Giving concerned workers freedom to blow the whistle

In 2001, AIB's former group internal auditor Eugene McErlean warned about a major overcharging problem at the bank. Later, when the Central Bank was looking into an issue of overcharging with regard to foreign exchange, it denied ever knowing there was a problem. McErlean was never a whistleblower per se, but he was labelled one. The experience was such that he would not recommend whistleblowing, even with the new legislation. 

Olivia Greene, a former home loans supervisor with Irish Nationwide Building Society, was a whistleblower. She spilled the beans on the bank's flagrant disregard for its own financial constraints. She revealed a series of fast-tracked loans by Michael Fingleton to politicians, including former minister for finance Charlie McCreevy. She also lost her job as a result of whistleblowing.
 
If Greene was to lose her job as a result of whisteblowing today, it could cost her employer five years' wages.

On Tuesday, the Protected Disclosures Act 2014 – Ireland’s first overarching statute aimed at providing protection for whistleblowers – was enacted by the Government.

The purpose of the whistleblower legislation is to encourage employees to raise genuine and reasonably-held concerns about matters of public interest, free of any threat of sanction.

The legislation covers all employees, contractors, agency workers, members of An Garda Síochána and the Defence Forces. It also includes scope for protection of a disclosure made before the legislation came into effect.

‘Stepped disclosure’

The new law draws on best practice guidelines and takes a more comprehensive approach similar to that adopted in the UK, New Zealand and South Africa.

Key provisions include a prohibition on penalising workers who make protected disclosures and a wide definition of worker to include agency workers and work experience students.

The law has a “stepped disclosure system” which encourages workers to report to employers in the first instance, and provides for a broad range of “relevant wrongdoings” which can be reported, including criminal offences, breaches of legal obligations, threats to health and safety or the environment, miscarriages of justice and improper use of public funds.

Under the Act, employers will now be legally barred from victimising or sacking staff for making protected disclosures. Whistleblowers who are unfairly dismissed for making a protected disclosure will be able to seek a court order preventing the employer taking them off the payroll while a case is being heard.

Furthermore, any dismissal arising from the making of a protected disclosure is automatically deemed unfair, and the qualifying service period for the Unfair Dismissals Act is not applicable.

The whistleblower legislation provides for compensation of up to five years’ pay for dismissals arising from a protected disclosure, which is more than double the existing threshold in unfair dismissals cases.

This is perhaps one of the most striking features of the new legislation, and sends a clear message to employers that sacking people for whistleblowing will not be tolerated.

It is also important for employers to note that the motivation of the whistleblower will be irrelevant when a disclosure is made. The whistleblower needs only to demonstrate “reasonable belief” that they discovered a wrongdoing, to seek protection under the Act.

Linda Hynes, an employment law associate at Leman Solicitors, says the “reasonable belief” clause is completely subjective and means that even where an employee is incorrect and no wrong-doing took place, they will still receive the protection of the legislation.

“It will ultimately fall to the employment tribunals hearing these cases to decide if the belief an employee held was reasonable taking into account all of the circumstances,” she adds.

The legislation does, however, also contain some elements that employers will welcome. It provides a stepped disclosure system meaning whistleblowers must first make an internal disclosure to their employer before telling external bodies such as regulators or the media.

This is of benefit to employers as it allows them to keep control over the investigation of allegations and the outcome of that investigation.

Personal gain

Hynes says the stepped disclosure system provides some safety net for the employer in that in most cases the employee should disclose the alleged wrongdoing internally first.

If an employee wants to disclose information to a third party such as the press there is a strict test to be passed. If the employee does not pass the test, then their disclosure to the press will not be protected.

“The test includes that the employee must believe the issue to be substantially true, the disclosure is not made for personal gain, there is a risk evidence will be concealed or destroyed or the matter is exceptionally serious,” she says.

“There are no hard and fast rules as to how long an employee must wait if they pass all of the criteria. If the issue is exceptionally serious, such as the risk of harm to human life, the waiting period would be very short once the test above is passed.”

Hynes says employees can also make disclosures to their solicitor, barrister or trade union if they are taking legal advice on the disclosure. This is particularly useful if the employee needs advice on whether they are protected by the legislation before making the disclosure.

Unions say employees should talk to their union representative before making a disclosure to ensure that they proceed correctly and gain the protection of the new law.

Advising employees to talk to the union first, Impact says workers must meet proper criteria to ensure that their revelations are protected disclosures under the law.

The union adds that the ability to prevent bad employers from sacking staff in genuine cases of whistleblowing is a particularly important development for workers and everyone who genuinely wants to tackle illegal practices in the workplace.

TI Ireland, which has campaigned for the introduction of a blanket piece of legislation since 2007 and has operated Ireland’s only freephone helpline for whistleblowers since 2011, says the law offers a safety net to workers in all sectors of the Irish economy for the first time.

TI Ireland legal counsellor Susheela Math says it is in the interests of all employers to take steps to comply with the new law, to minimise the risks of adverse litigation and loss of reputation – “and to make use of the opportunity to address any problems within their organisations at an early stage”.

*This article was ameded on July 23rd 2014 to amend an error.