WHISTLEBLOWING THE LAW

Transcription

1 Bar Council CPD / Employment Bar Association Update on Employment Law 2nd March 2015 WHISTLEBLOWING THE LAW Tom Mallon BL 1. Whistleblowing and whistleblower are two words which would have been very rarely spoken up until a couple of months ago. Now one could not read a daily newspaper without some article on the subject and TV and Radio interview Whistleblowers and persons close to the Whistleblower and it is fair to say that Whistleblowing is perceived as a good thing to be encouraged and protected. 2. This paper will seek to examine the law in relation to Whistleblowing by looking at what was the situation in Ireland, looking at the new legislation (the Protected Disclosures Act 2014) and also to look at the experience in the United Kingdom where their legislation has been in force for about 16 years to see whether some lessons can be learned from that experience. 3. What is a Whistleblower? Murdoch 1 defines it as Colloquial expression to describe a person who reports suspicions in respect of some wrongdoing. 4. An American law dictionary 2 defines it in slightly narrower terms as: An employee who reports employer wrongdoing to a governmental or law enforcement agency. 1 Murdoch s Dictionary of Irish law, 5 th Edition 2 Blacks Law Dictionary, 8 th Edition

2 5. The purpose and effect of Whistleblowing legislation is to protect employees who blow the whistle on their employers. Other persons may enjoy protection pursuant to other statutes however that is a subject beyond the scope of this paper. 6. The overall purpose of the legislation, it is submitted, is to encourage employees to raise genuine and reasonably held concerns about matters of public interest where knowledge of same comes to them through their employment. The encouragement to Whistle blow is given by giving protection against sanction or retaliation. THE PREVIOUS IRISH LEGISLATIVE POSITION 7. Irish law in this area had developed on a sectoral basis and accordingly the necessary protections were available only in certain professional and employment areas and only in respect of certain types of disclosures. The rationale for the approach on a sectoral basis is hard to understand but it does seem to have been a conscious decision of Government to proceed in that way. Many statutes currently contain some level of protection for Whislteblowers. 8. By way of example Sections 37 to 42 of the Central Bank (Supervision and Enforcement) Act 2013 sets out quite an elaborate protective regime for employees who make a protected disclosure when the person making the disclosure has reasonable grounds for believing that the disclosure will show one or more of the following:- (a) That an offence under any provision of financial services legislation may have been or may now be committed. (b) That a prescribed contravention may have been or may be being committed. (c) That any other provision of financial services legislation may have been or may be being contravened. 2

3 (d) That the evidence of any matter which comes within paragraphs (a), (b) or (c) has been, is being or is likely to be deliberately concealed or destroyed. 9. There are protective disclosure provisions in among other legislation the following: i. Labour Services Act 1987 ii. Protection for Persons Reporting Child Abuse Act 1998 iii. Prevention of Corruption (Amendment) Act 2001 iv. Standards in Public Office Act 2001 v. Competition Act 2002 vi. Communications Regulation Act 2002 vii. Health Act 2004 viii. Employment Permits Act 2006 ix. Consumer Protection Act 2007 x. Chemicals Act 2008 xi. Charities Act 2009 xii. National Asset Management Agency Act 2009 xiii. Inland Fisheries Act 2010 xiv. Criminal Justice Act 2011 xv. Property Services (Regulation) Act 2011 xvi. Protection of Employees (Temporary Agency Workers) Act The sectoral arrangements are not appropriate. The fact that some disclosures in certain areas are protected and other are not undoubtedly can lead to confusion and the lack of an overall coherent single piece of legislation has obviously denied the ability of many to make appropriate disclosures. Individuals cannot expect to have an understanding of a vast collection of complex legislative provisions. I would submit that neither trade union advisors to employees nor HR advisors would be typically familiar with the full range of protections. Individuals working in particular industries such as banking might be familiar with the law in their area. 3

4 11. The second criticism that can be laid at sectoral regime is that some of the statutory provisions only encourage the disclosure from certain individuals and whilst such persons may be protected from civil or criminal liability there is no protection against penalisation within the workplace. Some of the legislation only protects disclosures in respect of breaches of legislation as in the Central Bank (Supervision and Enforcement) Act 2013 above, whereas others allow for the reporting of a much wider level of wrongful activity. Further under the sectoral regime the remedies available vary considerably from statute to statue and the enforcement mechanism are not consistently applied in each particular statutory provision. Some for example provide that a complaint must be made to the appropriate employment rights body within 12 months from the date of the contravention whereas others have a time limit of six months. There are different standards for the extension of time for the making of a claim. Some of the legislation requires good faith or reasonable grounds on the part of the Whislteblower whereas some other legislation does not require that. Not all of the statutes provide for anonymity of Whislteblowers. Some of the statutory provisions deal with mandatory reporting. For example the Criminal Justice Act 1994 requires employees of financial institutions to report money laundering or suspicions of money laundering to An Garda Siochana and some statutes provide that non reporting may give rise to a criminal sanction. 12. Government policy changed in 2012 when the sectoral approach was abandoned to be replaced by a single piece of protected disclosures legislation. The Protected Disclosures Act 2014 does not repeal the present sectoral arrangements. The Act sets out amendments to a list of legislation which in effect converts the protected disclosure in the other legislation into a protected disclosure within the meaning of the Protected Disclosures Act. However the individual sectoral provision remains in force as it seems that it was felt that it would be too complex to deal with the inconsistencies within the current system whilst at the same time ensuring that those protections were not diluted or extinguished by amendment. 4

5 13. The effect of this approach is that under the 2014 Act disclosures which would have been protected under the earlier legislation will now generally come within the ambit of the Act but where a disclosure falls outside the Act it will still be protected by the sectoral legislation. The big effect of this approach is also to in many cases, substantially increase the level of compensation that might be awarded in an appropriate case. PROTECTED DISCLOSURES ACT The Protected Disclosures Act was enacted on 8 th July 2014 and it is envisaged as a single all encompassing piece of legislation to protect all workers in all sectors of the economy. 15. One might ask why do we need this piece of legislation. It seems to me that the answer will be readily forthcoming if we just consider some of the high profile Whislteblowing cases of recent months. If we consider matters in the past there can be no doubt but the availability of Whislteblower protection legislation and more particularly the encouragement to make disclosures might well have altered some very significant recent historical issues. One has only to think about the various issues that were the subject of lengthy and extensive tribunal inquiries, not to mention some of the child abuse scandals and much of the political wrongdoing of which we are now only too aware. 16. The Act seeks to encourage Whislteblowing by its structure and more particularly to protect Whislteblowers. It is appropriate to set out in some detail some of the principle definitions contained in the act so that a complete understanding of the proposed scheme is fully understood 17. Protected disclosure is defined as being a disclosure of relevant information made by a worker in accordance with Sections 6, 7, 8, 9 or 10 of the Act. 5

6 18. Relevant information is defined as information which: (a) in the reasonable belief of the worker, it tends to show one or more relevant wrongdoings, and (b) it came to the attention of the worker in connection with the worker s employment. 19. Relevant wrongdoings are the following: (a) that an offence has been, is being or is likely to be committed. (b) that a person has failed, is failing or likely to fail to comply with any legal obligation, other than one rising under the worker s contract of employment or other contract whereby the worker undertakes to do or perform personally any work. (c) that a miscarriage of justice has occurred, is occurring or is likely to occur. (d) endangered. that the health or safety of an individual has been, is being or is likely to be (e) that the environment has been, is being or is likely to be damaged. (f) that an unlawful or otherwise improper use of funds or resources of a public body, or of other public money, has occurred, is occurring or likely to occur. (g) that an act or omission by or on behalf of a public body is oppressive, discriminatory or grossly negligent or constitutes gross mismanagement, or (h) that information tending to show any matter falling within any of the preceding paragraphs has been, is being or is likely to be concealed or destroyed. 20. The Act expressly provides that it is immaterial whether a relevant wrongdoing occurred within the State or elsewhere and it is also irrelevant whether the law applying to that alleged wrongdoing is that of the State or that of another country or territory 6

7 21. The Act provides a stepped or tiered disclosure process with the objective that disclosure should be, wherever possible, made internally. The stepped procedure is contained in Section 6 to 9 inclusive of the Act. 22. Section 6 provides for a disclosure to be made to the worker s employer. Section 7 provides for disclosures to prescribed persons if the employee reasonably believes that the relevant wrongdoing falls within the matters in respect of which that person is prescribed under the Act and that the information disclosed and any allegations contained in it are substantially true. Section 8 provides for the making of disclosures to a Minister by a worker employed in a public body and the relevant Minister is the Minister who has responsibility for that public body. Section 9 provides for disclosures made by the worker in the course of obtaining legal advice. That legal advice may be sought from a barrister, solicitor or trade union official. 23. It is clear that in the circumstances the protected disclosure must be made at the lowest possible level however Section 10 provides for disclosures in other cases and same will be permissible if: (a) the worker reasonably believes that the information disclosed and any allegation in it are substantially true (b) the disclosure is not made for personal gain, (c) any one or more of the conditions in subsection 10(2) is met, and (d) in all the circumstances of the case it is reasonable for the worker to make the disclosure. 24. The conditions set out in subsection 2 are that: (a) at the time of making the disclosure the worker reasonable believes that he would be subjected to penalisation by this employer if he made a disclosure in accordance with Section 6, 7 or 8. 7

8 (b) that, in a case where no relevant person is prescribed for the purposes the worker reasonably believes that it is likely that evidence relating to the relevant wrongdoing will be concealed or destroyed if he makes a disclosure under Section 6. (c) that the worker has previously made a disclosure of substantially the same information in accordance with Section 6, 7 or 8 or (d) the relevant wrongdoing is of an exceptionally serious nature. 25. Part III of the Act sets forth the protections afforded to persons who make disclosures. 26. Section 11 incorporates a number of significant amendments to the Unfair Dismissals Act insofar as the dismissal arises wholly or mainly from the making of a protected disclosure. In the first instance the qualifying service periods do not apply and secondly such a dismissal is of the automatic unfair type. Thirdly the maximum compensatory award is increased from two years remuneration to five years remuneration. 27. Section 11 of the Act provides that the award of compensation under the Unfair Dismissals Act may be reduced by up to 25% if the investigation of the relevant wrongdoing was not the sole or main motivation for making the disclosure. 28. The act also provides significant protection for Whistleblowers against penalisation. Penalisation is widely defined in the Act and an employer is prohibited from carrying out any act or omission that effects a worker to the worker s detriment including suspension, layoff or dismissal, demotion or loss of opportunity for promotion, transfer of duties or change of location of place of work or reduction in wages or a change in working hours. Penalisation also includes the imposition of any disciplinary reprimand or other penalty or other unfair treatment, coercion, intimidation or harassment. 29. Applications for redress for penalisation are made at first instance to the Rights Commissioner and the Rights Commissioner may require the employer to take a specified course of action and require the employer to pay compensation up to a maximum of five 8

9 years remuneration if the Rights Commissioner makes a finding in favour of the employee. That compensation may be reduced by up to 25% if the investigation of the relevant wrongdoing was not the sole or main motivation for the making of the original disclosure. An appeal lies to the Labour Court from a decision of the Rights Commissioner under the penalisation clause. 30. Section 13 provides that persons, including workers, employees and third parties, may have a cause of action in tort against a person who causes detriment to them because they, or another person, has made a protected disclosure. Such an action in tort cannot be brought together with a claim for penalisation under the Act or a claim under the Unfair Dismissals Act. Detriment is defined as including coercion, intimidation or harassment, discrimination, disadvantage or adverse treatment in relation to employment, injury, damage or loss and/or threat of reprisal. This provision is very interesting in that it gives protection to persons other than the employee who actually made the disclosure and one could envisage family members or perhaps even fellow workers suffering detriment because of an act of Whistleblowing. 31. The Act also provides that the making of a protected disclosure will give a defence of qualified privilege under the Defamation Act 2009 and also the worker making a protected disclosure will be immune for civil or criminal liability in respect of same. The immunity in respect of criminal liability will be limited to circumstances where the Whistleblower reasonably believed that he was making a protected disclosure. 32. The Act also creates a unique new remedy of interim relief pending a determination for claims of unfair dismissals. 33. Schedule 1 to the Act provides that an employee who claims to have been dismissed wholly or mainly for having made a protected disclosure may apply to the Circuit Court for interim relief. Such an application must be made within 21 days immediately following the date of dismissal but that period may be extended by the Court. Such an application must be made on written notice to the employer and the Court should not postpone the hearing of 9

10 any such application except where it is satisfied that special circumstances exist which justify it doing it. The envisaged procedure before the Circuit Court is very unusual. The schedule provides that where on hearing an employee s application and it appears to the Court that there are substantial grounds for contending that that dismissal results wholly or mainly on the making of a protected disclosure the Court should announce its findings and explain to both parties, if present, the powers of the Court on such applications. The Court is then required to ask the employer if he is willing, pending the determination or settlement of the unfair dismissal claim, to reinstate the employee or if not to reengage the employee in another position on terms and conditions not less favourable. If the employer states a willingness to reinstate the employee then the Court shall make the order to that effect. If the employer states a willingness to reengage in another position and specifies the terms on which he is willing to do so the Court is then obliged to ask the employee whether he is willing to accept the position on those terms and conditions. If the employee is willing to accept the position then the Court makes an order to that effect. If the employee is not willing to accept the offer of reengagement on those terms and the Court is of the view that the refusal is reasonable then the Court shall make an order for the continuation of the employee s contract of employment and otherwise the Court shall make no order. The schedule also provides that if on the hearing of an application the employer fails to attend or states an unwillingness either to reinstate or reengage then the Court shall make an order for the continuation of the contract of employment. An order for the continuation of an employee s contract requires the continuation of the payment of all benefits including pay, pension rights and similar matters and also ensures continuity of employment. The regulations also provide that an employer or an employee may apply at any time for the revocation or variation of the order and there are express provisions in relation to the calculation of normal pay and how payments are to be dealt with in respect of any subsequent order for compensation. In circumstances where an employer has not complied with the Circuit Court order in relation to reinstatement or reengagement then the Court shall make an order for the continuation of the employee s contract of employment and order the employer to pay compensation. The amount of that compensation is so much as the Court considers just and equitable. 10

11 34. The schedule to the Act does not set out any procedural rules as to how this matter is to be initiated before the Court or indeed how the Court is to deal with matters of evidence whether that be given orally or on affidavit. One can assume that the rules committee of the Circuit Court will in due course make rules and one assumes that the likelihood is that the application would be made by way of Notice of Motion probably grounded on an affidavit, although one can envisage that in some cases, oral evidence will actually be necessary. 35. This quite an extraordinary new development. At the same time as the Circuit Court appeal jurisdiction under the Unfair Dismissals Act is being removed this new and extraordinary jurisdiction is given to it. One can immediately ask why is this interim remedy only to be available to those who claim to be dismissed by reason of the making of a protected disclosure? Why is such an important remedy not available to others who are dismissed for equally objectionable reasons? The same question can be asked as to why is the compensation for disclosure dismissals to be more than doubled. Surely there are other dismissal cases equally as objectionable as ones based on Whislteblowing. COMPARISON WITH UK LEGISLATION 36. The purpose of the legislation was described by Mummery LJ in ALM Medical Services Limited v Bladon 3 as follows:- The self-evident aim of the provisions is to protect employees from unfair treatment (ie victimisation and dismissal) for reasonably raising in a responsible way genuine concerns about wrongdoing in the workplace. The provisions strike an intricate balance between (a) promoting the public interest in the detection, exposure and elimination of misconduct, malpractice and potential dangers by 3 [2002] ICR

12 those likely to have early knowledge of them, and (b) protecting the respective interests of employers and employees. There are obvious tensions, private and public, between the legitimate interest in the confidentiality of the employer's affairs and in the exposure of wrong. 37. Having regard to the similarities between the English legislation in force and the proposed legislation in this jurisdiction it may be useful to look, briefly, at some decisions under the English legislation which might give us guidelines to how things will be dealt with in the future. THE ROLE OF THE TRIBUNAL 38. In Harrow LBC v Knight 4 the UK Employment Appeals Tribunal set out briefly what it must determine in such cases as follows:- i. That the employee had made a protected disclosure. ii. iii. That the employee had suffered some identifiable detriment. That the employer had done an act or omitted to do an act by which the employee was subject to detriment. iv. That this act or omission had been done by reason of the making of the protected disclosure. WHAT CONSTITUTES A DISCLOSURE 4 [2003] IRLR

13 39. In Everett Financial Management Limited v Murrell 5 the claimant claimed constructive dismissal caused by a protected disclosure. He was an equity dealer and he and a number of other colleagues became concerned about a particular practice which they were required to carry out. They raised their concerns in a meeting and they wrote a petition to directors seeking assurances that they were not engaged in any activity that was unlawful, could be construed as unlawful or in breach of any Regulation or that could jeopardise their individual personal registration. The EAT found that there was no disclosure of any information falling within the relevant section of the Act. It referred to the fact that a number of concerns had been raised which were not of themselves a qualifying disclosure and that thereafter all they sought was assurances. Merely expressing concerns and seeking assurances that there was no breach of a legal obligation did not involve a disclosure of information within the relevant statutory provisions. 40. In Bolton School v Evans 6 the Employment Tribunal held that the dismissal was either automatically unfair and if not automatically unfair he was unfairly dismissed. Mr Evans had deliberately hacked into a computer system in the school to test and demonstrate his belief about the inadequacy of the computer security. He was disciplined for this unlawful interference with the computer and then he resigned in protest at same. The Employment Tribunal said that it would: 5 EAT 952/02 December [2006] IRLR

14 emasculate the public policy behind the legislation for us to accept the respondent s submission that the claimant was subject of a disciplinary action not because he had blown the whistle on a suspected failure to comply with a legal obligation but rather because he had hacked into the respondent s computer system without authority. To allow an employer to defeat a Public Interest Disclosure Act case in this way would be to drive a coach and horses through the intention of the legislature that whistle blowers should have employment protection. 41. The Employment Appeals Tribunal (Elias J) disagreed. The EAT held that there was no disclosure and said: An employee cannot be entitled to break into his employer s filing cabinet in the hope of finding papers which will demonstrate some relevant wrongdoing which he can then disclose to the appropriate person. He is liable to be disciplined for such conduct, and that is so whether he turns up such papers or not. Provided that his misconduct is genuinely the reason for the disciplinary action, the employee will not be protected even if he does in fact discover incriminating papers. Success does not retrospectively provide a cloak of immunity for his actions, although he will then of course be protected with respect to the subsequent disclosure of the information itself. Putting it simply, it seems to us that the law protects the disclosure of information which the employee reasonable believes tends to demonstrate the kind of 14

15 wrongdoing, or anticipated wrongdoing, which is covered by Section 43B. It does not protect the actions of the employee which are directed to establishing or confirming the reasonableness of that belief. The protection is for the whistle blower who reasonably believes, to put it colloquially if inaccurately, that something is wrong, not the investigator who seeks either to establish that it is wrong or to show that his concerns are reasonable. DISCLOSURE VERSUS ALLEGATION 42. In Cavendish Munro Professional Risks Management Ltd v Geduld 7 the EAT drew a distinction between disclosure and the making of an allegation. Slade J made the following observation: That the Employment Rights Act recognises a distinction between information and allegation is illustrated by the reference to both of these terms in Section 43E. Although that Section does not apply directly in the context of this case, nonetheless it is included in the section of the Act with which we are concerned. It is instructive that those two terms are treated differently and can therefore be regarded as having been intended to have different meanings. Further, that information and an allegation are different is clear from the victimisation provisions in the Sex Discrimination Act 1975 and the Race Relations Act [2010] ICR

16 She went on to say that the ordinary meaning of giving information is conveying facts. In the course of the hearing before us, a hypothetical was advanced regarding communicating information about the state of a hospital. Communicating information would be the wards have not been cleaned for the past two weeks. Yesterday Sharps were left lying around. Contrasted with that would be a statement that you are not complying with Health and Safety requirements. In our view this would be an allegation not information. 43. In Goode v Marks & Spencer Plc 8 the company proposed to amend its redundancy scheme. The claimant told his employer that he thought the proposals were disgusting. He ed a national newspaper making other statements, including that it would be a prelude to a wave of redundancies. The Employment Tribunal found that neither his comment to his employer or the constituted disclosure of information and the EAT dismissed his appeal. 44. On Royal Cornwall Hospital Trust v Watkinson 9 the claimant was the respondent s Chief Executive. He disclosed to the respondent s Board that an opinion had been obtained from Counsel stating that the respondent Trust and the Primary Care Trust would be acting unlawfully if they did not conduct public consultation before taking a particular action in 8 EAT 0442/09 April UK EAT 0378/10 August

17 relation to certain services. This information came to the attention of the Health Authority which regarded it as a severe irritant. The claimant was suspended and dismissed. The Employment Tribunal found that the dismissal was as a result of the pressure applied by the Health Authority on the respondent as a result of the disclosure and was automatically unfair. The decision of the Employment Tribunal was upheld in the EAT who rejected the submission that the disclosure was a mere allegation rather than the making of a disclosure. It held that it was giving information as to what had to be done by the Respondent to comply with their obligations. It is interesting to note that in that case the applicant was awarded the sum of 1.2 Million initially which was reduced on review to 818,000. BURDEN OF PROOF 45. The issue arose for consideration in Kuzel v Roche Products Ltd 10. The claimant asserted that she had been dismissed for making protected disclosures. The employer argued that she was dismissed for some other substantial reason regarding her relationship with her senior colleague. The EAT held that her dismissal was unfair but not for the reasons advanced by the employer and not by reason of the protected disclosure. The EAT (Peter Clark J) set out the approach that should be followed in such matters as follows:- (1) Has the claimant shown that there is a real issue as to whether the reason put forward by the respondent, some other substantial reason, was not the true reason? Has she raised some doubt as to that reason by advancing the s.103a reason? 10 [2007] IRLR

18 (2) If so, has the employer proved his reason for dismissal? (3) If not, has the employer disproved the s.103a reason advanced by the claimant? (4) If not, dismissal is for the s.103a reason. In answering those questions it follows: (a) that failure by the respondent to prove the potentially fair reason relied on does not automatically result in a finding of unfair dismissal under s.103a; (b) however, rejection of the employer's reason, coupled with the claimant having raised a prima facie case that the reason is a s.103a reason entitles the tribunal to infer that the s.103a reason is the true reason for dismissal, but (c) it remains open to the respondent to satisfy the tribunal that the making of the protected disclosures was not the reason or principal reason for dismissal, even if the real reason as found by the tribunal is not that advanced by the respondent; (d) it is not at any stage for the employee (with qualifying service) to prove the s.103a reason. 46. The Court of Appeal 11 whilst not disapproving of the approach set out in the Employment Appeals Tribunal decision made some interesting comments on the issue. 11 [2008] IRLR

19 47. Mummery LJ stated that:- I agree that when an employee positively asserts that there was a different and inadmissible reason for his dismissal, he must produce some evidence supporting the positive case, such as making protected disclosures. This does not mean, however, that, in order to succeed in an unfair dismissal claim, the employee has to discharge the burden of proving that the dismissal was for that different reason. It is sufficient for the employee to challenge the evidence produced by the employer to show the reason advanced by him for the dismissal and to produce some evidence of a different reason. 48. In Nunn v Royal Mail Group Ltd 12 the Employment Appeals Tribunal relying on Kuzel v Roche Products Ltd drew a distinction between the approach to be taken in discrimination cases and the approach to be taken in unfair dismissal cases when it said the following: In discrimination claims, there is clearly a necessity to exercise a degree of care in relation to the establishment of primary facts. In order to set up the shifting burden of proof, the court is urged to look carefully in relation to what inferences can be drawn from those facts particularly as the basic information will often be in the hands of the employer rather than the employee. However, in unfair dismissal claims, the burden is on the employer, there being no need for the employee to set 12 [2011] ICR

20 up sufficient facts for that burden to exist. Obviously, a tribunal, in assessing what reasons the employer is putting forward, will have in mind what the employee is saying about the reason, and will need to test the employer's witnesses in relation to those matters that point to a reason other than that that the employee is putting forward. But, at the end of the day, it is a matter for the tribunal to come to a view as to whether, on the balance of probabilities, the employer has satisfied them as to the reason. 20