Ireland: Whistleblowing law amendments
Directive 2019/1937 ('the EU Whistleblowing Directive') creates significant new obligations for EU Member States to implement in the area of whistleblowing and, in Ireland's case, recent legislative proposals have gone beyond the mandatory requirements set by the EU Whistleblowing Directive. Ciara O'Kennedy, Partner at LK Shields Solicitors LLP, discusses these proposed changes to areas such as key definitions and reporting channels.
In May 2021 the Irish Government published a general scheme for a proposed Protected Disclosures (Amendment) Bill 2021 ('the Bill'). A general scheme is a broad policy outline of proposed legislation and detailed legislative proposals are expected to follow over the coming months. The purpose of the Bill is to transpose the EU Whistleblowing Directive into Irish law, which is due to be completed by 17 December 2021. Only ten EU Member States, including Ireland, already have comprehensive legal protections for whistleblowers in place. The principal legislation in Ireland is the Protected Disclosures Act 2014 ('the Disclosures Act'), which was noted, on its introduction in 2014, to be wide-ranging in its strength and scope. Notwithstanding, it appears that the Irish Government's plan is to amend the Disclosures Act not only to give effect to the EU Whistleblowing Directive but to also broaden the provisions of the protected disclosures regime well beyond any obligation it imposes.
Key provisions of the Bill – Proposed changes
The Bill gives an outline of the expected changes to be introduced to the Act and below includes an outline of some of the key additional requirements/obligations which, Irish employers should be aware of when the Bill eventually becomes law later this year.
Updated definition of 'relevant wrongdoing' and 'penalisation'
The Bill proposes to extend the definition of 'relevant wrongdoing' under the Disclosures Act, to protect people who disclose breaches of a range of EU laws that are prescribed in the EU Whistleblowing Directive, including breaches of certain EU laws concerning public procurement, financial services and prevention of money laundering and terrorist financing, public health, and consumer protection.
The Bill helpfully excludes from the definition of 'relevant wrongdoing' any matters concerning interpersonal grievances. A person who raises personal grievances will not have special protection and should instead raise grievances through normal internal channels and procedures.
The definition of 'penalisation' is also expanded to include acts such as withholding of training, a negative performance assessment or employment reference, harm, including to the person's reputation, particularly in social media, or financial loss including loss of business and loss of income. The broadening of this definition is likely to result in an increase in claims, or threats of claims, for penalisation against employers.
Definition of 'worker' extended
As the main purpose of the Disclosures Act is to protect 'workers', the Bill extends the definition of 'worker' to include: a shareholder, a member of the administrative, management, or supervisory body of an undertaking, a volunteer or an unpaid trainee, and job applicants, which is a significant extension of the Disclosure Act's current scope.
Penalisation & expanding the scope for interim relief
The Bill provides for the amendment of the definitions of 'employee' and 'employer' to enable board members, volunteers, unpaid trainees, and job applicants to have access to the Workplace Relations Commission ('the WRC') and the Labour Court for claims for redress for penalisation for having made a protected disclosure.
In addition the Bill proposes to increase the range of remedies available to those who allege that they have been penalised for making a protected disclosure to include the possibility of 'non-employees' being eligible to be awarded compensation of up to €13,000, if they can establish that they have been penalised as a result of their having made a protected disclosure.
In addition, it is noteworthy that interim relief (in the form of a circuit court injunction) can now also be sought by complainants in respect of all forms of penalisation and not just limited to those who allege they have been dismissed for having made a protected disclosure, as is currently the case under the Disclosures Act, which may also be a cause of concern for Irish employers.
Information and advice on making a protected disclosure to be made available to public
The Bill provides that the Minister shall provide for comprehensive and independent information and advice on making a protected disclosure and the rights and protections available under the Disclosures Act to be made available to the public in a manner that is easily accessible and free of charge. It is not yet clear how the Minister intends to achieve this.
Minimum requirement to establish reporting channels and procedures
The Bill provides for an obligation on all employers with 50 or more employees to establish and maintain internal channels and procedures for the making of protected disclosures by their employees and for follow up. This will be a change for employers in the private sector who were not legally obliged to do so previously. The existing obligation under the Disclosures Act that all public bodies, regardless of size, must have internal procedures for protected disclosures is retained.
The Bill provides that the obligation to have internal procedures will not come into effect for employers, other than public bodies, with between 50 and 249 employees until 17 December 2023 but will apply to those with over 250 employees from December 2021.
Interestingly, the Bill also provides that in certain circumstances, where the activities of certain entities may pose a certain level of risk to the environment and to public health, the Minister may, by order, provide that the threshold of 50 employees shall not apply. This order can only be made following carrying out an appropriate risk assessment on the particular industry and it not yet clear how this would be carried out/implemented in practice.
It is also noteworthy that the threshold of 50 employees will not apply to public bodies or to companies subject to EU laws in the areas of financial services, prevention of money laundering and terrorist financing, transport safety, and protection of the environment. Existing EU laws already impose obligations on these companies to have internal reporting systems in place.
Procedural obligations of employers
The Bill details some of the requirements for the internal channels and procedures for the making of protected disclosures and obliges employers, inter alia, to acknowledge receipt of any protected disclosures received within seven days – this is a particularly onerous requirement on employers. A diligent follow up should made by an impartial designated person or persons to the person who made the protected disclosure. Currently, the Disclosures Act is silent as to the level of feedback that is required to be given to a reporting person, however the Bill provides a requirement for feedback to be provided, including any actions proposed to be taken, to be provided within a reasonable timeframe not exceeding three months from the acknowledgment of the disclosure.
The Bill also introduces changes to the external reporting channels similar to those outlined above but helpfully provides that the requirement to diligently follow-up on the protected disclosure can be avoided where, having assessed the matter, the prescribed person decides that the reported disclosure is minor in nature.
Interestingly the Bill proposes that employers in receipt of anonymous disclosures will no longer be required to take any action, a proposal that will no doubt be welcomed by employers. It further provides, however, that persons who make reports anonymously, and who subsequently suffer penalisation after their identity is revealed, are protected under the Act.
Duty of confidentiality
The Bill provides that a reporting person is to be informed before their identity is disclosed unless that would jeopardise the related investigations or judicial proceedings. This is the current position under the Disclosures Act, however the Bill goes onto provide that the protections that apply in respect of Section 16 of the Disclosures Act (protection of identity of maker of protected disclosure) shall also apply to persons concerned (i.e. natural or legal persons who are referred to in a protected disclosure as a person to whom the relevant wrongdoing is attributed or with whom that person is associated).
Organisations dealing with whistleblowing reports may find that they already struggle to uphold their duty of confidentiality to whistleblowers. The Bill is undoubtedly more onerous in its scope of this duty and will certainly create a greater burden on organisations who must ensure that the identity of 'persons concerned' is also kept confidential. Internally, this will likely require greater training for those who process protected disclosures within the workforce to maintain the confidentiality standards required.
New Protected Disclosures Office in the Office of the Ombudsman
The Bill provides for the establishment of a Protected Disclosures Office in the Office of the Ombudsman ('the Office') and sets out the functions of this office. The Office is to act as a prescribed person of last resort to address situations where there are gaps in the provision of a prescribed person to report to under the Disclosures Act or where assistance is required in referring a disclosure to an appropriate prescribed person.
The Office may receive disclosures made to Ministers and shall conduct an initial assessment of disclosures and make a recommendation as to the authority to whom the disclosure should be referred for further action.
Transposing the EU Whistleblowing Directive and implementing the Bill, as proposed, will result in significant changes to this area of the law. It is clear that the proposals will further strengthen the already significant protections enjoyed by whistleblowers in Ireland but in doing so will result in more onerous obligations being placed on employers in dealing with whistleblowers. Employers will need to review existing procedures and prepare to establish internal channels and procedures for the making of protected disclosures once the final legislation is enacted.
Ciara O'Kennedy Partner
LK Shields Solicitors LLP, Dublin