Raiseaconcern.com

If no one has the courage to raise it then it can take years to uncover. Damage to the employer can be financial, reputational or both. Customers, the lifeblood of the business, can suffer. Suppliers and service providers can be adversely impacted. There can be legal or regulatory implications – even fines.

Wrongdoing or malpractice can be a one-off or ongoing, and can involve illegal, unethical or immoral behaviour or breach of process, procedure, codes or policies.

It can be deliberate or unintentional, ranging from minor to very significant and can involve one or more employees or members of management – from the most junior to the most senior.

So the Protected Disclosures Act 2014, which came into operation last Tuesday, is welcome – not just as a protection for employees who make qualifying “protected disclosures”, but also for helping business to detect and prevent wrongdoing and build a better business culture.

Encouraging an ethos where concerns are raised directly with line managers is the best possible scenario. Employees will do this, particularly for smaller or operational issues,

provided there is an open non-threatening environment. They will discuss their concern with their boss and often resolve it there and then. If the concern is investigated and addressed – then everyone is happy.

Where, however, a concern is more material, particularly where it implicates a manager, superior or other work colleagues, employees will, more frequently, hesitate before raising it with their boss. Employees will be wary of the consequences and concerned about reprisal, not just from bosses, but from colleagues and others.

It takes great courage to talk to a manager or director about a suspicion of wrongdoing. The employee may be suspicious, but lack hard evidence or the confidence to bring the matter forward. So despite moral objections to wrongdoing or malpractice, employees often choose to remain silent.

In the absence of a safe alternative, serious wrongdoing will most likely persist, but eventually will be discovered or leaked. And then employers are left to investigate and deal with what has grown to be a much more serious issue, under the supervision of enforcement agencies or under the glare of media attention.

The Protected Disclosures Act provides welcome protection for employees who have a “reasonable belief” that there is wrongdoing afoot in the workplace.

While it should also be welcomed by employers, it will place significant new responsibilities on them, as well as on company directors and parts of the public service.

Employers will be expected to have robust processes in place to facilitate employee whistleblowing and to protect whistleblowers.

Existing corporate governance

requirements for plcs place responsibility on their audit committees to ensure management have appropriate processes in place to deal with whistleblowing.

Despite this, many existing self-administered whistleblowing schemes have only worked to a very limited extent.

Notwithstanding the voluntary protection offered to date by some employers and the welcome protection now offered to all by the legislation, employees who have concerns about wrongdoing may still be nervous about raising them because they will still fear being found out and subject to subtle reprisal from line managers or labelling by colleagues.

Falling back on the protection of the new legislation, welcome though it is, should be the last resort. Instead, employers should assist employees to allay their fears and make it easier for them to raise issues.

While raising issues directly with an employer may be the ideal, the legislation provides a number of alternatives to address the fears of employees.

Rather than raising a concern directly to an employer, it provides that the employer may nominate a third party to whom concerns can be raised, providing the option of protecting the identity of the employee.

The Minister for Public Expenditure and Reform can also make regulations prescribing persons or bodies to fill this role, presumably for public service employees.

Disclosures about wrongdoing can also be made to a minister responsible for a public servant’s place of work or to a legal adviser, if the disclosure is made by a worker in the course of obtaining legal advice from a barrister, solicitor or trade union official.

In all such cases, the whistleblower should have the protection of the legislation.

It will also be possible to claim protection for raising concerns with persons other than those just mentioned, such as to the press, but only if the wrongdoing is exceptionally serious in nature. A much higher burden of proof will exist and a number of conditions, such as exhausting all other avenues, must be satisfied.

Where an employee raises an issue directly with his or her employer, the person to whom the protected disclosure is made or referred is also obliged not to disclose the whistleblower’s identity, except in the case of stated exceptions.

A failure to comply is actionable by the whistleblower if they suffer any loss as a result.

Employers would be well advised to embrace the new legislation by reinvigorating existing or setting up a new whistleblowing scheme.

The benefits of doing so include creating an atmosphere of trust and confidence, providing an opportunity for early rectification of problems and facilitating an internal rather than external process for employees to raise concerns.

It would also help boards and senior management meeting their personal compliance and governance accountabilities, demonstrating to investors that a business has a strong emphasis on good governance.

Philip Brennan is managing director of Raiseaconcern.com, a body that advises on and administers whistleblowing schemes. Email: philipbrennan@raiseaconcern.com