Companies and regulators alike are increasingly recognizing that
"whistleblowers", i.e., individuals who report
suspected wrongdoing, mismanagement or unethical conduct, are an
important resource for managing risk and responding to conduct that
can harm companies, their stakeholders and the public at large. The
CSA Group (formerly the Canadian Standards Association) established
a diverse working group drawn from the business community,
academics, investigators, lawyers and former whistleblowers to
develop Whistleblowing Systems – A
Guide. This document provides guidance for
organizations of all sizes to design and implement an effective
system to empower individuals to report potential problems and
enable management to respond when concerns are raised.
Whistleblowing Systems – A
Guide is the first such guideline published for the
Canadian context. It provides background about the existing
landscape of whistleblower protection in Canada, as well as
practical advice to help organizations determine what an effective
system might be for its size and context. The Guideline discusses
the benefits of whistleblowing systems, as well as key planning
considerations, critical components, implementation
recommendations, and target outcomes for a successful system.
Interest in whistleblower policies has intensified in recent
years, in particular as regulators and companies debate the
relative merit of encouraging individuals to report internally
within a company rather than taking concerns directly to law
enforcement. While recognizing that there may be circumstances in
which it is necessary to go directly to law enforcement, having an
effective system that enables whistleblowers to report internally
without fear of retaliation or reprisal is an important way
companies can encourage individuals to report potential concerns
internally so that companies have an early opportunity to address
risk or potential misconduct.
In the US, the 2010 Dodd Frank Wall Street Reform and
Consumer Protection Act brought whistleblowing to prominence
in two important ways. First, it introduced monetary incentives or
bounties for individuals who report possible violations of federal
securities law to the US Securities and Exchange Commission (SEC).
Second, it gave the SEC jurisdiction to bring enforcement actions
against companies that retaliate against employees who report
wrongdoing to the agency. The SEC settled its first whistleblower
anti-retaliation case with hedge fund Paradigm Capital in 2014.
In 2015, the Ontario Securities Commission (OSC) became the
first regulator in Canada to announce a whistleblowing program.
Under the proposed OSC Policy 15-601 Whistleblower
Program, a whistleblower could be awarded up to CAD$5
million for voluntarily providing information that meaningfully
assists the OSC in specific proceedings under the Securities
Act or Commodity Futures Act. Subject to the
consultation process that concluded in January 2016, the OSC is
aiming to have the program in place by Spring 2016.
These developments underscore the importance of companies
getting ahead of the curve and designing effective whistleblowing
systems to ensure that individuals with information about risk or
potential misconduct have safe and trustworthy mechanisms to report
Unfortunately, reasonable accommodation for employees in the workplace continues to be the source of significant litigation and even today we continue to see outrageous examples of employers behaving badly.
We are now beginning to see reported cases involving charges and subsequent fines laid against employers for failing to provide information, instruction and supervision to protect a worker from workplace violence.
On October 13, 2016, the Supreme Court of Canada denied leave to appeal an Ontario Court of Appeal decision which ordered an employer to pay a former employee 37 months of salary and benefits following termination.
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