensive and comparative research.

2. The Committee noted that the British "Public Interest Disclosure Act", 1998, contains a provision (section 43C) in terms of which a worker can also make a protected disclosure relating to the conduct of a person other than his or her employer. The Committee considered the insertion in Clause 6 of the words underlined hereunder:

"6.(1) Any disclosure made in good faith -

(a) and substantially in accordance with any procedure prescribed, or authorised by the employee's employer for reporting or otherwise remedying the impropriety concerned; or

(b) to the employer of the employee, where there is no procedure as contemplated in paragraph (a); or

(ii) any other matter for which that other person has legal responsibility,

is a protected disclosure.".

However, the Committee concluded that the provision would extend the ambit of the Bill beyond the scope of the employer/employee relationship, as discussed in paragraph 1 above.

3. Clause 63(1) of the Open Democracy Bill made provision for the exclusion of criminal or civil liability for making, what in terms of this Bill amounts to, a protected disclosure.

The Committee, after considering the matter, came to the conclusion that it is undesirable to include this provision in this Bill, for the following reasons:

(1) The Bill purports to protect employees from victimisation by employers, and is confined to the relationship between employer and employee.

(2) Extending the scope of protection of employees to matters in respect of which they would otherwise -

(a) be liable to criminal prosecution; or

(b) have incurred civil liability to third parties,

may amount to a denial of the constitutional right to the adjudication of a justiciable dispute in a court of law or another independent forum.

(3) The indemnifying of employees against prosecution for offences (who in certain cases may use the provisions of the Bill to conceal their own involvement in criminal activities) may frustrate the legislature's intention in respect of certain statutory offences and may not be in the best interests of the public.

The Committee was not in a position to conduct an audit of the effect that such a provision may have on existing laws, and is of the view that such an audit will be essential to prevent unintended consequences resulting from such a provision.

The Committee realises that the matters referred to in paragraphs (2) and (3) are arguable, and holds the position that these matters should be investigated more fully and, if necessary, the provisions of the Bill could then be reviewed.

4. The Committee also considered the creation of a new course of action for an employee who had been victimised by an employer in contravention of the Bill. Such course of action could be aimed at the person who acted in contravention of the Bill, or at both the employer (vicarious liability) and such person, and could also introduce the concept of "punitive damages" into our law. The Committee considered the following as possible draft provisions in this regard:

"(a) Any employee who is subjected to any detriment in breach of section 3 is entitled to claim punitive damages in any court having jurisdiction.

(b) The punitive damages may be awarded against the employer, or alternatively, or as well as, against any person in his or her personal capacity if such person's action caused the detriment.

(c) Nothing in this Act shall be construed as preventing the employee who is subjected to detriment in breach of section 3 to institute an action for an order to set aside the action taken by the employer which constituted the detriment or an order directing the employer to remedy the detriment.

(d) Notwithstanding any other remedy prescribed in other legislation, the employee may, if an application is made in terms of paragraph (a) above, add an application for an order referred to in paragraph (c) above.".

"(1) Any employee who -

(a) has suffered a detriment;

(b) on account of, or partly on account of, having made a protected disclosure; and

(c) who has suffered any loss or damage resulting from such detriment,

may, in addition to any other relief at his or her disposal, bring a claim for appropriate compensation or any other appropriate relief against the person whose conduct resulted in such detriment.".

However, the Committee is of the opinion that the creation of new remedies in the labour field should be approached with caution. A thorough knowledge and understanding of the existing remedies and procedures in this field will be necessary to ensure that duplication does not occur and to prevent the development of a dual system, which could create legal uncertainty and detrimentally affect the administration of sound labour practices. It should be noted that if the matter referred to in paragraph 2 above is investigated and the Bill is amended accordingly, the possibility of additional remedies should also be investigated for that purpose. The Committee is further of the opinion that the introduction of the concept of "punitive damages" should, likewise, be approached with caution.

5. The Committee considered the desirability of creating offences in the Bill, in terms of which -

(1) an employer would be committing an offence by unlawfully subjecting an employee to an occupational detriment; and

(2) an employee would be committing an offence by making a false disclosure, or by making a disclosure not knowing or believing it to be true.

The Committee holds the view that it may well be appropriate to create such offences. However, the Committee is aware that countries which have similar legislation differ in this respect. The Committee is also mindful of the fact that such a provision may impact on the existing laws and practices regulating employer/employee relations. This matter needs further research and consideration, also taking into account the government's 1995 decision to decriminalise labour legislation, before any criminal sanctions are created.

6. The Committee is of the view that the South African Law Commission would be best suited to undertake research in all the matters referred to above, and accordingly requests the Minister for Justice and Constitutional Development to consider referring these matters to the Commission for investigation.

Report to be considered.