The Protected Disclosures Act of 2000

Jan du Toit

During our public courses we briefly touch on the subject of the Protected Disclosures Act (PDA) of 2000 (Act 4 of 2000) when discussing sections 186 and 187 of the LRA and it is interesting to note how few employers are actually aware of the rights employee’s have under this act.

The PDA is also known as the whistleblowers act and provides procedures in terms of which any employee may disclose information relating to an offence or a malpractice in the workplace by his or her employer or fellow employees. The act further makes provision for the protection of an employee that made such a disclosure against any reprisals.

The Act was implemented on 16 February 2001 and is applicable to any disclosure that was made after 16 February 2001 (regardless of when the impropriety took place, as long as the disclosure was made after 16 February 2001). Protected disclosures may be made about the following:

• a criminal offence that has been, is being or is likely to be committed;
• a failure to comply with any legal obligation to which that person is subject;
• a miscarriage of justice that has occurred, is occurring or is likely to occur;
• the health or safety of an individual that has been, is being or is likely to be endangered;
• the environment that has been, is being or is likely to be endangered;
• unfair discrimination as contemplated in the Promotion of Equality and Prevention of Unfair Discrimination Act, 2000 (Act 4 of 2000); or
• any matter referred to above that has been, is being or is likely to be deliberately concealed.

It is important to note that no provision in a contract of employment or other agreement which applies to an employer and employee may attempt to exclude, prevent or discourage an employee from making a protected disclosure. Such an agreement between will have no legal effect.

A protected disclosure may be made to:

1. a legal representative. The person being consulted by the employee must be a legal representative whose occupation must involve the giving of legal advice (for example, an attorney or legal representative of the employee’s labour union). The information must be given for the purpose of obtaining legal advice.
2. the employer. An employee must act in good faith when he or she discloses the information (“good faith” means that the employee must act in a responsible and honest manner without any motives to gain any personal advantages from making the disclosure). An employer may decide to lay down certain procedures in terms of which disclosures must be made, even that a disclosure must be made to a person other than the employer (a disclosure of this nature will also be regarded as a disclosure to the employer).
3. a Minister or a Member of the Executive Council of a province (MEC). This procedure only applies if the employee’s employer is an individual appointed by the relevant Minister or MEC in terms of legislation or;

• a body (i.e. a board or other institution) appointed by the relevant Minister or MEC in terms of legislation; or
• an organ of state falling within the area of responsibility of the relevant Minister or MEC. An organ of state is any state department or administration in the national or provincial sphere of government or any municipality in the local sphere of government or any other functionary (official) or institution exercising a power or performing a duty in terms of the Constitution or a provincial constitution or exercising a public power or performing a public function in terms of any other legislation.

1. a specified person or body such as the Public Protector or Auditor-General.

• The Public Protector is a high level independent official who receives complaints against government agencies or officials and investigates improper prejudice suffered by a complainant for example as a result of abuse of power. Maladministration, dishonesty or improper dealings with regard to public money, improper enrichment and receipt of improper advantages can also be investigated.
• The Auditor-General who is also a high level independent official must audit and report on the accounts, financial statements and financial management of all national and provincial state departments and administrations, all municipalities and any other institution or accounting entity required by national or provincial legislation to be audited by the Auditor-General.

1. any other person, under certain circumstances. An employee can even make a disclosure to any person, for example, a member of the press, a police official of the South African Police Service or a person working for an organisation which keeps watch over the public or the private sector. The employee must act in good faith and must reasonably believe that the information is substantially true.

In all the circumstances of the case, it must be reasonable to make the disclosure, taking into account;

• the identity of the person to whom the disclosure is made;
• the seriousness of the impropriety;
• whether the impropriety is continuing or is likely to occur in the future;
• whether the disclosure is made in breach of a duty of confidentiality of the employer towards another person.

The employee must not make the disclosure for personal gain, unless for a reward payable in terms of a law and one or more of the following must apply;

• the employee must believe that he or she will be subjected to an occupational detriment if the disclosure is made to the employer; or
• the employee must believe that the employer will conceal or destroy evidence relating to the criminal offence or malpractice if the disclosure is made to the employer; or
• no action was taken in respect of a previous disclosure of substantially the same information to the employer; or
• the criminal offence or malpractice is of an exceptionally serious nature.

The Act prohibits an employer from subjecting an employee to what is called an “occupational detriment”. An occupational detriment occurs when;

• an employee is subjected to any disciplinary action;
• suspended, demoted, harassed or intimidated;
• transferred against his or her will;
• refused transfer or promotion;
• subjected to a term or condition of employment or retirement which is altered or kept altered to his or her disadvantage;
• refused a reference, or is provided with an adverse reference;
• denied appointment to any employment, profession or office;
• threatened with any of the actions referred to above;
• in any other manner adversely affected in respect of his or her employment, profession or office, including employment opportunities and work security, as a direct or indirect result of having made a protected disclosure.

An employee who has been subjected, is subject or may be subjected to an occupational detriment as a result of making a disclosure may approach any court having jurisdiction for protection. The Act relates to the employer / employee relationship, therefore an employee may also use the provisions of the Labour Relations Act, 1995 to protect himself or herself from being subjected to an occupational detriment.

An employee may also request, if reasonably possible or practicable, to be transferred from the post or position occupied by him or her at the time of the disclosure, to another post or position in the same division or another division or if the employee making the disclosure is employed by an organ of state, to another organ of state. The terms and conditions of employment of a person transferred, may not without his or her consent be less favourable than the terms and conditions applicable to him or her immediately before his or her transfer.

If an employee is dismissed as a result of making a disclosure that dismissal is deemed to be an “automatically unfair dismissal” for purposes of section 187(h) of Labour Relations Act, 1995. All other forms of occupational detriment referred to above, are deemed to be “unfair labour practices” as contemplated in section 186(2) (d) of the Labour Relations Act.

In Pedzinski vs. Andisa Securities (Pty) Ltd (formerly SCMB Securities (Pty) Ltd) (2005) 15 LC 8.29.7, the employee was appointed in a half day position as Compliance Manager responsible for investigating misdeals and irregularities in share trading. The position was specifically created for Pedzinski as a result of a back problem preventing her from sitting for extended periods of time.

In November 2002 Pedzinski reported to Schnetler, her superior, as well as other persons in the SCMB Group Compliance Structures that certain irregular trading of shares involving staff members were identified. One of the members implicated was an executive director of respondent, namely Grant Talbot who was Schnetler’s manager. Schnetler was not at all happy with the manner in which Pedzinski reported the irregularities, claiming that he should have approved the decision to report the irregularities to the wider structure within the organization prior to Pedzinski doing so. Pedzinski saw nothing wrong with the manner in which she reported the alleged irregularities to her employer.

In December 2002, just about a week after the above mentioned report was made known, Schnetler made a recommendation to the Human Resource Department that the staff component in the Compliance Department be increased to three full-time employees which would require Pedzinski to work on a full-time basis instead of half a day.

At the end of December 2002 Pedzinski was informed that her position will no longer be a half-day position; as result of the operational requirements of the company her position will be made a full-day position. Pedzinski made several alternative suggestions, all of which were rejected and she was dismissed based on the operational requirements of the company.

Pedzinski referred the matter to the Labour Court as an automatic unfair dismissal in terms of section 187(h) of the LRA, claiming that she was dismissed for making a protected disclosure. Judge Leeuw agreed and found that Pedzinski indeed made the disclosures within the ambit of section 6 of the PDA.

Turning to the reason for the dismissal it was necessary to now prove that the dismissal was automatically unfair in that Pedzinski was dismissed for making a protected disclosure and not based on the operational requirements of the company.

A representative from the HR department testified that discussions on restructuring and the need for three full-time employees were initiated in October 2002 but this was contradicted by Schnetler. He stated that there were no discussions around this issue until December 2002 when he wrote to HR about requesting Pedzinski to work on a full-day basis.

Judge Leeuw found that “from the onset of the consultations, the respondent took the position that the only alternative appropriate measure to avoid dismissal was for applicant to work full time. This was an unfair and unreasonable demand in view of the applicant’s health condition.”.

“I am of the view that respondent was not desirous of making a bona fide attempt to reach consensus with regard to the retrenchment process especially on the alternatives available to it in order to avoid the dismissal.”.

“Although there may have been a reason to restructure the Compliance Department by changing its focus, the respondent’s reason for retrenchment aimed at improving efficiency cannot fall within the ambit of operational requirements because the inefficiency of this Department could be resolved by applying other alternatives other than dismissing the applicant. The consultations undertaken between the applicant and respondent, which were intended to be in accordance with section 189 of the LRA, were not meaningful or even aimed at avoiding applicant’s dismissal… The reason for applicant’s retrenchment was a sham.”. Pedzinski was awarded 24 months of her remuneration as compensation.

Employers are advised not to act against employees making protected disclosures, it could prove to be an expensive way of dealing with a more serious underlying problem within the company.

Source: Government Gazette notice G 34572, Practical Guidelines For Employees In Terms Of Section 10(4)(A) Of The Protected Disclosures Act, 2000 (Act No. 26 Of 2000).

For more information contact [email protected]