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PROTECTION FOR WHISTLE BLOWERS (SECTION 159 OF THE COMPANIES ACT, AS AMENDED)

We see that any provision of a company’s Memorandum of Incorporation or rules, or an agreement, is void to the extent that it is inconsistent with, or purports to limit, set aside or negate the effect of this section 159.

From a proper reading thereof, it is save to concluded that it applies to any disclosure of information by a person contemplated in subsection (4) if —

(a) it is made in good faith to the Commission, the Companies Tribunal, the Panel, a regulatory authority, an exchange, a legal adviser, a director, prescribed officer, company secretary, auditor, a person performing the function of internal audit, board or committee of the company concerned; and

(b) the person making the disclosure reasonably believed at the time of the disclosure that the information showed or tended to show that a company or external company, or a director or prescribed officer of a company acting in that capacity, had —

(i) contravened this Act, or a law mentioned in Schedule 4;

(ii) failed or was failing to comply with any statutory obligation to which the company was subject;

(iii) engaged in conduct that had endangered, or was likely to endanger, the health or safety of any individual, or had harmed or was likely to harm the environment;

(iv) unfairly discriminated, or condoned unfair discrimination, against any person, as contemplated in section 9 of the Constitution and the Promotion of Equality and Prevention of Unfair Discrimination Act, 2000 (Act No. 4 of 2000); or

(v) contravened any other legislation in a manner that could expose the company to an actual or contingent risk of liability or is inherently prejudicial to the interests of the company.

Subsection reads that a shareholder, director, company secretary, prescribed officer or employee of a company, a registered trade union that represents employees of the company or another representative of the employees of that company, a supplier of goods or services to a company, or an employee of such a supplier, who makes a disclosure contemplated in this section —

(a) has qualified privilege in respect of the disclosure; and

(b) is immune from any civil, criminal or administrative liability for that disclosure.

In terms of subsection 5 we see that a person contemplated in subsection (4) is entitled to compensation from another person for any damages suffered if the first person is entitled to make, or has made, a disclosure contemplated in this section and, because of that possible or actual disclosure, the second person —

(a) engages in conduct with the intent to cause detriment to the first person, and the conduct causes such detriment; or

(b) directly or indirectly makes an express or implied threat, whether conditional or unconditional, to cause any detriment to the first person or to another person, and—

(i) intends the first person to fear that the threat will be carried out; or

(ii) is reckless as to causing the first person to fear that the threat will be carried out,

irrespective of whether the first person actually fears or feared that the threat will or would be carried out.

Any conduct or threat contemplated in subsection (5) is presumed to have occurred as a result of a possible or actual disclosure that a person is entitled to make, or has made, unless the person who engaged in the conduct or made the threat can show satisfactory evidence in support of another reason for engaging in the conduct or making the threat.

A public company or a state-owned company must directly or indirectly—

(a) establish and maintain a system to receive disclosures contemplated in this section confidentially, and act on them; and

(b) routinely publicise the availability of that system to the categories of persons contemplated in subsection (4).

The contents of this article is intended to provide a general overview to the subject matter and is not exhaustive. Specialist advice must be sought about your specific circumstances – 05 March 2019.

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