Whistle-blowing – lessons from the Joanne Harrison investigation

In February 2018, the Government announced that a review of the Protected Disclosures Act 2000 (the Act) had begun.  The review will explore whether the current law and procedures to protect whistle blowers needs to be strengthened.

The Government’s review follows recommendations by the State Services Commissioner in 2017, after investigating the Joanne Harrison case, that the Act be reviewed and updated to make it more “user friendly” (for people making disclosures) and to introduce reporting and monitoring requirements.

The Protected Disclosures Act 2000

The Act provides a scheme to protect “whistle-blowers” in both the public and private sectors.  Its stated purpose is to promote the public interest by both by facilitating the disclosure and investigation of serious wrongdoing in or by an organisation, and also by protecting employees who make such disclosures.

Serious wrongdoing is defined in the Act and includes: unlawful, corrupt or irregular use of funds or resources of a public sector agency; conduct that poses a serious risk to public health, safety or the environment; conduct that poses a serious risk to the maintenance of the law, including the prevention, investigation and detection of offences, and the right to a fair trial; conduct that amounts to an offence; and conduct by a public official that is oppressive, improperly discriminatory, or grossly negligent, or that constitutes gross mismanagement.

An employee wishing to report serious misconduct must generally comply with their organisation’s internal procedures for making disclosures, but in certain circumstances a disclosure can be made to the head of the organisation or an “appropriate authority”.  A protected disclosure made in good faith and in accordance with the Act gives an employee certain protections, particularly: the ability to raise personal grievance for any retaliatory action; immunity from civil and criminal proceedings; confidentiality (with certain limitations); and protection under the anti-victimisation provisions of the Human Rights Act 1993.

Joanne Harrison’s offending and the State Services Commission’s (SSC) investigation

In February 2017 former Ministry of Transport senior manager Joanne Harrison was sentenced to three years, seven months in jail, following her earlier admission of fraud. Between 2012 and 2016, by authorising false invoices, she stole more than $725,000 from the Ministry.

Following the discovery of Ms Harrison’s fraud, there were a number of investigations including by the SSC into the treatment of Ministry staff who raised concerns about the conduct of Ms Harrison. The investigation (which was carried out by former Deputy State Services Commissioner Sandi Beattie) focussed on whether any current or former Ministry employees had been disadvantaged as a result of raising concerns about Ms Harrison.  In particular, there was media attention and public concern that Ministry employees who had raised issues about Ms Harrison were subsequently made redundant in a restructure that Ms Harrison had been involved in.

SSC’s report on this investigation was released in July 2017.  It found that:

(a)         No Ministry employees had been made redundant because they raised issues about Ms Harrison.  Rather, there was a genuine reason for the changes made.  However, three former employees in the finance team were disadvantaged by the way they had been treated, particularly by being made redundant just before Christmas – approximately seven and half months before the changes (an automated invoice processing system) could take effect.  This treatment seemed to have stemmed from advice provided by Ms Harrison to the decision-makers.  These employees have received a public apology and an agreed (but confidential) package of redress and settlement.

(b)         Another Ministry employee had been disadvantaged by Ms Harrison’s actions, when Ms Harrison claimed that a Ministry policy prevented the staff member receiving a higher duties allowance for her secondment (when no such policy existed).  She has also received a public apology and will receive compensation.

(c)         Two other cases where Ministry employees may have been treated badly by Ms Harrison were identified, but were outside the scope of the SSC investigation.  These have been referred to the Secretary for Transport.

(d)         The SSC should look into the operation of complaints procedures, including the operation of the Act, in the broader public service.

Standards for public sector agencies and possible legislative reform

Following release of the SSC’s report, the State Services Commissioner recommended that the Act be reviewed and updated – particularly to make it more “user friendly” (for people making disclosures) and to introduce reporting and monitoring requirements.

In addition, he published new standards for public sector agencies on having effective systems for their staff to raise and escalate issues or concerns, including under the Protected Disclosures Act.  The Acting in the Spirit of Service – Speaking up standards outline SSC’s minimum expectations, and contain three key elements:

(a)         Getting the foundations right from the start (leadership, awareness, communication and training);

(b)         Making sure processes are robust (taking concerns seriously, and having systems for monitoring, reporting, investigation, and communication); and

(c)         Keeping people safe (including providing “tailored and dedicated support and protections to staff to keep them safe from reprisal”).

In light of the SSC’s report and the State Services Commissioner’s comments, the Government has announced that the Act will be reviewed.  The review process has begun with workshops with key stakeholders from the public and private sector who have knowledge and experience with the Act.  The expressed aim of the workshops is to gather perspectives on the key issues and challenges with the current Act and explore different options for reform.

Key lessons

Public sector organisations should ensure that have integrated the SSC’s expectations into their organisation’s policies and procedures relating to protected disclosures/whistleblowing.  SSC’s expectations go beyond previous guidance – particularly in relation to support for whistle-blowers – and should be taken seriously.

All organisations should have a protected disclosures/whistleblowing policy in place which is consistent with the current Act.

Over the longer term, organisations should also keep a watching brief on legislative reform and seek advice to ensure their policies reflect any changes to the whistle-blower legislation.

Who can help

Megan Richards

Partner - Employment and Public Law

Megan leads both the public law team and the Wellington employment team and acts for both public and private sector clients. She has practiced law for over 20 years in top tier firms in New Zealand, Australia and London, and sits on the partnership’s board.

Her practice traverses strategic, litigious and time-critical day-to-day advice on all aspects of Public law and Employment related law. Megan regularly acts for numerous government departments and crown entities (including central government education agencies).

Bringing significant experience to all employment related matters, Megan regularly advises on drafting employment agreements and HR policies, managing poor performance, restructuring and redundancy, disciplinary investigations and dismissals, leave entitlements, minimum standards compliance, secondments, fixed term employment, KiwiSaver, collective bargaining, independent contractor arrangements, establishing business in NZ and recruiting staff, and restraints of trade and other post termination obligations.

As a recognised expert in Employment law, Megan is on the Editorial Boards of employment publications and is also the co-author of the Laws of New Zealand Employment chapter. As a recognised expert in Public Law, Megan is also an external member of the Legislation, Design and Advisory Committee (which is an appointment by the Attorney General).

Megan is also a Public Law expert and advises on exercise of statutory powers, legislative drafting, discrimination and judicial review proceedings, risk management and legal compliance and governance.

Megan’s leading expertise across Employment and Public Law is consistently noted in independent national and international peer guides, including Chambers Global and Chambers Asia Pacific.

She also has specialist expertise in PPPs having acted for the Ministry of Defence (UK) on their defence procurement and Railtrack plc on the privatisation of the UK railway.

Megan Richards

Partner


Employment and Public Law
Wellington

P: +64 4 498 5023
M: +64 21 676 430
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Gillian Service

Partner - Employment

Gillian is an experienced advocate with a pragmatic approach that is highly valued by clients. She helps clients manage risks and protect business proprietary interests. Gillian negotiates executive severance arrangements and represents clients in personal grievance claims through all levels of the New Zealand court system.

Her broad employment practice includes advising on restraints of trade and protection of confidential information; industrial relations and collective bargaining matters; restructuring programmes including outsourcing, redundancy and consultation processes; and health and safety matters.

Gillian is an internationally recognised employment law specialist, with significant experience practicing in top tier law firms in New Zealand, Scotland and England.

Gillian Service

Partner


Employment
Auckland

P: +64 9 353 9817
M: +64 21 366 760
Email

Aaron Lloyd

Partner - Dispute Resolution and Litigation

Aaron is a partner in the firm’s dispute resolution division. He advises clients on a range of litigious and risk related matters, with particular expertise in the areas of white collar criminal and regulatory affairs, sports law and employment law.  Aaron leads our sports law practice, and is a member of the firm’s health and safety and public law teams.

Aaron is well regarded by clients for his ability to analyse and strategise complex situations. He is recognised by both clients, and his peers, for being able to implement pragmatic and commercial strategies to minimise risk and create opportunity for our clients. His ability has resulted in clients avoiding significant litigation and commercial consequences.

In 2017 Aaron was named by Chambers & Partners (Asia Pacific) as one of New Zealand’s leading sports lawyers, and has been recognised for his employment and sports law expertise in other legal directories including Asia-Pacific Legal 500 and Who’s Who.

Before joining MinterEllisonRuddWatts Aaron practiced as a barrister with Paul Davison QC, and has lectured at the University of Auckland.

Aaron Lloyd

Partner


Dispute Resolution and Litigation
Auckland

P: +64 9 353 9971
M: +64 21 532 000
Email

Emma Warden

Special Counsel - Employment

Emma, a Special Counsel in the Wellington Employment team, has been with the firm since 2002. Emma undertakes a wide variety of work in the areas of employment law, health and safety, public law and education law.

Emma’s areas of expertise span both contentious and non-contentious issues, including drafting employment documentation, representing both private and public sector employers at mediation, the Employment Relations Authority and the Employment Court, and providing legal opinions on employment, health and safety, and public law issues.

Emma assists clients with employment due diligence and provides advice on all employment-related aspects of taking on new staff, or buying or transferring a business. She also assists clients with employment issues arising in the context of receiverships. Emma has extensive experience assisting employers to carry out restructuring, poor performance and disciplinary processes.

Emma Warden

Special Counsel


Employment
Wellington

P: +64 4 498 5041
M: +64 21 656 033
Email

Chris Baldock

Senior Associate - Employment

Chris has extensive experience advising corporate clients on a wide range of employment and health and safety matters.

With a background in commercial litigation, Chris regularly represents clients in mediations and in proceedings before the Employment Relations Authority and the courts. He advises on all employment related matters, including statutory compliance, restraints of trade, disciplinary investigations, restructuring processes, personal grievances, poor performance, leave entitlements, employment agreements and policies, industrial relations, and workplace health and safety.

Chris Baldock

Senior Associate


Employment
Auckland

P: +64 9 353 9927
M: +64 21 474 321
Email

June Hardacre

Senior Associate - Employment

June has broad experience in all aspects of both New Zealand and English employment law. June regularly advises on senior executive appointments and terminations; restraints of trade and protection of confidential information; performance and disciplinary processes; restructuring, redundancy and outsourcing programmes; industrial relations and collective bargaining matters; whistleblowing and protected disclosures; and employee data privacy issues. June has been involved in litigation at all levels of the New Zealand court system, both in relation to substantive disputes and urgent interlocutory matters. June has significant experience in acting for both private and listed companies in the financial services, pharmaceutical and healthcare, and food and beverage sectors.

June recently returned to New Zealand, having practiced at a magic circle firm in London for several years, and at another top tier New Zealand law firm prior to that. During her time in London, June regularly advised leading private equity houses and FTSE100 companies on employment law and regulatory issues.

June Hardacre

Senior Associate


Employment
Auckland

P: +64 9 353 9723
M: +64 21 105 9616
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