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Whistleblower Policies in Finance: A Crucial Step Towards Transparency and Accountability
In the wake of high-profile whistleblowing allegations and the ongoing Disclosures Tribunal, it has become increasingly clear that robust whistleblower policies are essential for financial institutions operating in Ireland. The Protected Disclosures Act 2014 provides a framework for protecting individuals who come forward to report wrongdoing within their workplace.
What is Protected by the 2014 Act?
The 2014 Act defines a “worker” broadly, encompassing:
- Employees
- Contractors
- The self-employed
- Agency workers
- Those on work experience
To qualify for protection, a disclosure must meet certain criteria, including that it tends to show one or more relevant wrongdoings as set out in the Act. These can include:
- Criminal offences
- Failures to comply with legal obligations
- Improper uses of funds or resources
Stepped Disclosure Regime
The Act provides for a stepped disclosure regime, where different criteria must be met depending on the category of person to whom the disclosure is made.
Disclosures can be made to:
- An employer
- A prescribed person (such as the Central Bank)
- In other cases, including to third parties like the media
Protections for Whistleblowers
Under the 2014 Act, recipients of disclosures are required to protect the whistleblower’s identity insofar as possible, with certain exceptions. Whistleblowers also have immunity from:
- Criminal liability
- Civil proceedings (except for defamation cases where a defence of qualified privilege may apply)
Importance of Implementing Whistleblowing Policies
While there is no general obligation on employers outside the financial services industry to implement whistleblowing policies, it is highly recommended that they do so. By providing a channel for employees to report concerns internally, employers can:
- Incentivize staff to communicate their worries rather than taking them elsewhere
- Investigate and rectify issues before they become public, potentially damaging the company’s reputation
Sectoral Legislation Requirements
In addition to the 2014 Act, some sectoral legislation requires mandatory reporting of certain breaches or wrongdoing. For example:
- Firms operating in the financial services industry must have procedures in place for employees to report suspected breaches of specific legislation.
Conclusion
The importance of whistleblowing policies cannot be overstated, particularly in light of recent high-profile allegations and the ongoing Disclosures Tribunal. As Muireann Reedy, Senior Associate at Dillon Eustace’s Regulatory Investigations Unit, notes:
“While there is no general obligation on other employers to have whistleblowing policies in place it is recommended that such policies are implemented, as it may incentivise staff to communicate any concerns internally rather than informing an external party of them.”
In conclusion, the 2014 Act has significantly improved whistleblower protections in Ireland. However, it is essential for all financial institutions operating in the country to have robust whistleblowing policies in place to ensure transparency and accountability. Failure to do so may result in reputational damage and potentially significant legal consequences.