Bill encourages whistleblowing 
in public and private sectors

Public and private sector employees would have protection against retaliation for reporting wrongdoing under a draft “whistleblower” bill.

The draft bill, providing for the criminal prosecution of managers and organizations that retaliate against employees who report wrongdoing, has been released for public comment.

The draft Protected Disclosures Bill, 2014, would apply to both the public and private sectors. It also sets up what is at this stage a loosely defined authority to which whistleblowers could report.

The bill has been released for public comment following an investigation by the Cayman Islands Complaints Commissioner that found numerous examples in which civil servants acknowledged they did not report wrongdoing by supervisors because they believed the reporter, not the offender, would be punished.

In its lengthy review of the issue, the Law Reform Commission also found that while a handful of local laws contain some form of whistleblower protection, the protective umbrella under which reporters of wrongdoing would stand has some gaping holes.

For instance, the civil service personnel regulations were amended in 2009 to allow government workers to report wrongdoing under the Freedom of Information Law. However, guidance as to how a civil servant would report wrongdoing, and to whom they would report, was never established.

Earlier this year, lawmakers passed the Standards in Public Life Law, which provides almost the same wording found in the Freedom of Information Law for the protection of whistleblowers.

“Again, however, there is no guidance on the procedures to be followed for providing information anonymously and no details are provided on how whistleblowers may seek damages or reparations for acts of reprisals,” the Law Reform Commission found.

The Protected Disclosures Bill, 2014, attempts to define what “wrongdoings” may be reported, what retaliatory acts are prohibited, and to whom employees should “blow the whistle.”

Disclosures are protected in cases where “improper conduct” is reported, according to the bill. That conduct includes suspected criminal offenses, failure to carry out legal obligations, suspected human rights violations, conduct that is likely to pose a health or safety threat, and gross mismanagement or misconduct.

Anyone who makes a disclosure with the reasonable belief that their information shows improper conduct would be protected under the bill. Any disclosures made under the protected heading would not be liable to criminal or civil court proceeding.

The bill defines an employee as “anyone who works or has worked for another person.” This broad definition appears to leave private sector entities open to enforcement under the law as well.

Improper conduct should be reported to individuals referred to as “listed persons” under the bill. Those are a person’s employer or that employer’s designate; a minister of government, or one of the following: the attorney general, the auditor general, the anti-corruption commission, the commissioner of police, the commission for standards in public life, the director of public prosecutions, the Cayman Islands Monetary Authority or the complaints commissioner.

In specific circumstances, the bill would also allow the whistleblower to go to a “designated authority” – as yet unformed or defined by the draft legislation. The draft bill would give that authority the same powers as a judge of the Grand Court to subpoena witnesses and require records.

Anyone who takes or threatens to take detrimental action against a whistleblower can be sentenced to between two and five years in prison upon conviction, or face fines, or both.

“An employee who is dismissed as a consequence of seeking to make, making or intending to make a protected disclosure shall be treated as being unfairly dismissed,” the draft bill states.

Someone who is found guilty of taking detrimental action against a reporter of wrongdoing can also be made to pay restitution by a court order.

Other issues related to whistleblowing protections not resolved in the draft bill, but discussed as part of the Law Reform Commission’s review, include whether legal aid should be provided in whistleblower cases and whether reporters of wrongdoing should receive some compensation.

For instance, the commission points out that Canada, which has protective legislation, has been criticized for not providing any meaningful legal assistance to whistleblowers.

The Canadian charity FAIR, the federal accountability initiative for reform, noted in its review of the Canadian protection legislation: “Those accused of retaliation will almost certainly be defended by a team of justice department lawyers with seemingly unlimited resources, all paid for by the taxpayer.

“In the case of Joanna Gualtieri, the foreign affairs real estate specialist who exposed massive waste and extravagance in the provision of accommodations for diplomats abroad and then sued her bosses for harassment, the justice department legal team – which outnumbered Gualtieri’s by eight to one – dragged out her case for nearly 12 years. The justice department’s legal files on this one case totaled more than 50 linear feet of paperwork – taller than a five story building.”

Cayman’s legal aid budget, the subject of controversy in almost every annual budget debate, has grown to $2.5 million, most of which is used for criminal cases. However, legal aid attorneys have often pointed out the inadequacy of that fund, particularly in covering civil court issues or government tribunals.

Commission members also noted that financial incentives for whistleblowers are worthy of consideration under the proposed bill, although such language did not make it into the draft.

“Such incentives may be of great assistance in improving the current situation in the islands, where many employers fail to pay insurance and pensions for employees and employees are understandably afraid to report breaches of the law,” the commission review stated.

Some financial recovery legislation in the United States allows individuals to file claims against contractors they believe have defrauded the government. Whistleblowers who bring securities law violations to the attention of federal regulators can also receive a percentage of the government’s recovery in successful prosecutions of such cases.

However, a U.K. House of Commons review on the subject of paying whistleblowers identified some concerns with the practice, including that whistleblowers might maliciously report against employers for financial gain or that competitors in the financial markets might seek to entrap one another for personal gain.

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