Ireland’s ‘General Scheme of the Protected Disclosures (Amendment) Bill 2021’: Laying the foundation for transposition of the EU Whistleblowers Directive
Introduction
The Protected Disclosures Act 2014 (‘2014 Act’) is Ireland’s first pan-sectoral whistleblowing legislation. It was enacted on 15 July 2014 and was designed to remedy the deficiencies of the preceding sectoral approach to whistleblower protection, which had entailed the inclusion of different whistleblowing provisions in different pieces of legislation. This sectoral approach to whistleblower protection was deemed to be ineffective as it was leaving thousands of people with little or no guidance or protection against legal action and retaliation for speaking out against wrongdoing.[1] The 2014 Act was modelled primarily on the UK and New Zealand whistleblowing legislation.[2] At an early stage, it was considered that the enactment of the 2014 Act had ‘led to a significant change in the perceived environment for whistleblowing.’[3] Further, in a study carried out by Blueprint for Free Speech in 2018, which measured the whistleblower laws and policies for all EU countries against nine key European and international standards, Ireland scored the highest mark, achieving a score of 67.7%.[4] Also, the positive light in which the 2014 Act was being viewed is reflected in Transparency International’s ‘A Best Practice Guide for Whistleblowing Legislation’, which referred specifically to the 2014 Act on numerous occasions as being a good practice example of whistleblowing legislation.[5] In April 2018, the European Commission in a communication to the European Parliament, the European Council, and the European Economic and Social Committee, on strengthening whistleblower protection at EU level, listed Ireland as being one of ten Member States that has comprehensive whistleblowing legislation in place.[6]
General Scheme of the Protected Disclosures (Amendment) Bill 2021
Despite being lauded in the international sphere, the 2014 Act is currently under review and will require some necessary amendments in order to transpose, by 17 December 2021, Directive (EU) 2019/1937 of the European Parliament and the Council of 23 October 2019 on the protection of persons who report breaches of Union law (‘Directive’). A public consultation was carried out by the Department of Public Expenditure and Reform between June and July 2020 and the submissions to this consultation have helped inform the approach to transposition of the Directive.[7] On foot of this, the General Scheme of the Protected Disclosures (Amendment) Bill 2021 (‘Heads of Bill’) was published on 12 May 2021.[8]
The Heads of Bill consist of twenty-six Heads, divided into six parts: Part I- Preliminary and General; Part II- Application of the Bill; Part III- Reporting channels; Part IV- Protected Disclosures Office; Part V- Protections; and Part VI- Miscellaneous and Supplementary. Some of the key Heads of Bill are discussed below.
Head 7: Personal Scope
Head 7 expands the already broad definition of ‘worker’ under s 3 of the 2014 Act to include the additional reporting persons in art 4 of the Directive, namely, shareholders; members of the administrative, management or supervisory body of an undertaking, including non-executive members; volunteers or an unpaid trainee; and those who acquire information on a relevant wrongdoing during a recruitment process or other pre-contractual process.
Head 9: Internal reporting channels
Head 9 amends s 6 (Disclosure to employer or other responsible person) and repeals s 21 (Internal procedures for protected disclosures made by workers employed by public bodies) of the 2014 Act. This Head requires all employers with 50 or more employees to establish and maintain internal channels and procedures for both the making and follow-up[9] of protected disclosures. Employers can extend the application of the channels and procedures to disclosures made by workers other than employees. Employers who have between 50-249 employees do not have to comply with this obligation until 21 December 2023. This obligation will apply irrespective of the number of employees to organisations in the public sector[10] and to organisations in the area of financial services, products and markets; prevention of money laundering and terrorist financing; transport safety; and protection of the environment.
The internal channels and procedures established under Head 9 will require:
(i) An acknowledgement of the receipt of disclosure within 7 days of that receipt.
(ii) The designation of an impartial person or persons[11] competent for: (a) maintaining communication with the reporting person; (b) asking for further information, where necessary; (c) providing feedback[12] to that reporting person within a ‘reasonable timeframe’ and within a maximum time of 3 months from acknowledgment of receipt or, if no acknowledgement was sent, 3 months from expiry of the 7-day period after the report was made; and (d) diligent follow-up.
(ii) Provision of clear and easily accessible information regarding the making of internal and external disclosures.
Head 10: External reporting channels
Head 10 confirms that the ‘competent authorities’ under the art 11 of the Directive will consist of the prescribed persons system established under the 2014 Act. Under SI 2020/367, there are 110 persons prescribed by the Minister for Public Expenditure and Reform for the purpose of receiving disclosures under s 7 of the 2014 Act.[13] These prescribed persons include seventy-nine regulatory and supervisory bodies and thirty-one local authorities. SI 2020/367 revokes the three preceding statutory instruments (SI 2014/339,[14] SI 2015/448,[15] and SI 2016/490[16]) setting out the prescribed persons under the 2014 Act. The 2014 Act was silent on the operation of reporting channels by prescribed persons. Head 10 imposes certain obligation on these prescribed persons requiring them, amongst other obligations, to:
(i) Establish independent and autonomous reporting channels, for receiving and handling protected disclosures.
(ii) Promptly, and within 7 days of receipt, acknowledge receipt unless the reporting person explicitly requested, or the prescribed person reasonably believes that acknowledging receipt would jeopardise the protection of the reporting person’s identity.
(iii) Diligently follow-up on the reports (unless minor/ contains no new meaningful information).
(iv) Provide feedback to the reporting person within a reasonable timeframe not exceeding 3 months/6 months in duly justified cases.
(v) Communicate the final outcome of investigations to the reporting person.
(vi) Designate one or more trained staff members to handle protected disclosures.
(vii) Publish information in a separate, easily identifiable, and accessible section of their website.
Heads 16-20 Protected Disclosures Office
One of the more notable features of the Heads of Bill is the proposal for the creation of a Protected Disclosures Office (‘PDO’). It is proposed that the PDO will be established within the Office of the Ombudsman and will be a prescribed person under s 7 of the 2014 Act. The main functions of the PDO are to:
(i) Transmit within 7 days any disclosures received under s 7 of the 2014 Act to a prescribed person/suitable authority for follow up.
(ii) If a prescribed person/suitable authority cannot be identified, the Director of the PDO must follow-up diligently.
(iii) Support the receipt and follow-up of disclosures made under s 8 of the 2014 Act to Government Ministers.
Head 21: Protection from retaliation
Protection for workers from retaliation is currently afforded to workers under the 2014 Act under s 11 (unfair dismissal), Sch 1 (interim relief for unfair dismissal), s 12 (penalisation), s 13 (tort), s 14 (civil immunity), s 15 (criminal immunity), and s 16 (confidentiality). It is important to note that only employees can bring claims under ss 11 and 12 before the Workplace Relations Commission (‘WRC’), whilst all workers can bring tort claims for detriment under s 13 before the civil courts. Article 21(8) of the Directive requires Member States to take ‘the necessary measures to ensure that remedies and full compensation are provided for damage suffered by persons referred to in Article 4 in accordance with national law.’ The Heads of Bill therefore extend the ability of persons included in Head 7 (except for shareholders who will be limited to claim for retaliation under s 13) to bring claims for penalisation under s 12 before the WRC. However, compensation is capped at €13,000, which falls foul of the ‘full compensation’ requirement under the Directive. Head 21 also extends interim relief to penalisation claims.
Conclusion
With the impending transposition deadline, the Heads of Bill appear to be somewhat rushed. There is a proposal to deal with penalties under Head 24 but states that the precise form of these penalties will be decided upon during the drafting process, in consultation with the Office of the Attorney General. On publication of the Heads of Bill, the Minister for Public Expenditure and Reform referred to the reversal of the burden of proof in retaliation proceedings, but the Heads are silent on this issue.[17] The Heads of Bill do not address the issue of trade secrets (currently included in s 5(7A) and requiring a ‘general public interest’ test) or defamation (currently included in s 14 and amending the Defamation Act 2009 providing for a defence of ‘qualified privilege’). Head 11 has made the test for a protected disclosure to a Minister under s 8 more cumbersome. Further, a requirement has been introduced under Head 10(5) for reporting persons to co-operate, as required, with any investigation of follow-up initiated by a prescribed person. These issues, and more, need to be addressed in order for the amended legislation to comply fully with the Directive and to ensure that the non-regression clause in art 25 of the Directive is not breached.
[1] Transparency International Ireland, ‘An Alternative to Silence: Whistleblower Protection in Ireland’ (TII January 2010) 4.
[2] Whistleblowers Ireland, ‘Brendan Howlin promises the whistleblower legislation will be ‘best in the world’’ (Whistleblowers Ireland, 28 February 2012) <https://whistleblowersireland.com/2012/02/28/brendan-howlin-promises-whistleblower-legislation-in-ireland-will-be-best-in-the-world/> accessed 17 June 2021. At the time of publication of The Draft Heads of the Protected Disclosures in the Public Interest Bill 2012, the UK’s Public Interest Disclosure Act 1998 (the provisions of which were incorporated into the Employment Rights Act 1996) was generally considered to represent an example of good practice. In 2009, the Parliamentary Assembly of the Council of Europe’s Committee on Legal Affairs and Human Rights deemed the UK legislation to be the model in this field of legislation as far as Europe is concerned. Pieter Omtzigt, ‘Explanatory Memorandum, The Protection of “whistle-blowers”’ (Council of Europe, 29 September 2009) para 37 <http://assembly.coe.int/nw/xml/XRef/Xref-XML2HTML-en.asp?fileid=12302> accessed 17 June 2021.
[3] Organisation for Economic Co-operation and Development, Committing to Effective Whistleblower Protection (OECD Publishing 2016) 178.
[4] Blueprint for Free Speech, ‘Gaps in the System: Whistleblower Laws in the EU’ (Blueprint for Free Speech 2018) 5.
[5] Transparency International, ‘A Best Practice Guide for Whistleblowing Legislation’ (TI 2018) 8, 9-10, 11, 15, 23, 24, 30, 35, 43, 55, and 62.
[6] Commission, ‘Communication from the Commission to the European Parliament, the Council and the European Economic and Social Committee on strengthening whistleblower protection at EU level Brussels’ COM(2018) 214 final.
[7] Department of Public Expenditure and Reform, ‘Protected Disclosures Act: Information for Citizens and Public Bodies’ (DPER) <www.gov.ie/en/publication/e20b61-protected-disclosures-act-guidance-for-public-bodies/#eu-whistleblowing-directive> accessed 14 June 2021.
[8] Minister McGrath publishes General Scheme of Protected Disclosures (Amendment) Bill (DPER, 12 May 2021) <www.gov.ie/en/press-release/d263a-minister-mcgrath-publishes-general-scheme-of-protected-disclosures-amendment-bill/> accessed 14 June 2021.
[9] ‘Follow-up’ is defined in ‘Head 2 Interpretation’ of the Heads of Bill and reflects the definition of this term in art 5(12) of the Directive, which provides that ‘‘Follow up’ means any action taken by the recipient of a report or any competent authority to assess the accuracy of the allegations made in the report and where relevant to address the breach reported, including through actions such as an internal enquiry, an investigation, prosecution, an action for recovery of funds or the closure of the procedure’.
[10] Section 21 of the 2014 Act already requires all public bodies to establish and maintain procedures for the making of protected disclosures by workers who are or were employed by the public body and for dealing with such disclosures. Article 25 of the Directive provides for a non-regression clause and therefore a threshold for application to public bodies could not be introduced.
[11] This may be the same person or department as the one that receives the reports.
[12] ‘Feedback is defined in ‘Head 2 Interpretation’ of the Heads of Bill and reflects the definition of this term in Art 5(13) of the Directive, which provides that ‘‘Feedback’ means the provision to the reporting person of information on the action envisaged or taken as follow-up and the grounds for such follow-up.’
[13] Protected Disclosures Act 2014 (Disclosure to Prescribed Persons) Order 2020, SI 2020/367.
[14] Protected Disclosures Act 2014 (s 7(2)) Order 2014, SI 2014/339.
[15] Protected Disclosures Act 2014 (Disclosure to Prescribed Persons) Order 2015, SI 2015/448.
[16] Protected Disclosures Act 2014 (Disclosure to Prescribed Persons) Order 2016, SI 2016/490.
[17] Minister McGrath publishes General Scheme of Protected Disclosures (Amendment) Bill (DPER, 12 May 2021) <www.gov.ie/en/press-release/d263a-minister-mcgrath-publishes-general-scheme-of-protected-disclosures-amendment-bill/> accessed 14 June 2021.
