Stratis Insights on The Protected Disclosures (Amendment) Act 2022

The Protected Disclosures (Amendment) Act 2022 has introduced substantial changes to the Protected Disclosures Act 2014 by significantly enhancing the protections for whistle-blowers in Ireland, thereby giving effect to the EU Whistleblowing Directive (Directive (EU) 2019/1397 on the protection of persons who report breaches of Union law). The Act gives further enhanced protections for workers who suffer penalisation as a result of making a protected disclosure by providing for a significant expansion of its personal scope to include protections for volunteers, shareholders, board members and job applicants for the first time; by specifying that private sector organisations with 250 or more employees (reducing to 50 or more employees by 2023) will be required to establish formal channels and procedures for their employees to make protected disclosures; by expanding the definitions of ‘relevant wrongdoings’ and ‘penalisation’; by reversing the burden of proof in penalisation claims; by expanding the provision on interim relief to include forms of penalisation other than dismissal, and providing for criminal penalties for penalisation.

This article examines the key provisions of the new Act and its impact on employers. It is an important and complex piece of employment legislation which will have many implications for employers, particularly in the private sector. The new Act means that in order to comply with the Directive, employers now have additional obligations under the law. It will place significant new responsibilities on employers to create and maintain internal reporting channels that will be subject to inspection by the WRC. The new Act includes strict regulations in relation to the acknowledgement and follow up of protected disclosures made by workers. Employers should be fully aware of the changes that will take place shortly to ensure they are fully compliant with the Act, to avoid expensive claims and potential criminal penalties.

The key provision of the 2022 Act are as follows:-

Expands the scope of the 2014 Act in relation to reporting of breaches of European Union law to include all of the EU laws listed in the Directive, i.e. to make a report of information on relevant wrongdoings.
The 2014 Act already provided for a broad definition of “worker” to include employees, contractors and agency workers. The 2022 Act broadens the protection of the Act to include almost everyone associated with an employer who make a protected disclosure, including shareholders, board of directors, persons belonging to the administrative, management or supervisory body of an undertaking; volunteers, unpaid trainees and job applicants in cases where information on relevant wrongdoings has been acquired during a recruitment process and individuals who acquire information on a relevant wrongdoing during pre-contractual negotiations.
Places an obligation on all private sector organisations with 250 or more employees to establish internal reporting channels and procedures for employees to make protected disclosures, which may be subjected to inspection by the WRC. Private sector employers with 50 or more will need to comply with this requirement from 17th December 2023. Employers and prescribed persons will be required to follow a strict timeline to acknowledge, follow-up and give feedback in respect of all reports received through these channels. All public sector organisations, regardless of size, are already required by the 2014 Act to have policies and processes for protected disclosures in place.
No threshold requirement is set, whether public or private sector, for employers, who are subject to EU law in various prescribed areas, including financial services, products and markets, prevention of money laundering and terrorist financing, public procurement, product safety and compliance, transport safety and protection of the environment, food safety, animal safety and welfare and public health. A full list of applicable legislation under which employers may be subject to this requirement is contained in Schedule II of the Act.
The new Act provides that the Minister may, by order, reduce the threshold of 50 employees for specified classes of employers, subject to a risk assessment and public consultation. The Minister can also make an order setting out how organisations should calculate the threshold of 50 employees.
Employers should be aware that the protections afforded to workers contained in the Act applies irrespective of the size of the organisation and regardless of whether the organisation has a formal reporting channel or not.

Internal Reporting Channels and Procedures

All employers covered by the new legislation must appoint an internal impartial designated person or department designated for that purpose who will receive and handle complaints. Alternatively they may provide an external third party authorised by the employer for this purpose. Employers with less than 250 employees may share resources as regards the receipt of reports and any investigation to be carried out as part of the process of follow-up.
Internal reporting channels must be designed, established and operated in a secure manner that ensures the confidentiality of the reporting person’s identity and any third party mentioned. (“Reporting person” means a worker who has made a protected disclosure in accordance with the provisions of the Act, otherwise known as a ‘whistle-blower’.)
The employer must provide clear and easily accessible information on the procedures applicable to the making of reports.
The procedures shall provide that a designated impartial person be appointed who shall acknowledge reports of wrongdoing, whether in writing or orally or both, within 7 days, provide diligent follow-up of the reports received, provide feedback to the reporting person within a reasonable period and, in any case, within 3 months and communicate the final outcome of any investigations which must include the carrying out of an initial assessment.
The carrying out of an initial assessment, by the designated person, is to decide whether there is a prima facie evidence that a relevant wrongdoing has occurred; if the initial assessment demonstrates that there is no prima facie evidence that a relevant wrongdoing has occurred, the procedure can be closed and notification in writing of the decision and the reasons for it should be given to the reporting person, or if the initial assessment demonstrates that there is prima facie evidence that a relevant wrongdoing may have occurred, then appropriate action must be taken to address the relevant wrongdoing, having regard to the nature and seriousness of the matter concerned.

The Workplace Relations Commission inspectors will have a role to play in monitoring and enforcement and failure to implement these reporting channels will be an offence. The reporting channels will be required to maintain the confidentiality of the reporting person.

Anonymous Reporting

The Act provides that there is no obligation to accept and follow-up on anonymous reports, but an employer may choose to do so. It also clarifies that a worker who makes a disclosure by way of an anonymous report, and who is subsequently identified and penalised for having made a protected disclosure, is entitled to the protections contained in the Act.

Burden of Proof

Under the 2014 Act, the burden of proof in cases of penalisation rested with the person alleging wrongdoing. Under the new Act, the law reverses the burden of proof to employers, meaning that penalisation will be presumed to have occurred because of or in retaliation for having made a protected disclosure, unless the employer can prove that the act or omission complained of was on duly justified grounds, the “but for” test will no longer apply. This is a significant change for employers.

Interpersonal Grievances

The new Act excludes interpersonal grievances i.e. grievances concerning interpersonal conflicts between the reporting person and another worker, or a matter concerning a complaint by a reporting person to or about, their employer which concerns the worker exclusively. The Act states that such grievances “may be dealt with through any agreed procedures applicable to such grievances or complaint to which the reporting person has access or such other procedures, provided in accordance with any rule of law or enactment (other than this Act), to which the reporting person has access.”,

Charleton J in Baranya v Rosderra Irish Meats Group Ltd [2021] IESC 77 raised concerns regarding the interpretation of interpersonal grievances and whether they could come within the scope of a protected disclosure as defined. He held that under the 2014 Act a complaint of a failure to comply with a legal obligation that is personal to an employee may come within the scope of a protected disclosures, he held: “The thrust of the 2014 Act does not conform to what might ordinarily be considered to define a whistle-blower as a public-minded individual deserving of special protection.” However, the new Act is clear that a matter concerning interpersonal grievances exclusively affecting a reporting person is not a relevant wrongdoing for the purposes of the Act. These grievances should be dealt with through the normal internal grievance procedures. However, employers may need to be aware that where a complaint of health and safety is made concerning fellow employees more generally, it may be regarded as a protected disclosure within the meaning of the Act.

The law sets out a tiered disclosure system to ensure that most reports are made to the employer. The only public interest requirements for disclosures in the new Act relates to those made to a relevant Minister and through certain other channels, not to an employer.

Definition of Relevant Information

Under the 2014 Act, a protected disclosure means a disclosure of relevant information made by a worker in the manner specified in the Act. Relevant information was defined as “in the reasonable belief of the worker, it tends to show one or more relevant wrongdoings, and it came to the attention of the worker in connection with the worker’s employment.” This definition has been now been expanded to included “if ….. it came to the attention of the worker in a work related context”

Work-related context is defined as “current or past work activities in the public or private sector through which, irrespective of the nature of those activities, persons acquire information concerning a relevant wrongdoing and within which those persons could suffer penalisation if they reported such information”.

In addition, relevant wrongdoing now covers not only “information tending to show any matter… has been, is being or is likely to be concealed or destroyed” but it also covers “where an attempt has been, is being or is likely to be made to conceal or destroy such information”.

Definition of Penalisation

The definition of penalisation is significantly expanded by the 2022 to cover “any direct or indirect act or omission which occurs in a work-related context, is prompted by the making of a report and causes or may cause unjustified detriment”.

Work-related context is as defined above.

Examples of penalisation have also been extended to include the following acts and omissions:

• withholding of training

• negative performance assessment or employment reference

• failure to convert a temporary employment contract into a permanent one

• failure to renew or early termination of a temporary employment contract

• harm to person’s reputation, particularly in social media, or financial loss

• blacklisting - which may entail that the person will not, in the future, find employment in the sector or industry

• early termination or cancellation of a contract for goods and services

• cancellation of a licence or permit

• psychiatric or medical referrals

This expansion in the definition of penalisation may present difficulties for employers in managing and accessing employees work performance where they have made a protected disclosure.

Interim Relief and Compensation Awards

The interim relief provision has been expanded in the new Act to enable workers to seek interim relief for acts of penalisation other than dismissal. Employees who claim to have suffered penalisation wholly or mainly for having made a protected disclosure may apply to the Circuit Court for interim relief within 21 days immediately following the date of the last instance of penalisation or such longer period as the Court may allow.

The new Act provides that the maximum amount of compensation that the WRC may award to a ‘worker’ who is not in receipt of remuneration from the employer concerned (e.g. a job-applicant or a volunteer) is €15,000, as distinct from a maximum award of 260 weeks’ remuneration for those in receipt of remuneration. The Act also provides that any award of compensation made by the WRC may be reduced by 25% where the investigation of the wrongdoing is not the sole or main motivation for the making of the protected disclosure concerned.

Office of the Protected Disclosures Commissioner

A new Office of the Protected Disclosures Commissioner will be established in the Office of the Ombudsman to support the operation of the new legislation. The Commissioner will be an additional prescribed person under the new regime and will receive and direct protected disclosures to the most appropriate authority when it is unclear which body is responsible.

This will ensure that all protected disclosures will be dealt with appropriately. The Commissioner will have extensive powers and will have the power to require the production of information and/or records, books, documents or other thing that in the opinion of the Commissioner is relevant and where appropriate, to require the attendance of any person for this purpose. The Commissioner will also take on responsibility for transmitting all protected disclosures sent to Government Ministers to the most appropriate authority for assessment and thorough follow up.

A person who withholds, destroys, conceals or refuses to provide any information or record, book document or other thing required by the Commissioner or fails or refuses to comply with any requirement, or who otherwise obstructs or hinders the Commissioner or an authorised officer will commit an offence and be liable to a summary conviction, a fine or imprisonment or both.

Offences and Penalties

The new Act includes a range of new offences and makes it an offence to:

hinder or attempt to hinder a worker in making a report,
penalise or threaten penalisation or cause or permit any other person to penalise or threaten penalisation,
bring vexatious proceedings against any person or legal entity,
breach the duty of confidentiality in section 16 regarding the identity of reporting persons,
make a report containing any information that the reporting person knows to be false, or
fail to establish, maintain and operate internal reporting channels and procedures.

The Act also provides that these offences can attract significant penalties. A person who commits an offence under this section is liable on summary conviction - fines up to €5,000 or to imprisonment for a term not exceeding 12 months, or both. On conviction on indictment – a fine not exceeding €75,000 , €100,00 or €250,000, (depending on the specific offence) or to imprisonment for a term not exceeding 2 years, or both.

Duty of Confidentiality

The 2002 Act provides that the person to whom the protected disclosure is made must not disclose any information that might identify the reporting person beyond those authorised to receive and follow-up on the disclosure. It extends the same protection to the “person concerned”, i.e. the person who is referred to in a protected disclosure as potentially involved in the wrongdoing. It also sets out certain limits to these protections in respect of both the reporting person and the person concerned, e. g. the prevention of serious risk to the security of the State, public health, public safety or the environment, or the prevention of crime or the prosecution of a criminal offence. In addition, the Act provides that in certain circumstances the reporting person must be informed before their identity is disclosed, unless such information would jeopardise the related investigations or judicial proceedings.

Record Keeping Obligations

Employers will be required to make and retain records of any protected disclosures. Detailed requirements outline the required form of such records, which depend on whether the report was made anonymously, whether it was made orally or in writing, whether it was made on a recorded telephone line or another recorded voice messaging system or unrecorded or in a meeting. To be kept in a durable and retrievable form. The Act also requires employers to offer the reporting person the opportunity to check, rectify and agree the record of their report where their report was made via a telephone line or voice messaging system. In the case of reports made via a meeting with staff designated for receiving protected disclosures, the Act also requires the employer to offer the reporting person the opportunity to check, verify and agree the record of their report. Reports must be retained for no longer than is necessary and proportionate to comply with the provisions of the law.

Transitional Measures

The new Act provides for transitional arrangements, whereby the law will in certain circumstances will extend to workers who reported wrongdoing prior to the enactment of the Act. Schedule 7 of the 2022 Act sets out in detail the transitional provisions with reference to disclosures, the application of which will depend on the specific section of the 2014 Act in question, whether the person making the protected disclosure was covered by the definition of a ‘worker’ prior to the changes introduced in the 2002 Act and whether only the disclosure, or both the disclosure and the penalisation, occurred before the Act commenced.

Advice for Employers

While the Act has not yet (as at 22nd August 2022) been given a commencement date, however, now in anticipation of the new enhanced regime, employers, particularly those in the private sector, should (i) prepare or update their whistleblowing policies and (ii) take steps to establish internal reporting channels, including designating staff to receive protected disclosures in a secure and confidential manner. They should also ensure that this person receives adequate training on handling protected disclosures, particularly in relation to the new prescriptive timelines for acknowledging and following up protected disclosures. These members of staff must be impartial and care should be taken to ensure there is no risk of any inference of penalisation. Or employers should consider engaging an external third party to provide the reporting channel.

Employers are advised to take this Act very seriously and to be rigorous in observing the procedures and records requirements in order to minimise the risk of the Act being misused.

If you would like to talk to us about any of the above issues, please get in touch with Brendan McGinty, Managing Partner, Stratis Consulting, at brendan.mcginty@stratis.ie or any one of our Partners.

Article written by Caroline Jenkinson.

Caroline Jenkinson | Strategic Adviser with Stratis Consulting, and Former Deputy Chairman of the Labour Court

Stratis Consulting

‘Strategic Employment Relations’

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