The State of Whistleblowing in Canada

Whistleblowing occurs when employees reveal corporate wrongdoing, usually in their organization, to law enforcement. Unfortunately, it is common for whistleblowers to experience demotion, dismissal and otherwise negative treatment from their employers after they disclose the malfeasance or corruption. In order to deal with this serious issue, some companies have created codes of ethics to ensure that their directors, officers and employees are aware of and adhere to standards of conduct that ensure the company performs and is represented in an honest and responsible manner.

However, it is necessary for laws to exist to protect employees who feel, in good faith, it is necessary to disclose wrongdoing. In addition to provisions in the Criminal Code that aim to protect employees who make disclosures, some jurisdictions have enacted specific whistleblower laws to provide these protections in the public and private sectors. As well, workers already receive some form of protection under the local Occupational Health and Safety Act, which protects them where they seek enforcement or give evidence in respect of the enforcement of that Act.

So what is the state of the law on whistleblowing?

Federal law has affected all jurisdictions in the public and private sectors since September 15, 2004, with section 425.1 of the Criminal Code, which makes it a criminal offence for employers, anyone acting on behalf of an employer, or a person in a position of authority over an employee, to take disciplinary action, demote, terminate, otherwise adversely affect the employee’s employment, or threaten any of these things, in order to force the employee to refrain from providing information to law enforcement officials about the commission of an offence by his or her employer or by an officer, employee or director of the employer.

Section 425.1 also makes it an offence to threaten or retaliate against an employee who has already provided information. However, employees are only protected if they approach a person whose duties include law enforcement. They are not given protection if they contact a media source or an outside agency or advocacy group.

The offence carries a maximum term of imprisonment of five years. Moreover, the amount of the fine is unlimited for corporations when the Crown proceeds by indictment.

The Public Servants Disclosure Protection Act has protected whistleblowers in the federal public sector since April 15, 2007. The goal of the Act is to require employers in the public sector to establish a code of conduct that provides civil protections for whistleblowers including disciplinary actions against a public servant who takes a reprisal against a whistleblower, and reinstatement or damages in lieu of reinstatement for whistleblowers who have been subject to reprisal. The Act states simply, “no person shall take any reprisal against a public servant.”

Each chief executive must establish internal procedures to manage disclosures made under the Act by public servants employed in the portion of the public sector for which the chief executive is responsible. These executives must protect the identity of persons involved in the disclosure process, such as the persons making the disclosures, witnesses and persons alleged to be responsible, and establish procedures to ensure the confidentiality of information collected in relation to disclosures of wrongdoings.

Alberta’s whistleblower protection law came into force June 1, 2013, with the enactment of The Public Interest Disclosure (Whistleblower Protection) Act (section 1 and Part 6 of the Public Interest Disclosure (Whistleblower Protection) Act came into force on April 24, 2013). The goal of the legislation is to protect public sector employees from job reprisal, such as termination, if they report wrongdoing. The new law applies to the Alberta public service, provincial agencies, boards and commissions, as well as academic institutions, school boards and health organizations.

The law also creates processes for the disclosure of wrongdoing and for the Office of the Public Interest Disclosure Commissioner to investigate and resolve complaints by public sector employees who report violations of provincial or federal law, acts or omissions that create a danger to the public or environment, and gross mismanagement of public funds.

The penalty for offences under the Act is $25,000 for the first conviction to a maximum of up to $100,000 for subsequent offences.

Since April 2, 2007, Manitoba’s Public Interest Disclosure (Whistleblower Protection) Act has offered a mechanism for the disclosure of wrongdoings in public service and includes provisions to protect whistleblowers. The Act covers the public service of Manitoba, including departments, government bodies and specified offices.

Employees who reasonably believe that they have information that could show that a wrongdoing has been committed or is about to be committed can make a disclosure to their supervisor or designated officer or to the Ombudsman. A disclosure must be in writing and contain certain information required by the Act.

An employee can make a public disclosure without following the above procedures if the employee reasonably believes that a matter constitutes an imminent risk of a substantial and specific danger to the life, health or safety of persons or to the environment, and that there is insufficient time to make a disclosure in accordance with the requirements of the Act. However, the employee must first make the disclosure to an appropriate law enforcement agency or, in the case of a health-related matter, to the chief medical officer of health. Immediately thereafter, the employee must make the disclosure to the supervisor or designated officer. Finally, the provisions that allow an employee to make a public disclosure are subject to any direction that the appropriate law enforcement agency or chief medical officer (as applicable) considers necessary in the public interest, if any.

A person is prohibited from taking a reprisal against an employee, or directing that one be taken, because the employee has, in good faith, sought advice about making a disclosure in accordance with the Act, made a protected disclosure or cooperated in an investigation under the Act.

Individuals other than employees of the public service are allowed to make a disclosure to the Ombudsman if they reasonably believe that they have information that could show that a wrongdoing has been or is about to be committed in the public service—provided that the information is in writing and contains certain details required by the Act (e.g., a description of the wrongdoing). If, as a result of the information, the Ombudsman has reason to believe that a wrongdoing has been or is about to be committed, it can investigate the wrongdoing.

Furthermore, private-sector employers cannot take any of the prohibited measures listed in the Act against an employee for the sole reason that the employee has, in good faith, provided information to the Ombudsman about an alleged wrongdoing. Employers are also prohibited from taking such measures for the sole reason that they believe that an employee will provide information. The following are considered prohibited measures: any disciplinary measure, a demotion, termination of employment, any measure that adversely affects the employment or working conditions of an employee, or a threat to take any of these measures.

Saskatchewan’s Public Interest Disclosure Act came into effect on September 1, 2011. The Act creates a mechanism for the disclosure of wrongdoings in the public service and includes provisions to protect whistleblowers from reprisals. A person is prohibited from taking a reprisal against an employee, or directing that one be taken, because the employee has, in good faith, sought advice about making a disclosure in accordance with the Act, made a protected disclosure, or cooperated in an investigation, or declined to participate in any wrongdoing.

Saskatchewan public servants who want to blow the whistle on wrongdoing in their workplaces may take their concerns to an independent officer of the legislature.

There are some serious penalties for the above offences. Every person who contravenes these rules is guilty of an offence and liable on summary conviction to a fine of not more than $10,000.

New Brunswick’s Public Interest Disclosure Act similarly encourages employees in the provincial public service (departments, agencies, school districts, regional health authorities and Crown corporations) to come forward if they believe that wrongdoing has occurred or is about to occur in the workplace. Since July 1, 2008, the Act has protected employees in the public sector against reprisal and provided a fair and objective process for those accused of wrongdoing.

If employees feel that wrongdoing could be taking place, they should feel confident that the Act will protect them when they come forward. Employees can make a disclosure to their supervisor, the designated officer in their organization or to the Conflict of Interest Ombudsman.

No person may take a reprisal action against an employee, or direct that one be taken against an employee, because the employee has, in good faith, a) sought advice about making a disclosure from a supervisor, designated officer, chief executive or the Ombudsman, b) made a disclosure or c) cooperated in an investigation under the Act.

In Ontario, the Public Service of Ontario Act, 2006 provides similar protection to whistleblowers in Ontario’s public sector. The whistleblowing protections of the Act are contained in part VI (sections 108 to 150) and are similar in scope and application to the federal Public Servants Disclosure Protection Act.

The Public Service of Ontario Act prohibits employers from reprising against a public servant who has made a protected disclosure or has, in good faith, cooperated in an investigation into a disclosure or an investigation commenced under the Act.

The other Canadian jurisdictions do not have whistleblower legislation, but some are in the process of enacting such laws.

Private sector

The only Canadian jurisdictions that have whistleblowing legislation for the private sector are Saskatchewan and New Brunswick, under section 74 of the Labour Standards Act and section 28 of the Employment Standards Act, respectively.

These sections state that employers are not permitted to discharge, threaten to discharge or in any manner discriminate against an employee because the employee has reported or proposed to report to a lawful authority any activity that is or is likely to result in an offence pursuant to an Act or an Act of the Parliament of Canada, or has testified or may be called on to testify in an investigation or proceeding pursuant to an Act or an Act of the Parliament of Canada.

Further, the Supreme Court of Canada has made a decision regarding Saskatchewan’s whistleblowing provision in Merk v. International Association of Bridge, Structural, Ornamental and Reinforcing Iron Workers, Local 77, 2005 SCC 70 (CANLII).

The Supreme Court ruled in favour of a broad interpretation of the whistleblower protection provision contained in Saskatchewan’s Labour Standards Act, holding that employees internally reporting wrongdoing to persons “up the ladder” within the organization enjoyed the same protection as employees reporting wrongdoing to public authorities pursuant to s. 74 of that Act.

Employers should know that whistleblowing protection extends to employees who first bring a problem to the attention of persons inside the employer organization who have the authority to deal with the problem. This can be any person who is directly or indirectly responsible for supervising the employee.

If the problem is not resolved internally, then employees can go to the police or other enforcement agency, but it is not necessary to do so to obtain whistleblowing protection. There may be circumstances where an employee is fully justified in not seeking an internal remedy but in going directly to the police, as in instances where the employee fears the employer may destroy evidence. The employee has the option to report wrongdoing within the employer organization or to an outside authority, and the option the employee chooses will depend on the circumstances.

This principle was subsequently incorporated in section 74 of the Saskatchewan’s Labour Standards Act.

Conclusion

While the protections for whistleblowers in the public sector are much broader than those in the private sector, such protections do not give public sector employees the freedom to criticize, or express malicious comments against, their employers, without justification. Employees owe a duty of loyalty and fidelity to their employers, and this has been well-defined by law.

To ensure those duties are respected, the above whistleblowing legislation places limits on the scope and application of whistleblowing protections, for example, the definition of wrongdoing (what can be disclosed) and to whom it can be disclosed, i.e., a lawful authority or a supervisor or executive of the company. This ensures that employees cannot abuse such legislation, for example by relying upon it as a justification for unduly criticizing or attacking the employer.

Thus, whistleblowing is the exception to employees’ duty of loyalty, and the goal of whistleblowing legislation is and should be to protect good faith whistleblowers and uphold the quality of governance in the country.

Given that the current trend in Canada is to enhance whistleblower protection, and that very complex situations can arise in the workplace, employers may benefit from developing and implementing adequate internal reporting systems to ensure employees are encouraged to report unlawful behaviour internally, that they have proper channels to do so and that this behaviour is treated in an appropriate manner by persons with the requisite authority.