Thursday, March 13, 2014

Ireland - Significant Protection to be Introduced for Employees who Blow the Whistle on their Employers

To tell or not to tell? That is the question that may well have tortured many employees on sleepless nights in the past. Our reluctance to be seen as an informer starts in the playground. Who wanted to earn the reputation of being a tell-tale? Later as an adult, did you want to be known as a “rat”, a “weasel” or a “snake”? Perhaps the general attitude to disclosure is best summed up in the title of a poem by the Nobel Prize winning Irish poet, Seamus Heaney, “Whatever you say, say nothing”.

In Ireland, draft legislation has recently been published which is aimed at protecting those who decide to blow the whistle on perceived wrongdoing by their employers. Whether or not the proposed legislation, when introduced, will lead to a shift in the way informers are viewed is uncertain. What is certain, however, is that an employee who decides to make a “protected disclosure” as defined in the forthcoming legislation will be entitled to an unprecedented level of protection under Irish law. In this article I examine a number of key issues arising from the Protected Disclosures Bill 2013 (the “Bill”), including who is protected, what is protected and what the protections are.

The approach to date

When the Bill is enacted in Ireland, it will provide a single framework of protection for whistle-blowers. Until now, statutory protection has been afforded to whistle-blowers only in certain specific sectors. This was an unfair and unwieldy system and, therefore, the new legislation will introduce a much needed and welcome consistency.

Who is protected by the Bill?

The Bill protects “workers” which is broadly defined to include not just current and former employees but also contractors, trainees and agency staff.

In Ireland, in order to be entitled to bring a claim of unfair dismissal, employees generally need to have one year’s continuous service with their employer. It is significant that the Bill does not confine its protections to employees who have one year’s service. Therefore, it is likely that many dismissed employees with less than one year’s service will attempt to argue that their employment was terminated for making a protected disclosure so as to benefit from the protection offered by the Bill

What is protected?

Employees who make a “protected disclosure” will come within the new legislation’s protections. The term “protected disclosure” is very broadly defined in the Bill. It means the disclosure of relevant information. This is information which firstly, tends to show a “relevant wrongdoing” in the worker’s reasonable belief and secondly, came to the worker’s attention in connection with his/her work. It is disappointing and unhelpful that that Bill does not define what precisely is contemplated by “reasonable belief”.

Employers will be particularly concerned by the fact that the motivation of the employee in making the disclosure is irrelevant to whether it is protected. Some comfort might be taken from the fact that an employee’s motivation may be relevant to the level of compensation payable in the event of dismissal for making a protected disclosure. If the employee’s sole or main objective in making the disclosure was not the investigation of the relevant wrongdoing, the compensation payable may be reduced by up to 25%.

So what is a “relevant wrongdoing”? Again, the definition is very broad and covers, the commission of an offence, a miscarriage of justice, non-compliance with a legal obligation, health and safety dangers, misuse of public monies, mismanagement of public affairs, damage to the environment, or concealment or destruction of information relating to any of the above. As regards a wrongdoing relating to non-compliance with a legal obligation, Ireland has learned from the UK experience, and issues raised relating to an individual employee’s contract of employment will not be protected.

Interestingly, the Bill provides that it is irrelevant whether or not the reported wrongdoing occurred in Ireland or elsewhere and this will be of particular note to international companies doing business in Ireland.
As regards the burden of proof in proceedings concerning a protected disclosure, the disclosure will be presumed to be protected until the contrary is proven.

Whilst the Bill has not yet been enacted, it specifically provides that disclosures made before it comes into law may be protected. Therefore, employers in Ireland who are currently considering terminating an employee’s employment would be well-advised to apply their minds to whether or not the employee could argue that the termination resulted wholly or mainly from his/her making a protected disclosure. The potential financial consequences of a breach of the new legislation when it is introduced, which are discussed below, render such consideration an absolute necessity.

What are the protections?

A range of substantial protections for employees who make a protected disclosure will be introduced. In the first place, an employee who is dismissed, wholly or mainly for making a protected disclosure, may potentially be awarded compensation of up to five years’ gross remuneration. This is two and half times the maximum level of compensation which may currently be awarded in an unfair dismissal claim. Those who are familiar with Irish employment protection legislation will be aware that only one other Act provides for a similar level of compensation to potentially be paid to an employee.

Employees who make a protected disclosure are also entitled to protection from penalisation or threatened penalisation and again the potential compensation is up to five years’ gross remuneration. This type of provision is seen in a number of other pieces of employment protection legislation, including that relating to employment equality and health and safety. Penalisation is very broadly defined as any act or omission that affects a worker to his/her detriment, including, for example, demotion, loss of promotional opportunity, unfair treatment and disadvantage.

An employee who is dismissed may make an application for interim relief to the Circuit Court. This was introduced in a recent amendment to the draft legislation and is designed to counteract the fact that there is likely to be a lengthy delay between the date of dismissal and any subsequent unfair dismissal hearing. One of the criticisms which had been levied at the Bill, following its publication, was that the delays in the Irish unfair dismissal system could act as a disincentive to employees making a disclosure. Ireland has learned from the experience in other jurisdictions by including a provision for interim relief in the Bill.

Employees are also entitled to civil and criminal immunity in making a protected disclosure and have a cause of action in tort where they or their family experience coercion, intimidation, harassment or discrimination at the hands of a third party for having made a protected disclosure.

What steps should employers take to prepare for the passing of the Bill?

Employers in Ireland should review their existing whistle-blower protection policies to ensure that they are robust. In any termination of employment, employers should also give careful consideration to whether or not there might be scope for an employee to argue that the dismissal was wholly or mainly because of his/her making a protected disclosure.

In my view, the potential financial implications of the new legislation, coupled with the lack of a service requirement and the breadth of the definition of the term “protected disclosure” make this one of the most significant changes in the employment protection regime in Ireland in decades. “To tell, or not to tell?”