The Ministry of Business, Employment and Innovation has been forced to backtrack on a policy which offered staff the opportunity to dob in colleagues to a tip-off line run by UK-based Crimestoppers.
The Public Service Association (PSA) received a "flurry" of emails from disgruntled staff members when the policy was introduced on March 27.
They were concerned that whistleblowers were contacting a company associated with the police.
Crimestoppers is a private company that works with New Zealand Police by passing on details of crimes that have been given to them by someone who wants to remain anonymous.
Workplace Integrity Line, run by Crimestoppers, is for employees to anonymously call to provide details of wrongdoing by fellow staff members.