Blowing the Whistle
"It is here, Hamlet. Hamlet, thou art slain;
- Shakespeare, Hamlet
Source: taken from Whistleblowing Outlets Hillman Project email@example.com September 1995
I read an article in The Dominion (16 March 2000) called "Protection for Whistleblowers" which said the New Zealand government has announced that legislation to protect whistleblowers will include the private sector. Amendments will be made to the Protected Disclosures Bill to protect people who disclose information on serious wrongdoings in their workplace. (Karen Silkwood should have immigrated to New Zealand.)
by Anthony Drake
The Protected Disclosures Act 2000 - colloquially known as the "Whistleblowers Act" - came into force on 1 January 2001. It provides protection for employees who, in accordance with the Act, make disclosures of information about serious wrongdoings.
In 1994 Neil Pugmire, a nurse at Lake Alice Hospital, expressed concern to the management over the release of dangerous psychiatric patients into the community. (One of those patients went on to kidnap and attempt a violation of a six year-old boy, and to indecently assault two other children.) Dissatisfied with the response, he went public with his concerns. He was suspended and later dismissed for his actions. (The Employment Court subsequently reinstated him.)
Purpose of the Act
The purpose of this Act is to promote public interest in the disclosure of important information - by facilitating the disclosure and investigation of matters of serious wrongdoing in or by an organisation. The Act provides procedures under which such disclosures can be made and gives statutory protection from liability or unfavourable treatment for employees making disclosures. The term "employee" is defined to include former employees, home workers, persons seconded to an organisation, and independent contractors working for an organisation.
Which disclosures are protected? To qualify as a protected disclosure under the Act the information must relate to "serious wrongdoing". This includes:
In addition the "whistleblower" employee must:
Process for Making a Disclosure
In general, the Act provides that disclosures must be made in accordance with internal procedures established by and published within the organisation. It is mandatory for public sector organisations to establish internal procedures. Private sector organisations are not required to have internal procedures; but if they do, employees will be encouraged to make disclosures internally to the organisation rather than going public. The procedures must be appropriate for receiving and dealing with information about serious wrongdoing within the organisation. The procedures must comply with the principles of natural justice, identify the persons in the organisation to whom a disclosure may be made, and include reference to an appropriate Authority in certain circumstances (where, for example, the person making a disclosure does not feel that it is being taken seriously or being adequately investigated). Information about the existence of internal procedures must be published widely within the organisation and at regular intervals.
Despite the mandatory obligations, there is no provision in the Act providing for a penalty in cases of non-compliance. In the absence of specific internal procedures, the disclosure process is less defined. An employee is simply required to make a disclosure to the head or deputy head of an organisation. If the employee believes that the head of the organisation is implicated in the wrongdoing, then disclosure may be made directly to the "appropriate Authority". An appropriate Authority includes the Commissioner of Police, Solicitor-General, Ombudsman, or Director of the Serious Fraud Office.
Employers should adopt a disclosure policy
Our recommendation is that employers should adopt a policy relating to employee disclosures about serious wrongdoing. The policy should comply with the spirit intended in the Protected Disclosures Act by:
If your organisation requires further information about the Protected Disclosures Act or assistance to develop a procedure policy, contact the Bell Gully Employment Law Team.
Disclaimer: This publication is necessarily brief and general in nature. You should seek professional advice before taking any action in relation to the matters dealt with in this publication.
Source: bellgully.co.nz January 2001 © Bell Gully 2002
by Brian Martin
Whistleblowers can readily understand other whistleblowers. They have seen a problem and spoken out about it. They know when something is wrong and are simply doing the right thing by trying to correct it. It is not easy for whistleblowers to understand why others don't react the same way. Why do co-workers sit by and do nothing?
Why do top managers cover up problems? It is tempting to say that co-workers are "gutless" or that managers are "corrupt". But that doesn't explain why they behave the way they do. How do they perceive problems? How do they justify their behaviour? What do they really think about whistleblowers?
Most books about bureaucracies don't provide insight into these issues. One book which does is by Robert Jackall, entitled Moral Mazes: The World of Corporate Managers (Oxford University Press, 1988). Jackall obtained access to two large US corporations and a public relations firm. He spent many months interviewing managers and watching them in action as well as reading many documents. Jackall treated the world of corporate managers as a culture, like an anthropologist studying an alien tribe. His aim was to understand the corporate culture social dynamics. His case studies of activities and crises provide illustration to his analysis.
The successful manager is one who can adapt to the prevailing ideas, who can please the boss, who can avoid being blamed for failure, and who can build alliances with supporters above and below.
Jackall devotes a chapter, "Drawing Lines", to the corporation's response to whistleblowers. White was a health professional who tried to raise concern about hearing loss among many workers at a corporation's textile mills. He collected data and wrote a report. Due to his professional training and religious background, he felt this was a clear moral issue. But his attempts failed. He did not have supporters higher up. As well, his recommendations for change threatened powerful interests. Other managers felt uncomfortable with White's moral stance. "Without clear authoritative sanctions, moral viewpoints threaten others within an organisation by making claims on them that might impede their ability to read the drift of social situations. As a result, independent morally evaluative judgments get subordinated to the social intricacies of the bureaucratic workplace ... Managers know that in the organisation right and wrong get decided by those with enough clout to make their views stick." White ended up leaving the company.
Brady was an accountant who found various discrepancies in a company's financial operations. At one stage, "Brady discussed the matter with a close friend, a man who had no defined position but considerable influence in the company and access to the highest circles in the organisation. He was Mr Fixit - a lobbyist, a front man, an all-around factotum, a man who knew how to get things done." This friend took Brady's anonymous memorandum to a meeting of top figures in the corporation. "Immediately after the meeting, Brady's friend was fired and escorted from the building by armed guards." Brady now realised it was the chief executive himself who was fiddling the books. Brady was under suspicion of having written the memo. He eventually presented all his evidence to the company's chief lawyer, who wouldn't touch it. "Right after Brady's boss returned from Europe, Brady was summarily fired and he and his belongings were literally thrown out of the company building."
Nothing new here: another whistleblower dismissed. What is most interesting in Jackall's account is his description of how other managers saw the situation. They saw "Brady's dilemma as devoid of moral or ethical content. In their view, the issues that Brady raises are, first of all, simply practical matters. His basic failing was, first, that he violated the fundamental rules of bureaucratic life. These are usually stated as a series of admonitions.
The second response of managers to Brady's case was that he had plenty of ways to justify not acting. Others obviously knew about the fiddling of the books but did nothing. They were all playing the game. Why should Brady worry about it? He would only make himself vulnerable.
The third response of managers was to say that those things that Brady got upset about - "irregular payments, doctored invoices, shuffling numbers in accounts" - were ordinary things in a corporation. "Moreover, as managers see it, playing sleight of hand with the monetary value of inventories, post- or pre-dating memoranda or invoices, tucking or squirreling large sums of money away to pull them out of one's hat at an opportune moment are all part and parcel of managing a large corporation where interpretations of performance, not necessarily performance itself, decide one's fate."
The fourth and final response of managers to Brady's case was to say that he shouldn't have acted on a moral code that had no relevance to the organisation. "Brady refused to recognise, in the view of the managers interviewed, that 'truth' is socially defined, not absolute, and that therefore compromise, about anything and everything, is not moral defeat, as Brady seemed to feel, but simply an inevitable fact of organisational life. They saw this as the key reason why Brady's bosses did him in. And they too would do him in without any qualms. Managers, they say, do not want evangelists working for them."
After these events, the chief executive - the one who fiddled the books - retired, elevated his loyal lieutenant to his former position and took an honorary position in the firm, as head of internal audit.
Concerning this case, Jackall concludes: "Bureaucracy transforms moral issues into immediately practical concerns. A moral judgment based on a professional ethic makes little sense in a world where the etiquette of authority relationships and the necessity of protecting and covering for one's boss, one's network, and oneself supersede all other considerations and where non-accountability for action is the norm."
Jackall's analysis is based on just a few US corporations. He had to approach dozens - and adapt his pitch - before he found any that granted access. There is no easy way to determine which of his insights apply to other corporations, other types of bureaucracies, and other countries. But if the same sorts of dynamics occur, Jackall's examination shows that whistleblowers are up against something much bigger than a few corrupt individuals, or even a system of corruption. The problem is the very structure of the organisation, in which managers who adapt to the ethos of pragmatism and who please their bosses are the ones who get ahead. To eliminate wrongdoing in corporations requires not just replacing or penalising a few individuals, but changing the entire organisational structure. It is the structure, within the wider corporate culture, that shapes the psychology of managers and creates the context for problems to occur.
Source: uow.edu.au/arts The Whistle (Newsletter of Whistleblowers Australia) March 97; Martin is (was?) the national president
For alternative views to those of prevailing corporate culture, see also:
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