A protected disclosure is the disclosure of relevant information by a ‘worker’, who has a reasonable belief that a relevant wrongdoing has been, or is being, carried out and came into that knowledge in a work-related context – more commonly known as whistleblowing.
Ireland had strong protections in place for whistleblowers under the Protected Disclosures Act 2014 (‘2014 Act’) and the Act significantly enhances those protections, expands what is considered a relevant wrongdoing and penalisation, and imposes new obligations on many employers to implement processes to facilitate the making of a protected disclosure. The Act is likely to affect most organisations with immediate effect as organisations ought to adapt their whistleblowing policies to incorporate the expanded protections under the Act.
Changes in the 2022 Act
Who is a Worker?
The 2014 Act set out protections for employees, consultants and other persons; the Act has broadened the definition of a worker, i.e., a person who will be protected under the Act. There is no requirement for the person to be engaged with the employer on an ongoing basis, or to be in receipt of remuneration to qualify for protection under the Act and now includes past and present:
- volunteers and unpaid trainees,
- members of the administrative, management or supervisory body of an undertaking including nonexecutive members,
- persons applying to the organisation through a recruitment process, and
- persons who engage in pre-contractual negotiations.
When a person may be deemed to become aware of relevant information or a relevant wrongdoing has also been expanded, to include knowledge gained through a work-related context, as well as through a recruitment process stage or through pre-contractual negotiations.
Relevant Wrongdoing
The Act broadens the definition of a ‘relevant wrongdoing’. A relevant wrongdoing still includes offences and failures to comply with a legal obligation amongst others, but will now also extend to breaches of EU acts including financial services, products and markets (such as insurance and
pension products), the prevention of money laundering, public procurement, product safety and compliance, protection of the environment, protection of privacy and personal data, competition rules, corporate tax rules (Schedule 6 is an annex of the full list of EU acts covered by the Act).
Exclusion of Personal Grievances
The Act excludes interpersonal grievances as a relevant wrongdoing. This exclusion will only apply where the report relates exclusively to the reporting person and another worker, or the employer. Employers should exercise caution when seeking to rely on this exclusion, to ensure that a report relating to a worker does not include breaches of statutory duties such as health and safety that could affect others, as per the decision of the Supreme Court case Baranya v Rosderra Irish Meats Group Limited. However, where an employer is satisfied that the report relates only to the worker, it can refer the matter to be dealt with through its usual grievance procedure.
Penalisation
The Act expands on acts that are to be interpreted as penalisation against a worker for making a protected disclosure. The list of penalisations now includes matters such as:
- ostracism,
- a negative performance assessment or employment reference,
- harm to a worker’s reputation,
- blacklisting and/or the early termination or cancellation of, or failure to renew, a contract for goods or services or of employment.
While previously a worker was entitled to apply to the Circuit Court for interim relief where the worker claimed they were being unfairly dismissed as a result of making a protected disclosure, the Act allows a worker to seek relief from the Circuit Court for any act of penalisation. This may have a substantial impact on employers. The expansion of what penalisation is – such as a negative performance assessment – may present issues to an employer who is engaged with a worker in a performance management review at the time a report comes in from that worker.
Reversal of Burden of Proof
Under the 2014 Act, a worker was obliged to prove that an alleged act of penalisation was ‘wholly or mainly’ as a result of that person making a protected disclosure. Notably, the Act reverses the burden on proof and now, it will be assumed that
penalisation did occur, and the onus is on the employer to show that its actions were based on duly justified grounds. In light of the increased scope of protection and what might be considered penalisation, this change is significant for employers and emphasises the need for an employer to properly document its processes and reasoning for its actions.
Reporting Channels and Dates for Compliance
While public bodies had obligations under the 2014 Act to have reporting policies in place for whistleblowers, there was no such obligation on private sector employers. This has now changed. Employers are required to ‘design…establish…and operate…’ secure internal reporting channels (and secure and independent external reporting channels must be established by prescribed persons and the Office of the Protected Disclosures), that will ensure the confidentiality of the reporting worker and any named people in the report. This function can be outsourced. Under the Act, private sector and public sector employers as set out below, must establish an internal or external reporting channel for whistleblowers, that adheres to the standards and timelines set out in the Act:
- All public bodies – 1st January 2023,
- Private sector employers with over 250 employees – 1st January 2023,
- Private sector employees with between 50-249 employees – 17 December 2023,
All employers, regardless of the size of the organisation, must have established internal reporting channels on the commencement date of the Act if its activities are regulated within the schedule of EU Acts recited within the Act. Organisations affected by this, regardless of the number of employees include:
- financial services,
- products and markets, and
- the prevention of money laundering and terrorist financing.
Designated Person
The Act requires that an employer acknowledge a response within seven days of receiving a report and must appoint a ‘designated person’ to carry out an initial assessment of the protected disclosure to determine if it is covered by the Act.
A designated person must be impartial and can be an internal person or department or an external third party, such as a solicitor or auditor – the key is to ensure that the designated person does not have a conflict of interest. The designated person must be capable of carrying out a diligent follow up, seek further information if required and follow up to the person making a report within three months.
A protected disclosure can be made verbally or in writing and the designated person or receiving person must keep accurate reports. There is helpful clarification in the Act that provides that no employer is obliged to follow up on an anonymous report, however, they may choose to do so. It is an offence not to establish the reporting channels in accordance with the Act, if an affected employer.
Offences and Compensation
The 2022 Act creates new offences for a person who:
- hinders or attempts to hinder a worker in making a report,
- penalises or threatens penalisation or causes or permits any other person to penalise or threaten penalisation,
- brings vexatious proceedings,
- breaches the duty of confidentiality regarding the identity of reporting persons,
- makes a report containing any information that the reporting person knows to be false, or
- fails to establish, maintain and operate internal reporting channels and procedures.
Failure to provide adequate reporting channels and/or committing any of the above-mentioned offences could lead to fines ranging between €75,000 - €250,000 and/or imprisonment of up to two years.
The maximum compensation to be awarded to reporting persons under the Act is 260 weeks’ (five years) remuneration and a new penalty has been created for those workers not in receipt of compensation where the maximum award is €15,000.
Office of the Protected Disclosures Commissioner
The Act establishes the Office of the Protected Disclosures Commissioner in the Ombudsman. It will be independent and autonomous and afforded powers to fulfil its functions, including the ability to require information and documentation, make copies of such relevant documentation and/or apply for an order of compliance to the Circuit Court. It is intended to be a recipient of last resort of a protected disclosure.
Key Takeaways and Actions
The Act is a substantial overhaul of the protections for whistleblowers and employers should take note. We recommend employers take the following actions now:
1. All employers ought to review their whistleblowing policies and procedures to take account of the enhanced protections and expanded definitions under the Act.
2. Where an employer is obliged to implement an internal reporting channel, it should review any processes it has in place, and/or design a process, to ensure it meets the standards and confidentiality provisions in the Act. This function can be outsourced.
3. Determine if anonymous reports will be accepted and if so, under what conditions.
4. Employers required to implement reporting channels ought to consider who will be its appointed designated person for the purpose of assessing the report, following up and maintaining contact with the reporting person and providing feedback as to whether further action is required or if the report will be closed. This role can be outsourced.
5. Employers ought to look at providing training for its employees to assist an employer in identifying a protected disclosure or reports of a penalising act to take into account the updates in the Act. This ought to include assisting the responsible people to assess each report, assess the source of the report if disclosed, the manner in which the person came to have knowledge of the issue and if the report falls within the scope of the Act.
6. In particular, an employer should be mindful and provide training to assist categorising whether a report is a grievance or if it amounts to a protected disclosure.
This article first appeared in November 2022 - Vol 2 issue 4 of The Advantage magazine, one of the many benefits exclusively available to LIA members.