Whistleblowing

Whistleblowing can happen in any workplace. It may not happen often with small businesses, and as an employer, you may think your business isn't at risk of having a whistleblower. But it's still important to know what it is and what to do if an employee ever decides to engage in whistleblowing against your business.

What is a whistleblower?

A whistleblower is an employee who reports wrongdoing happening in their place of work. In a general context, a whistleblower is anyone who reports something illicit or fraudulent happening anywhere. But in this article, the focus is on someone who reports wrongdoing where they work.

Not everyone who reports a wrongdoing is a whistleblower. If the employee is reporting something that only affects them, like a workplace dispute, then they're not seen as a whistleblower. To qualify as a whistleblower, you must be reporting something immoral, unsafe, or illegal that is of public interest and affects a group of people, especially the general public.

Who the wrongdoer is and the nature or impact of what they are doing is also important for the report to be considered whistleblowing.

A whistleblower may report their concerns to either someone in their organization, like a supervisor, an outside organization, a governing body or law enforcement.

Whistleblowing can be good for your business. As an employer, you have a lot of responsibilities and may not always have time to track any wrongdoings within your business. Internally, a whistleblower can report misconduct by a superior or employee that affects everyone else or the business, such as the misappropriation of funds.

As an employer, you can make room for this by creating anonymous channels to facilitate easy reporting, having a whistleblowing policy and providing whistleblower protections.

Common terms to note in whistleblowing

Let's take a quick look at some of the common terms used in whistleblowing cases. This will help employers better understand them and apply them when handling cases of whistleblowing in their business.

Wrongdoing

Wrongdoing is used to describe misdeeds, gross mismanagement, criminal offence, misuse of public funds, or breaking laws and other activities that aren't in the best interest of the general public.

It can also refer to breaches of the code of conduct and directing someone else to participate in activities that cause actual damage to the health &safety of people and the environment.

Reprisal or retaliation

A reprisal is any action taken against an employee who has made a protected disclosure or cooperated with a tribunal investigating a report of wrongdoing. Retaliations are prohibited across Canadian jurisdictions and by various sources of legislation (e.g., human rights legislation, occupational health and safety legislation). Not all actions or prejudicial acts will constitute reprisal, there must be a connection between the prejudicial act or omission and an employee’s intent to enforce the rights of the general public.

Examples of reprisals include termination, disciplinary actions, demotions, victimization or any other activity that negatively affects the employee's working conditions.

Disclosure

Disclosure is when an employee reports or presents information on misdeeds or wrongdoings in the workplace. These activities must have an effect on public interest and negatively affect the life, and health & safety of Canadians, or the environment. Under Canadian federal law, the Public Servants Disclosure Protection Act (PSDPA) ** and the **Criminal Code (s. 319(2), disclosures are protected, they are confidential.

Types of protected disclosure

Canadian legislation protects the identity of a whistleblower in the public sector. Legislation across Canada prohibits anyone from disclosing the identity of a whistleblower without their consent, except in certain limited circumstances. The PSDPA allows individuals to make a disclosure anonymously, but the information provided must be sufficient enough so that the law enforcement agency can investigate the matter.

The identity of the person reporting or cooperating is usually known when a protected disclosure is made. This means it was made in good faith by the employee and follows the whistleblower protection directive.

Protected disclosures are:

• done in accordance with PSDPA guidelines
• required by law
• undergoing a parliamentary hearing

Concerns that count as whistleblowing

Concerns of wrongdoing that count as whistleblowing and give an employee protection under the law include:

• a miscarriage of justice
• actual damage or risk of damage to the environment
• a criminal offence like fraud
• putting someone's health & safety at risk
• breaking the law
• covering up wrongdoing

Concerns that don't count as whistleblowing

Not all concerns of misdeeds in a workplace counts as whistleblowing. Legal protections for whistleblowers vary across Canadian jurisdictions, so it is important that employers review and refer to the laws applicable to their jurisdiction. Some disclosures that do not count as whistleblowing include:

• Personal grievances (e.g., discrimination, bullying, harassment)
• Matters of opinion (i.e., concerns based on personal opinion or belief, rather than evidence of wrongdoing)
• Matters that are already public knowledge (concerns that have already been made public, such as in the media)
• Matters that are not in the public interest (concerns that do not have a significant impact on the public, such as the personal conduct of a co-worker)

Cases like these should be handled internally by the employer. Employers can manage protected disclosures by creating a whistleblowing policy that outlines the procedures and protections for employees reporting wrongdoing. Furthermore, employees should be trained on a protected disclosure policy so that they know how to report wrongdoing internally and are also aware of their rights. The training should emphasize the importance of confidentiality. Employees should be protected from any kind of retaliation.

What is an example of whistleblowing?

Let's take a quick look at some popular real-life examples of whistleblowing in the workplace to better understand the subject.

Reporting tax evasions

An employee at an accountancy firm in Canada discovers that the company is systematically under-reporting its income and evading taxes. The employee decides to blow the whistle on their company’s tax evasion and contacts the Canada Revenue Agency (CRA) and leaked documents as evidence of the wrongdoing. The CRA investigates the employee’s allegations and corroborates the company has indeed been evading taxes. The CRA takes enforcement action. It issues a tax bill, demands penalties, and fines company executives, who also face criminal charges.

Revealing money laundering

A banker revealed a billion- money laundering scheme operating in one of their branches for years. He discovered that accounts that were supposedly dormant were conducting transactions worth millions of Canadian dollars every day. The employee reported his findings, and the disclosure resulted in 10 employees of the bank being arrested.

Discovering contamination of the environment

A doctor in Alberta noticed that people in his community had unusually high rates of a rare kind of cancer. After a health review of the community, he discovered the oil extraction activities of oil and gas companies in the area were negatively affecting the health of residents and reported the situation in good faith to Health Canada.

What is the whistleblowing law in Canada?

Canada has legislation in place that protects whistleblowers from retaliation and that provides confidentiality for the identity of the individual that brings forward a protected disclosure. Employers should note that while there are some protections for whistleblowers in the private sector, these protections are not as strong as the ones available in the public sector.

Among the legislation that best protects whistleblowers in the private sector is the Criminal Code. It is an offence for an employer to take reprisals against an employee who has made a protected disclosure of wrongdoing to a law enforcement agency or public body (s. 425.1). There are also a number of provincial legislations that offer protections for whistleblowers in the private sector. Under employment standards legislation, employers cannot terminate employment or otherwise discriminate against an employee who disclosed a contravention of an employment standards statute.

The Occupational Health and Safety Act (OHSA)

This Act protects whistleblowing in regard to health and safety laws. It stops employers from disciplining staff who report health & safety violations in both the federal public sector and the private sector.

In addition to the Criminal Code and provincial laws, there are a number of additional legislations that could provide protection for whistleblowers in the private sector. The Income Tax Act (ITA) prohibits employers from retaliating against employees who make a disclosure of information that they, in good faith, believe a person has committed (or intends to commit) an offence under the Act.

The Competition Act

Some sectors also have laws that guide whistleblowing in their industry. For example, the Competition Act has provisions for protecting the identity of whistleblowers who report information to the Competition Bureau about a criminal offence or violation of the Competition Act.

In the public sector, there are various federal and provincial legislation that provides protections for whistleblowers against termination of employment or reprisal (e.g., demotion, harassment, discrimination). Furthermore, these laws provide confidentiality protections to the identity of the whistleblower and the disclosed information

The Public Servants Disclosure Protection Act (PSDPA)

The PSDPA was passed in 2005 to establish a procedure for reporting wrongdoing in the workplace in the public sector and providing protection for those who come forward. Under the Act, there should be no retaliation against whistleblowers. It also makes provisions for public sector employees to disclose their concerns about wrongdoing to the public or the Public Sector Integrity Commissioner.

The commissioner also has the power to freeze any acts of retaliation or disciplinary measures against a whistleblowing employee until an investigation is complete. A protection tribunal can be set up to resolve reprisal complaints and make sure there is no disciplinary action against the whistleblower.

Provincial whistleblowing legislation in the public sector

Whistleblowing protection laws in the public sector vary across Canadian jurisdictions. Most of these laws provide protection to government employees (e.g., agencies, boards, commissions), and others have expanded their protections to a number of Crown Corporations. Under these legislations, employees in the public sector that provides a protected disclosure or participate in investigations are safeguarded from termination, reprisals, or other measures that adversely affect an employee’s work conditions.

Canadian provinces with whistleblowing protection laws in place include:

• Public Interest Disclosure Act (PIDA – British Columbia)
• Public Service of Ontario Act (PSOA – Ontario)
• Public Interest Disclosure (Whistleblower Protection) Act (Alberta)
• The Public Interest Disclosure Act (PIDA – Saskatchewan)
• The Public Interest Disclosure Act (PIDA – New Brunswick)
• The Public Interest Disclosure Act (PIDA – British Columbia)
• Public Interest Disclosure (Whistleblower Protection) Act (PIDA - Manitoba)

These pieces of legislation provide varying degrees of protection to whistleblowers and impose penalties of varying degrees of severity. Employers must refer to and review the whistleblowing legislation applicable to their jurisdiction to ensure their compliance.

What legal protections can whistleblowers in Canada expect?

As mentioned above, there are a laws to protect whistleblowers in Canada, but they are limited.

The criminal code prevents employers from demoting, terminating or taking disciplinary action against an employee to threaten them against making a disclosure or for the act of whistleblowing.

So, as an employer, you cannot stop an employee from whistleblowing or threaten them with termination or other disciplinary action if you suspect they are going to make a disclosure. It's important for all employers to be aware of this because the penalties for violating these protections include imprisonment and hefty fines.

Who is protected by law?

Most employees are protected by any of the laws protecting whistleblowers mentioned above. Some examples of protected persons include:

• trainees, e.g a student nurse or trainee accountant
• apprentices, e.g. construction or plumbing apprentices
• employees of a business
• contract workers, e.g an agency worker

Advise your employees to seek professional independent advice if they aren't sure whether they're protected or not.

Duty of fidelity

Every employee has a duty of fidelity and confidentiality to you as their employer. This means they have a duty to come to you first when they notice wrongdoing or gross mismanagement of business resources.

Advise employees that they should not go to a federal government regulatory body, the media or the police first before reporting to you. If they do this, they may not be protected by the law. For this reason, it is best practice that employers have a protected disclosure policy in their organization and that employees are trained about how to disclose wrongdoing or concern for wrongdoing internally.

Before reporting a concern

Whistleblowing is a serious issue and should not be taken lightly or misused by your employees. As an employer, it's your duty to educate employees and inform them on what to know before reporting a concern.

• Make sure there is a valid case

Whistleblowing doesn't only have to occur in extreme cases, but there must be a valid, substantial and specific danger. This includes criminal offences, coverups, breaches of health & safety and other dangers to the public interest.

• Report the right concerns

As mentioned earlier, not all concerns are valid cases of whistleblowing. Employees should not use this as a way to make false reports or settle personal grievances. Such concerns should be raised with you as the employer, a manager or a supervisor.

• Use the appropriate channels

Employees have a duty of fidelity to their employer. Let your employees know it's best to come to you first with their concerns about wrongdoing in the workplace. It can also help to have a whistleblowing policy where the procedure for how to report corruption is outlined so employees know exactly what to do when they witness wrongdoing.

Managing whistleblowing with BrightHR

Managing whistleblowing in your business can be tricky if you don't have experience or understand the law around whistleblowing. If you aren't careful, you may end up with fines or other penalties for not handling it in line with established regulations.

As a small business owner, seeking legal advice each time you have an employment relations concern can be expensive.

That's where BrightHR comes in. With unlimited access to our employment relations experts, you can rest easy knowing you're following due process when handling cases of whistleblowing.

Need advice? book a FREE DEMO or call us on 1 888 220 4924.