Whistleblowers in Ireland will benefit from a raft of new protections laid out in an EU directive that is among the farthest reaching and most significant ever to be adopted by the bloc, writes Minister Michael McGrath.
The benefits of protecting people of conscience who speak up about wrongdoing are clear — for both society and democracy.
Whistleblowers play a crucial role in preventing corruption in both the public and private sectors, and workers are usually the first to recognise wrongdoing in the workplace.
An Association of Certified Fraud Examiners 2020 Report to the Nations found that 43 percent of fraud was detected through tip-offs. This compared to 15 percent through internal audit and just two percent through law enforcement.
More than half of these tip-offs came from people in a work-based relationship with the organisation they suspected of fraudulent activity.
Members of the accountancy profession can often be the first people to detect wrongdoing through their roles in industry, regulation, or audit.
That is why all members of the profession must be aware of the EU Whistleblowing Directive, one of the farthest-reaching and most significant pieces of legislation ever to be adopted by the bloc.
The Protected Disclosures (Amendment) Bill will transpose the EU Whistleblowing Directive into law, setting out new legal obligations relevant to the profession in addition to the reporting requirements already applying under their professional codes. It will encourage, support, and protect workers in Ireland who speak up about wrongdoing in the workplace, bringing about significant changes to the legal obligations applying in both the public and private sectors.
Protected Disclosures Act 2014
Many of the EU Whistleblowing Directive provisions are already in place in Ireland, thanks to the Protected Disclosures Act. The 2014 Act was an innovative piece of legislation for its time and remains highly regarded as one of the strongest whistleblower protection laws in the world.
A global study of whistleblower protection laws published last year by the International Bar Association and the Government Accountability Project ranked Ireland joint second in the world for the strength of its legislation.
The 2014 Act prohibits any form of retaliation against a worker who makes a protected disclosure. It establishes channels through which a disclosure can be made – to an employer, an independent regulator known as a prescribed person, a Minister (in the case of public sector workers), and, subject to more stringent criteria, through public disclosure.
The Act provides for redress for workers who are penalised for making a protected disclosure with the option to pursue it, either through the Workplace Relations Commission or the Courts. It also protects workers from civil and criminal liability for any disclosure of information necessary to report a wrongdoing.
In most instances, a worker will make a report to their employer, the employer will address the wrongdoing, and the case will be closed. In Ireland, four out of every five workers who report wrongdoing do not suffer retaliation as a consequence of doing so.
Devastating consequences
As the testimony given to the Joint Committee on Finance, Public Expenditure and Reform during pre-legislative scrutiny of the draft Bill last year made so clear, where retaliation does occur, and the protections of the legislation are broken, the consequences for whistleblowers and their families can be devastating.
I am currently bringing The Protected Disclosures (Amendment) Bill that will transpose the EU Whistleblowing Directive before the Houses of the Oireachtas.
This Bill will include provisions to address issues with our existing legislation as were committed to in the Programme for Government and will build upon and strengthen our existing legislative foundation by:
- widening the scope of persons entitled to protection for speaking up, to include volunteers, shareholders, board members and job applicants;
- requiring private-sector employers with more than 50 employees to establish formal channels and procedures for their workers to report concerns about wrongdoing. This will come into effect for companies with 250 or more employees initially and for companies with 50 or more from December 2023. Companies in certain sectors and public bodies are already required to have formal reporting channels in place;
- requiring the recipients of disclosures to follow a specific process and timelines to acknowledge, follow up on, and provide feedback to reporting persons;
- requiring prescribed persons to be more proactive in promoting their role as external recipients of protected disclosures, making their reporting channels more transparent and accessible to workers who wish to report concerns about wrongdoing in the sectors they regulate; and
- establishing an Office of the Protected Disclosures Commissioner within the Office of the Ombudsman to take on the role of directing reports to the most appropriate persons to address the wrongdoing raised and take responsibility for a report if there is no appropriate person to deal with it.
The Bill will clarify the interaction between protected disclosures and interpersonal grievances. For individual cases of bullying, for example, there are very clear employer obligations under employment law.
However, if a culture of bullying or intimidation exists within an organisation, this could represent the basis for a protected disclosure. Far from making the current system weaker, this Bill will make this distinction much clearer for an impacted worker.
Crucially, it will enhance the protections that will apply if a reporting person suffers retaliation for having made a protected disclosure.
In civil proceedings concerning allegations of penalisation, we are reversing the burden of proof so it will fall to the employer, not the worker, to prove that the alleged act of penalisation did not occur because the worker made a protected disclosure.
The provision of interim relief will be expanded to cover dismissal and other acts of penalisation. This is a significant development as it will allow workers who suffer serious detriment to obtain urgent relief where this is necessary.
Criminal penalties will apply to persons who penalise or hinder reporting by whistleblowers or take vexatious proceedings against a reporting person, as well as for breaches of the duty to keep the identity of the reporting person confidential.
Timeline for enactment
Unfortunately, it was not possible to enact the new legislation before the transposition deadline of 17 December 2021. However, the necessary time must be taken to ensure that this critical legislation is right in providing protections for workers who report wrongdoing. I am confident the legislation will be in place in the near future.
Strong legislation is an important component in any ecosystem designed to support and protect whistleblowers. It is also crucial to have the right organisational culture, however — one that encourages workers to speak up without fear of reprisal.
This will do more than any new legislation, policies or procedures to support and protect whistleblowers.
Driving cultural change in organisations is challenging, but it is something I, as Minister for Public Expenditure and Reform, am committed to doing in public sector organisations.
The wide reform programme my department is rolling out will support open, transparent and accountable organisations.
Preparing for the new bill
I would like to encourage all employers impacted by the Protected Disclosures (Amendment) Bill not to wait for the enactment of this new legislation before they respond.
There are some straightforward steps you can take now to prepare. My advice is to review and update your existing reporting channels and procedures, asking the following questions:
- Is there a designated, impartial person (or persons) responsible for their operation?
- What new training do they need?
- Are the channels sufficiently secure?
- Are there published procedures for whistleblowing?
- Are these procedures easily accessible and understood by all workers?
- Do they provide for acknowledgement, follow-up and feedback within the timelines of the new Bill?
- How best can I communicate the new changes to all staff?
My department is available to respond to questions and will be issuing further guidance material in the coming weeks. More information and the text of the Bill can be found online at:
https://www.gov.ie/en/publication/e20b61-protected-disclosures-act-guidance-for-public-bodies/#eu-whistleblowing-directive
Michael McGrath is Minister for Public Expenditure & Reform, a TD for Cork South Central, and a Fellow of Chartered Accountants Ireland.
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