Note: this article, featuring our Legal Director Tom Devine, was originally published here.
Legal Notes: Whistleblowing — Publicity Risks for Companies Versus Legal Risks for Employees
Whistleblowing is generally defined as “the disclosure by organization members (former and current) of the illegal, immoral and illegitimate practices under the control of their employers to persons or organizations that may be able to effect action,” writes Siavash Vatanchi in CanLII.
While those blowing the whistle are often regarded as heroic, Vatanchi says the experience is rarely enjoyable. He cites fears of job loss, stress-induced health problems and strains on family relationships as deterrents.
“All too often the prevailing sentiments among whistleblowers are frustration and regret,” he writes.
However, this should give senior executives little comfort. There are serious legal risks if an employee turns to authorities. Even worse, a major publicity scandal could erupt if an employee’s claims reach the media.
The CBC’s consumer affairs show Go Public exposed how staff at Colliers Project Leaders, a Canadian infrastructure manager with offices across the country, was pressured by company president and CEO Franklin Holtforster into “giving up paid vacation days, then told to lie about it on their timecards — or risk job losses during the height of the pandemic.”
Colliers managers followed up on Holtforster’s request to check compliance.
Colliers told the Daily Commercial News their initiative was, “intended to be a collective, voluntary effort to preserve jobs,” a last resort after several other cost containment measures proved insufficient.
They also said the company, “has several mechanisms in place for employees to confidentially share concerns about activities in the workplace,” adding that employee anonymity and no reprisals are assured. Nevertheless, the CBC report did not identify the employees spoken to.
Labour law specialists quoted in the CBC report said Holtforster’s directive was both unethical and illegal. Yet, the Colliers whistleblowers had good reason to be concerned about their personal legal protections.
Lawyers with the risk management and crisis response practise at Osler Hoskin & Harcourt LLP write that, “Under Section 425.1 of the [Canadian] Criminal Code, it is an offence for employers to threaten to or to take disciplinary action, demote, terminate or otherwise adversely affect employment with the intent to force the employee to refrain from providing information to law enforcement about an offence or to retaliate against an employee who has already provided such information.”
However, they point out that the law does not apply to those who report wrongdoing to media sources or outside agencies or advocacy groups.
Provincially, private sector whistleblower protections are scattered and thin. Yosie Saint-Cyr, a member of the Quebec bar and respected HR law author, writes in Slaw magazine that only Saskatchewan and New Brunswick have whistleblowing legislation covering the private sector under their Labour or Employment Standards Acts.
Clearly Canada has a long way to go in terms of protecting whistleblowers.
In a Pivot magazine article, Micab Toub quotes Tom Devine, legal director of the Government Accountability Project (GAP) in Washington, D.C.
“Currently, Canada’s whistleblower law is the object of consistent international ridicule. It’s regularly held up as an example of free-speech rights that are false advertising in practice.”
Saint-Cyr believes this legislative weakness will be repaired. There is a trend in Canada “to enhance whistleblower protection,” she says. Companies would do well to develop effective policies that directly address whistleblowing, lest they be caught up in legal entanglements or suffer reputational impairment.
That suggestion is echoed by national law firm McCarthy Tetrault.
“Does the organization foster a culture that encourages early reporting of issues, prompt and fair resolution and a non-retaliatory environment? Is it well-reflected in the organization’s operations and communications in the current context?” the firm notes.
For Colliers, the reputational damage was done, and the company was forced to issue a public mea culpa.
“We understand — and sincerely apologize — that some employees felt pressured to participate in this initiative. That is not what was intended,” the company said.
Desperate times sometimes result in desperate measures.
“The COVID-19 pandemic has created an unprecedented global economic crisis,” says McCarthy Tetrault, “and whistleblowing is, as expected, already on the rise.”