Upcoming Whistleblowing legislation

The European Union approved new EU wide rules on whistleblowing after adopting a Directive on the protection of persons who report breaches of Union law. EU states were given until December 2021 to bring their national Whistleblowing legislation in line with this EU Directive.

 

Irish employers have been regulated by the Protected Disclosures Act since 2014. They will, therefore, be familiar with many of the key principles set out in the Directive. Like the Protected Disclosures Act, the Directive provides legal protection against retaliation to Whistleblowers who speak up regarding potential wrongdoings in the workplace and sets out a hierarchy of reporting channels.

 

However, the Directive also includes additional provisions, some of which may be new to Irish employers. 

  1. The Directive expands the scope of those covered by its rules, extending to self-employed persons, shareholders, non-executive directors, volunteers and unpaid interns. 
  2. The Directive’s rules will cover areas such as public procurement, financial services, prevention of money laundering and public health. 
  3. The Directive extends the obligation to put in place whistleblowing procedures to companies employing 50 employees or more. 
  4. The Directive contains more prescriptive rules regarding reporting channels and requires that reports are followed up within 3 months with final outcomes communicated within a reasonable timeframe not exceeding 3 months, or 6 months where justified. 
  5. The Directive provides for a robust duty of confidentiality requiring the protection of the identity of the reporting person. 

Even though companies with less than 50 employees are exempt from the rules in the directive, such companies should consider implementing whistleblower schemes. This would be a good idea in case the company grows to more than 49 employees, but also because implementation of a whistleblower scheme will send a signal to all employees, that the company wants to deal with any criminal and unethical behaviour. Subsequently, employees should not should not be worried about reporting any such suspicious behaviour.

 

Whistleblowing is a cost effective first line of defense for your business. All businesses should have a policy on Whistleblowing as it is a support mechanism, which describes how employees are expected to behave should they find irregular activity happening in the company. A whistleblowing policy ultimately serves to protect the individual and the company. Where an individual discovers information which they believe shows serious malpractice or wrongdoing within the company, employees are encouraged to disclose this information internally in the first instance without fear of reprisal, and there should be arrangements to enable this to be done independently of line management (although in relatively minor instances the line manager would be the appropriate person to be told).

 

The SFA advises companies to devise a suitable internal reporting strategy and communicate to all members of the company to ensure employees feel comfortable reporting any wrongdoing. The channels should, offer anonymity, be available in the relevant languages, have comprehensible explanatory texts and be accompanied by an effective internal communication strategy. By doing so, companies have an opportunity to identify and manage risk at an early stage, helping to avoid or limit financial and reputational damage.

 

SFA will keep members updated with developments as they arise. You can view more information on whistleblowing here or contact Emma Crowley on 01 605 1668 or at emma.crowley@sfa.ie if you have any further questions 

 

 

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In this issue
SFA Fortnightly Update
SFA in the media
IP and SME’s: Taking your ideas to market
National Workplace Wellbeing Day 2021
Covid-19 and the Irish SME Sector: Supporting Recovery and Growth
Upcoming Whistleblowing legislation
VAT Alert – eCommerce VAT change & Refresher on Brexit VAT
SFA Employment Law Seminar
Intellectual Property Webinar
SFA Skillnet Ireland Masterclasses & Workshops