Strengthened Law on Protected Disclosures on the way

by Elizabeth Ryan, partner in the Employment Law & Benefits Team at Mason Hayes & Curran

The General Scheme of the Protected Disclosure (Amendment) Bill (General Scheme), published 12 May 2021, outlines the proposed contents of the Protected Disclosure (Amendment) Bill (Bill). The Bill will give effect to the EU Whistleblowing Directive. This directive has a 17 December 2021 deadline for transposition into Irish law. The Bill amends and updates the Protected Disclosure Act 2014 (2014 Act) to further enhance and strengthen safeguards for whistleblowers

Some of the key provisions and implications for businesses are outlined below:

Who can make a protected disclosure – broadening of the categories of whistleblower?

The General Scheme extends the definition of “worker” to include:

• shareholders
• members of the administrative, management or supervisory body of an undertaking including non-executive members,
• volunteers or unpaid trainees, and
• job applicants

What amounts to “penalisation” – expanded list of prohibited behaviours?

The 2014 Act broadly defines “penalisation” as “any act or omission that affects a worker to the worker’s detriment” and lists examples including suspension, lay-off or dismissal, or unfair treatment. The General Scheme proposes to add further examples to this list, including a negative performance assessment and failure to convert a temporary employment contract into a permanent one.

Protection from retaliation – extension of interim injunctive relief to penalisation claims

The General Scheme proposes that complainant workers will be permitted to seek an injunction from the Circuit Court in respect of all forms of penalisation. This is a significant development, as at present, this type of interim relief, is available only where it is alleged that a dismissal occurred as a consequence of a worker having made a protected disclosure.

Unpaid whistleblowers who are penalised – €13k cap on compensation

Presently, any workers who have been penalised for whistleblowing receive compensation calculated by reference to their remuneration. Where workers do not receive remuneration, such as job applicants and volunteers, but are penalised for whistleblowing, the General Scheme envisages that such workers may be awarded up to €13,000 by the Workplace Relations Commission (WRC).

Confidentiality – the protection of identity afforded to the whistleblower is extended to “person concerned”

The General Scheme provides for a new obligation on those who receive and deal with protected disclosures to protect the identity of what is known as a “person concerned”. This is any individual referred to in a protected disclosure as someone who is involved in, or associated with, the wrongdoing report. This is a very significant change. It mirrors the existing obligation to keep the identity of the whistleblower confidential.

It is not uncommon for businesses managing and investigating whistleblowing reports to struggle to comply with the existing confidentiality obligation in respect of the whistleblower. Undoubtedly, the Bill will pose an even greater challenge for businesses if they now must maintain confidential the identity of the “person concerned” as well.

Anonymous disclosures – are businesses required to follow up on these?

The General Scheme outlines that there is no obligation on businesses to accept and follow up on a protected disclosure made anonymously. Importantly, the General Scheme provides that workers who report anonymously qualify for the protections as outlined in the General Scheme, if their identity is subsequently revealed and they suffer penalisation.  However, whilst there may be no legal obligation to investigate an anonymous disclosure, this does not mean that there are no adverse consequences for businesses who choose not to do so. If a business chooses not to investigate, it may face reputational harm if the matter becomes public, and as such, businesses should carefully assess whether to investigate anonymous disclosures.

Procedures for managing protected disclosures – a more prescriptive process

The General Scheme requires businesses to have more advanced processes for managing whistleblowing complaints with certain mandatory strict requirements prescribed. This will include an obligation for all organisations with 50 or more employees to

• acknowledge receipt of a whistleblowing report within 7 days
• follow up diligently on the report, and
• provide feedback to the whistleblower within a “reasonable timeframe” not exceeding 3 months from the date of acknowledgement of receipt.

The effective date of these provisions will be deferred until December 2023 for businesses with fewer than 250 employees. However, businesses with 250 or more employees (and public bodies) will be subject to the requirements of the Bill as soon as it is enacted. Therefore, it would be well advised to start updating internal reporting channels.

Certain EU laws already impose obligations on companies to have internal reporting systems in place and so the thresholds outlined above will not apply to companies subject to EU laws in the following areas:

• financial services
• prevention of money laundering and terrorist financing
•  transport safety, and
• protection of the environment.

Reversal of the burden of proof

The Minister for Public Expenditure & Reform, in his press release about the General Scheme revealed that where a worker takes a case to the WRC or the courts concerning penalisation for having made a protected disclosure, the burden of proof will be reversed. The current standard of proof under many employment statutes rests on a worker to first show that they have a prima facie case. This means the worker has to prove that there is good reason to take the case before the burden shifts to the employer to defend itself.  According to the Minister’s press release, however, there will now be a presumption that the alleged act of penalisation occurred because the worker made a protected disclosure unless the employer can prove otherwise. This would mark a considerable development in this area of law but we will have to wait and see what form this reversal will take in the detail of the legislation as it is not currently referenced in the General Scheme itself.

Conclusion

The General Scheme provides for some significant changes that will alter the landscape of protected disclosures and enhance the protection of whistleblowers once the Bill is enacted. The main focus of the legislation is to protect “workers”.  The General Scheme extends the definition of a “worker” to include shareholders; volunteers or unpaid trainees; members of the administrative, management or supervisory body of an undertaking, e.g. board members; and those who acquire information during a recruitment or other pre-contractual process, e.g. job applicants. Therefore, a wider scope of workers will be protected.

While in practice most businesses already have whistleblowing procedures in place, the new requirements are considerably more prescriptive and burdensome than the existing market standard. With wider definitions, a proposed reversal of the burden of proof, and a to-be-confirmed penalty regime, our main takeaway is that businesses should analyse the impact of the Bill once published on their organisations now and commence planning to implement the changes provided for in the Bill.

The content of this article is provided for information purposes only and does not constitute legal or other advice.

About the author
Elizabeth, (“Liz”) is a partner in the Employment Law & Benefits Team. Liz has considerable experience in acting for clients in contentious employment litigation before specialist employment fora and the Civil Courts.
Liz also provides non-contentious employment law advice to clients, ranging from the application of employment statute in the workplace, to assisting clients in drafting employment contracts and policies.
She has advised on several high profile company reorganisations involving the application of the transfer of undertakings regulations and collective redundancy programmes.
Liz has extensive experience in the designing and provision of employment law training courses and workshops for clients. She is a lecturer and tutor for the Law Society of Ireland and is asked regularly to speak at conferences on employment law and related topics.
Liz also advises us on all aspects of health and safety law, including that which applies to bullying and stress in the workplace.