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Home / Business / Economy / Employment

Whistleblowing takes nerves of steel

Diana Clement
By Diana Clement
Your Money and careers writer for the NZ Herald·NZ Herald·
13 Mar, 2015 04:00 PM6 mins to read

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Edward Snowden ended up on the run from the US as a result of his NSA whistleblowing. Photo / Brett Phibbs

Edward Snowden ended up on the run from the US as a result of his NSA whistleblowing. Photo / Brett Phibbs

Would-be whistleblowers need to be aware of the pitfalls in revealing confidential information about an employer.

Want to be a whistleblower? Is there something happening at your organisation you'd like to spill the beans on?

Could you be the next Edward Snowden or Chelsea (Bradley) Manning? They are famous for exposing US military and government secrets to the public.

Whistleblowing is about exposing dishonest or illegal wrongdoings at your organisation.

There are many cases where whistleblowing is appropriate. Perhaps you're working in a hospital that is fudging waiting-list statistics, or an NZX-listed company that isn't reporting the truth about its financial situation to the investing public.

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New Zealand has several official bodies that are geared up to receive disclosures from whistleblowers. They include the police, the Parliamentary Ombudsman, the Serious Fraud Office, Financial Markets Authority, the Commerce Commission, the Inland Revenue Department and even councils for breaches of the Resource Management Act.

Whistleblowing takes nerves of steel. It involves releasing confidential information belonging to your employer. "There are some very onerous confidentiality terms employees are required to sign," says Don Mackinnon, partner at SBM Legal.

But there are protections in law - in particular the Protected Disclosure Act. This piece of law is designed to encourage people to report serious wrongdoing in their workplace and gives them protection. Employment contracts can't override it.

But beware. Disclosures of confidential information aren't automatically protected by the law, says Mackinnon.

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"You need to have a reason that [overrides] the confidentiality of the information," he says.

The public interest must be greater than the need for confidentiality.

Whistleblowing is fraught with risks. If you don't follow the rules you end up risking your job, or like Manning and Snowden you could end up in jail or on the run - although those cases are extreme.

The public interest exception, for example, doesn't cover you if you know the allegations are false, you act in bad faith, or the information you're disclosing is protected by legal professional privilege.

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In the case of public-sector employees there is always an internal procedure and you're required to follow that internal procedure first unless there is a very good reason not to - such as one of the directors of the company being involved in the wrongdoing.

It's really important to note that the disclosure has to be to someone appropriate, which doesn't mean your mates, the press or even the WikiLeaks website.

Whistleblowing turned to custard for Lydia Maoate, a security guard for Allied Security. With the help of her union Ms Maoate went to the Dominion Post newspaper with allegations that her employers had encouraged staff to cheat in NZQA courses.

The article inadvertently identified Ms Maoate. She argued in a subsequent Employment Relations Authority hearing that her leak came under the Protected Disclosures Act. But the authority ruled that the media was not an "appropriate authority" and stripped her of her protections.

In that specific case an approach to the Industry Training Organisation or to NZQA might have been warranted, says Mackinnon.

Feeding information to the media is the preferred method by some whistleblowers because information going public will often result in changes far more quickly than if it is reported to a public body.

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The right of journalists to protect the confidentiality of their sources is widely recognised and is spelled out in Section 68 of the Evidence Act. That doesn't help if your employer guesses who you are.

We have surprisingly few whistleblowers in New Zealand, says Mackinnon. That is because we have low levels of corruption by international standards.

Having said that, there are times when whistleblowing didn't happen, but could have saved lives and people's life savings. Examples of that are safety issues at Pike River Mine and the illegal actions of finance company directors.

In some overseas countries there are financial rewards for being a whistleblower.

In the United States, for example, cyclist Floyd Landis could receive up to $25 million if a $100 million case against shamed teammate Lance Armstrong is successful.

Landis claims Armstrong defrauded the US Government, which was his sponsor.

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Such a system would bring people forward, says Mackinnon. But we have to be careful they are coming forward for the right motives, he says. Here in New Zealand whistleblowing in bad faith strips you of your protections and it could backfire.

Organisations aren't allowed to retaliate against bona-fide whistleblowers. In reality it can be difficult for staff after they've made a protected disclosure. That happened to Maide Koroi, who took her case to the Employment Relations Authority.

Ms Koroi had a gripe with her company over a deal she'd made to have company vehicles parked on her land. At the same time she became aware that an employee at her company, Excell Corporation, was using company staff to carry out private work and blew the whistle.

Excell dealt acceptably with the protected disclosure. The trouble came when Koroi went to return to work after a period on gardening leave. She claimed that she was constructively dismissed on her return by being asked to work alongside staff she previously supervised.

"The deficiencies in this aspect of the process amount to unjustified actions on behalf of Ms Koroi's employer and she has a personal grievance in this regard," the ERA concluded. It awarded her $3600 for hurt and humiliation.

Whistleblowers who don't play by the rules risk being taken to court themselves. If, for example, you use your information to try to extort money from your employer or someone else, says Mackinnon, you are committing a crime. You could also be taken to a civil court if you make an allegation that is defamatory.

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"Doing it right is absolutely crucial, " says Mackinnon. "The Protected Disclosures Act is not simple to follow."

Would be whistleblowers need to ask themselves:

• What is my motivation?
• What would happen to me if I was found out?
• Would it affect my career?
• Could I live with my name going public?
• Can I verify what I am saying with evidence?
• Could I withstand attacks on my credibility?

The Ombudsman's office even has a guide, which can be found here.

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