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Shopsteward Volume 27: Special Bulletin

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Policy  |  Submissions

Cosatu submission on the SALC'S

Issue Paper on Protected Disclosure

Submitted to the South African Law Commission

Table of Contents

2.Problematic areas in pda's application to employment relationships

2.1 Exclusion of Third Parties
2.3 Persons to whom disclosures may be made

3.Specific Questions in the issue paper

3.1Extending the ambit
3.2 Exclusion of criminal and civil liability
3.3 Remedies
3.4 Crminal offences

4.Other issues

1. Introduction

COSATU believes that the Protected Disclosures Act, 2000 (PDA) is an important intervention to prevent and eradicate corruption in our society. Accordingly we welcome the request by the South African Law Commission(SALC) to comment on the Protected Disclosures Issue Paper.

The Issue Paper is based on an earlier directive by the Justice Portfolio Committee to investigate the extension of the ambit of the PDA beyond employment relationships; excluding criminal and civil liability for making protected disclosures; introducing punitive damages and creating offences for contravening the PDA. In addition to responding to the questions posed in this regard, this submission comments on policy gaps in the legislation that have been identified in the course of the implementation of the PDA.

The SALC has indicated that a discussion paper and final report will be written after completion of the Issue Paper process. Taking into account the significance of the PDA, COSATU would be keen to participate in these further processes.

2. Problematic areas in pda's application to employment relationships

We do support the key purpose of the Issue Paper, which is to investigate the extension of the ambit of the PDA beyond employment relationships. However, we believe that it is imperative to first look into problems experienced in respect of its current scope, ie its application to employment relationships.

Our concerns in this respect relate firstly to the narrow definition of employee, which is inconsistent with recent labour legislative amendments. Secondly, we believe that the PDA has the effect of excluding third parties(for example independent contractors and clients) who are encountered in the course of employment. Thirdly, we believe that it is imperative to increase the number of persons/bodies to which protected disclosures may be made.

2.1 Narrow definition of employment relationships The definition of “employee” excludes independent contractors, who currently do not enjoy protection under the PDA. A similar narrow definition in the Labour Relations Act, 1995 (LRA) led to abuse by employers who call employees independent contractors in order to prevent them from exercising their labour rights. There is nothing in the PDA to distinguish those “independent contractors” who are in fact de facto employees from genuine independent contractors.

In order to address this problem in relation to the LRA, an amendment was inserted in 2002, which provides that a person will be presumed to be an employee if one or more factors are present. These factors include the manner and hours of work being subject to the control of another person, where a person only works for one person and is provided with tools or work equipment by that other person.

In order to address the above inconsistency between the PDA and LRA, we propose that that the definition of “employee” be amended to incorporate the LRA presumption.

Our proposal for redrafting: Definitions 1. In this Act, unless the context otherwise indicates- (i) ……. (ii) “employee” means- (a) subject to section 200A of the Labour Relations Act, 1995 (Act No. 66 of 1995), any person excluding an independent contractor, who works for another person or for the State and who receives, or is entitled to receive, any remuneration; and… (b) ……..

2.2. Exclusion of Third Parties The current application of the PDA to employment relationships has the effect of providing protection for employees who disclose irregular/unlawful conduct by their employers and other employees. No provision is made for third parties (for example, genuine independent contractors and clients), who are also encountered in the course of employment. The implication is that if an employee discloses unlawful conduct by clients or independent contractors to an employer, the employer may in turn victimise the employee especially where there is collusion between the employer and the third party or the risk of financial loss.

There were various incidents prior to 1994 when studies undertaken by State medical doctors revealed the harmful impact of asbestos mining on workers. On disclosing this they were either subjected to disciplinary procedures or transferred. This example illustrates the artificial division between employers and employees on the one hand and third parties directly relevant to the work environment on the other.

We believe that amendments should be made to the PDA to include disclosures made about third parties encountered at the workplace.

2.3 persons to whom disclosures may be made Sections 5, 6, 7 and 8 provide for disclosures to legal advisers, employers, Cabinet or Executive Council members and certain statutory bodies respectively. We believe that consideration should be given to expanding the list of bodies that a person could disclose information to. In particular we believe that section 5 should be amended to include disclosure to trade union representatives, who may advise the employee and act on her/his behalf. Many workers may feel more secure obtaining advice on the PDA's protection and procedures before disclosing to an employer. However, legal practitioners are costly and are therefore not accessible for many workers.

There should also be a review of the statutory bodies identified under section 8. It needs to be amended to make explicit provision for the Labour Inspectorate of the Department of Labour and any other statutory body, which may have an important role in this regard.

3. Specific Questions in the issue paper

3.1 Extending the ambit Q. 1.1 Do you regard the extension of the ambit of the PDA beyond the purview of the employer/employee relationship as necessary or desirable?

Since the current application of the PDA is limited to employment relationships, this question is directed at extending its scope. COSATU is of the view that the extension of the PDA is both necessary and desirable.

In the event that the definition of “employee” is amended to reflect our proposals above, genuine independent contractors will continue to be excluded from protection of the PDA. Such a person may be more reluctant to disclose irregular/unlawful conduct by a contractual partner if this would lead to losing a contract or financial loss. Other possible examples of persons who may benefit from protection from the PDA include students at educational institutions and board members disclosing irregular conduct of other board members.

If the ambit of the PDA is extended beyond employment relationships, the SALC will need to consider expanding the list of persons/bodies to whom disclosures may be made. It is of concern that this is an aspect that has not been dealt with in the Issue Paper.

Q.1.2 What are the various types of victimisation that need to be included in the PDA?

Section 1(vi) lists the various forms of occupational detriment that workers may be subjected for making a disclosure. In addition to this, other possibilities include being denied training opportunities, making working conditions intolerable and being sued for defamation.

The most likely victimisation of contractors would be loss of contracts. Further, they also incur the risk of intolerable working conditions and defamation actions.

3.2 Exclusion of criminal and civil liability

Q. 2.1 Would it be in the best interests of the public to exclude criminal or civil liability of whistle blowers in the PDA so as to encourage disclosures? Could this have the effect of frustrating the intention of the legislature in respect of certain statutory offences?

Currently the PDA does not expressly provide for the exclusion of civil and criminal liability for making a protected disclosure. This is a serious weakness, which discourages potential whistle blowers from making disclosures. There are adequate safeguards in the PDA to prevent its abuse criminal and civil liability to be excluded. The procedures and conditions have been specified and where these are not complied with, the person does not enjoy protection of the PDA.

Q. 2.2 Would the exclusion of liability amount to a denial of the constitutional right to the adjudication of justifiable disputes in a court of law or other independent tribunal?

On the face of it this would amount to a denial of the constitutional right of access to courts. However, given that the intention of the PDA is to address corruption, the limitation of this right would be reasonable and justifiable and therefore not unconstitutional. Furthermore, the protection extends only to those disclosures that are made in compliance with the procedures and conditions of the PDA. These provide adequate safeguards that may be balanced against the limitation of rights of access to courts.

3.3 Remedies

Q. 3.1 Should the PDA provide a further remedy or remedies where an employee has in fact been victimised for making a disclosure?

Automatically Unfair Dismissals Any dismissal in breach of the PDA is an automatically unfair dismissal, which would require the person to seek relief through the Labour Court should conciliation fail. The power of the Court to make an order for compensation is limited by the provisions of the LRA, which caps a compensation order to a maximum of two years salary. Taking into account current rates of unemployment, the risk of losing an income is likely to discourage workers from making disclosures, especially those that are more vulnerable in the labour market. Therefore, we believe that further remedies should be provided to ensure that whistleblowers are not penalised for making protected disclosures. This may include providing additional compensation that takes into account the actual loss suffered by the whistleblower, without setting artificial ceilings.

Unfair Labour Practices If a worker is subjected to “occupational detriment” but is not dismissed, then this is deemed to be an unfair labour practice under the PDA. Any dispute about an unfair labour practice must be resolved by following procedures set out in the LRA. If conciliation fails then the dispute may be resolved through arbitration at the CCMA. A major concern in this respect is that commissioners have the discretion to determine “appropriate awards”. This leaves open the possibility that a worker may not be adequately compensated for losses suffered as a result of being victimised for making the disclosure. Therefore, as with automatically unfair dismissals, provision should be made for remedies to supplement awards made by the CCMA.

Q.3.2. Should such remedy lie against the person who actually acted in contravention of the PDA, or both that person and the employer?

The remedy should lie jointly against the employer and the person who actually contravened the PDA. This will create a greater incentive for employers to maintain appropriate conditions at the workplace.

3.3. Should such a remedy entail the payment of punitive damages?

No measures are provided to discourage the contravention of the PDA and victimisation of whistleblowers. Employers may for example merely build existing remedies into operating costs rather than comply with the PDA. Therefore punitive damages would be useful in countering this.

3.4 Do the existing procedures and remedies set out in the Labour Relations Act, such as internal hearings and arbitration by the Commission for Conciliation, Mediation and Arbitration (CCMA), already cater sufficiently for cases of victimisation by an employer or another person?

The existing procedures set out in the LRA are adequate. However, we are concerned that the remedies are insufficient to encourage whistleblowing.

3.5 If so, would the creation of a new cause of action in terms of the PDA bring about the development of a dual system which could create legal uncertainty and detrimentally affect the administration of sound labour practices?

The provision for a new cause of action should be developed to supplement and not duplicate or replace the provisions in the LRA. In this way a dual system will not be created.

3.4 Criminal offences

4.1 Should it be a criminal offenc e for an employer unlawfully to subject an employee to an occupational detriment?

COSATU is of the opinion that it should be a criminal offence for employers to unlawfully subject workers to an occupational detriment. This is also likely to serve as a deterrent and would counter the power imbalances that undermine the implementation of the PDA.

4.2. Should it be a criminal offence for an employee to make a false disclosure while not knowing or believing it to be true?

We do not believe that this criminal offence should be introduced into the PDA. There are substantial power imbalances between employers and workers. Whereas criminalising an employer's contravention of the PDA would counter this, existing imbalances would only be deepened by introducing the criminal offence described in Question 4.2.. Again this would have the effect of discouraging whistleblowing, which employers may use to intimidate workers against doing. In many instances a disclosure may be made in good faith on the basis of a reasonable suspicion. This is a less stringent test than requiring that a worker know or believe a disclosure to be true.

If employers' contraventions are to be criminalised, then it may appear on the face of it to be fair to criminalise the conduct of employees as well. However, we believe that these should not be considered in the same light. The prejudice suffered by an employer is likely to be minimal if procedures in the PDA are followed. In most instances the disclosure will be made directly to the employer, who will have the power to address false disclosures before any significant damage is done. In comparison contravention of the PDA by an employer means either an automatically unfair dismissal or unfair labour practice. The prejudice suffered by a worker for an employer's contravention is likely to be considerably more severe than if the situation were reversed. Finally, employers may resort to disciplinary mechanisms where a disclosure is proven to be malicious.

Accordingly, we would strongly resist any attempt to introduce a criminal offence as described in Question 4.2.

4.3 How would the creation of these offences within the PDA impact on the existing laws and practices that regulate relations between employers and employees?

If contraventions of the PDA by employers were to be criminalised, this would complement existing laws and practices both in the PDA and general labour legislation. However, it would be important to ensure that the PDA provisions supplement labour provisions so that this does not lead to a dual system.

As noted above we do not support the introduction of a criminal offence where an employee makes a disclosure not “knowing or believing” this to be true.

4. Other issues

We wish to note support for the proposals of the Open Democracy Advice Centre(ODAC) in respect of the following areas that are not covered in the Issue Paper:
  1. Protection of the identity of whistleblowers if this is requested;
  2. Introduction of a duty to investigate a disclosure, with the failure to do so being treated as a detriment;
  3. Right to interdictory relief;
  4. Amendment in respect of the close-ended list under the definition of “occupational detriment” under section 1(vi) to ensure an open-ended list that covers all eventualities.