Seanad Éireann díospóireacht -
Wednesday, 25 Sep 2013

Vol. 226 No. 4

Protected Disclosures Bill 2013: Second Stage

Question proposed: "That the Bill be now read a Second Time."

Minister for Public Expenditure and Reform (Deputy Brendan Howlin)

I seem to be in this House very frequently, about which I am very glad. As Senators will be aware, the introduction of protected disclosures legislation in this jurisdiction has a long history. It is worth recalling that it was as long ago as 1999 that my colleague, the Minister for Communications, Energy and Natural Resources, Deputy Pat Rabbitte, introduced a Private Members' Bill proposing the introduction of a regime for the protection of whistleblowers. Although initially accepted by the then Government, it had a long and tortuous passage, only to be eventually dropped as a Government priority in 2004. By 2006 the Government of the day had decided to deal with the issue on a sectoral basis, but, as we are all aware, this resulted over time in an incomplete, uneven and patchy framework of protections. I am pleased to be able to say the Bill I am introducing today fulfils a commitment in the programme for Government to introduce whistleblower legislation and reflects commitments I have made on several occasions to introduce a single overarching framework of protections for workers in all sectors, public and private.

The Bill addresses what has been identified as a significant gap in Ireland’s anti-corruption framework, highlighted, in particular, in the final report of the Mahon tribunal which recommended the introduction of pan-sectoral whistleblower protection legislation. It also addresses the significant issue highlighted in the Nyberg report on Ireland’s banking crisis that those expressing contrarian views risked sanctions and potential loss of employment.

The Bill which closely reflects international best practice provides a detailed and comprehensive statutory framework within which workers can raise concerns regarding possible serious wrongdoing, knowing that protections are available if they are subject to penalisation by their employer. The legislation provides a safety net. If no penalisation occurs, there need be no recourse to the legal protections. Where such protections are required, they will be available under this legislation. The Bill provides, as I have stated, a single overarching framework protecting whistleblowers in a uniform manner in all sectors of the economy. It substantially replaces the patchwork of protections in particular areas which has resulted heretofore in a fragmented, partial and incomplete standard of protection for whistleblowing.

A key feature of the legislation is the protection afforded for a disclosure made on the basis of a reasonable belief, even if it ultimately proves to be incorrect. No protection is provided for a disclosure determined to have been made without a reasonable belief, for example, for a deliberately or recklessly made false report. The Bill introduces a framework which seeks to regulate whistleblowing in the best interests of the whistleblower, his or her employer and in the public interest of having concerns of serious wrongdoing reported and investigated. It is intended that this will support and encourage disclosures being made to the person best equipped to examine and resolve the issue, for example, an employer or an appropriate public body. Whistleblowing into the public domain will, however, be facilitated under the legislation where particular conditions are met.

The Bill provides for a stepped disclosure regime in which a number of distinct disclosure channels are available, namely, internal disclosure to an employer, externally to a prescribed person, or potentially into the public domain where the circumstances are such that this may be warranted. As a consequence of the conditionalities associated with external disclosure, it is anticipated that the simplest form of disclosure – to an employer - will be availed of most frequently. The threshold for a report to an employer is set at a relatively low level in order that, most importantly, a worker can make such a report on a no-fault basis. There is a clear public interest in the making of such reports in order that any real or possible wrongdoing can be addressed and ameliorated at the earliest possible stage.

One of the main objectives of the legislation is to provide protection for workers who suffer detriment for having reported wrongdoing. The protections set out in the Bill fall into two broad categories: protection for employees from penalisation by employers and from suffering detriment as a consequence of the actions of others. In the case of penalisation by an employer, an employee will have access to the normal industrial relations machinery or, in the case of dismissal, the protections of the Unfair Dismissals Acts, regardless of length of service. In the case of the broader category of worker defined under the Bill, where a worker, including a contractor who has no employer, suffers detriment as a consequence of the actions of any person other than the employer, he or she will, among other things, have a capacity to take an action for damages in tort. Workers who make protected disclosures will also be provided with a defence against criminal proceedings, as well as a wide immunity from civil liability.

As I have highlighted, the Bill is designed to support and encourage disclosures being made to the person best equipped at the lowest level to examine and resolve the issue, namely, the employer. It is appropriate, therefore, that arrangements should be such that any wrongdoing raised by a worker with his or her employer should, as much as possible, be satisfactorily dealt with at a local level and that the issue of a worker having to seek recourse to the protections should represent the exception rather than the norm. With this in mind, the Minister for Jobs, Enterprise and Innovation, Deputy Richard Bruton, has, following a request from me, asked the Labour Relations Commission to prepare a code of conduct for employers and employees which will set out practical matters as to how a disclosure might be made and how an employer ought to handle such a disclosure upon its receipt. Work on the preparation of the code will commence in the near future and, with good will from all concerned, it is to be expected that the code will ensure that in the majority of cases where the issue of a protected disclosure arises, the matter will be resolved in a satisfactory manner without recourse to the legislation.

I am satisfied this Bill represents a significant step forward in the framework of existing protections for workers, while at the same reflecting best international practice in whistleblower protection legislation. It takes a fair, balanced and proportionate approach which will ensure Ireland’s international reputation in preventing corruption is significantly enhanced.

I would now like to turn to the specifics of the Bill and present a brief outline of its main provisions. Part 1 provides for the date of the coming into operation of the Bill, a review of the legislation after a period of five years, the interpretation of a number of terms and the standard provisions for expenses incurred. It is my intention that the legislation will be commenced immediately on its enactment. Section 1 sets out the Short Title to the Bill. Section 2 provides for a review of the legislation after a period of five years and the presentation of a report to the Oireachtas. Section 3 sets out the interpretations and definitions used in the Bill. Section 4 is a standard provision providing for expenses incurred by the Minister.

Part 2 establishes the concept of a protected disclosure, on the wrongdoing that can be reported, the persons to whom reports can be made and the details of the stepped disclosure regime. Section 5 provides that a protected disclosure is a disclosure of “relevant information”. Information is relevant information if in the reasonable belief of the worker it shows or tends to show one or more of the relevant wrongdoings. A broad range of relevant wrongdoings, the proper reporting of which will attract the protections, are set out.

Section 6 provides for the first step in the stepped disclosures regime, namely, a disclosure to an employer or another person where the matter falls within the area of responsibility of that person. A disclosure to an employer simply requires a reasonable belief on the part of the worker that it shows or tends to show one or more of the relevant wrongdoings. As this is the simplest form of disclosure to make, it is anticipated that this will be the most commonly used. We will provide clear guidelines on how it should happen.

Section 7 provides for the second step in the stepped disclosure regime, namely, an external disclosure to a person prescribed by the Minister. A statutory instrument will be required and examples of prescribed bodies could include the Health Information and Quality Authority, the Health and Safety Authority, the National Consumer Agency and the many other bodies and agencies which have responsibility for regulation. In the case of a disclosure under this section, a worker must have a reasonable belief in the substantial truth of the matters disclosed. This is a step up from the simpler reasonable belief requirement in the case of a disclosure to an employer. Section 8 provides that a disclosure by an employee of a public body may be made to the appropriate Minister with responsibility for that public body. Section 9 provides that a disclosure made in the course of obtaining legal advice from a barrister, solicitor or trade union official shall be protected.

Section 10 provides for the third step in the stepped disclosure regime, namely, an external disclosure to another body or individual such as a member of the media. If the protections are to be attracted to such a wider form of external disclosure, even stronger qualifying criteria must be met. In addition to the substantial truth requirement, the disclosure must not have been made for personal gain and at least one of the following conditions must be met: the worker must have reasonably believed he or she would be victimised if the matter had been raised either internally or with a prescribed person; there was no prescribed regulator and the worker reasonably believed the evidence was likely to be concealed or destroyed if the disclosure was made to the employer; or the concern had already been raised with the employer or a prescribed person and that the wrongdoing is of an exceptionally serious nature.

Part 3 establishes the nature of the protections. In a case of dismissal, the protections of the Unfair Dismissals Acts, without the usual exceptions and with increased compensation, will be available. In the case of a penalisation falling short of dismissal, the worker may seek access to the standard industrial relations machinery. Other important provisions in this Part provide for a right of action if a third party causes detriment to the worker or another person because a protected disclosure was made; immunity against civil proceedings; a defence against criminal prosecution; and the protection of the discloser’s identity. Section 11 amends the Unfair Dismissals Act 1997 in order that its protections will on a day one basis be available to employees dismissed for having made a protected disclosure. The compensation payable is increased to a period of five years. On considering this aspect of the Bill, I felt a new employee who saw something egregiously wrong should not have to wait for six months before enjoying the protections of the Bill.

Section 12 prohibits an employer from penalising or threatening penalties against an employee or from causing or permitting any other person to penalise or threaten penalties against an employee for having made a protected disclosure. If penalised, the worker may seek access to the standard industrial relations machinery. The compensation payable is increased to a period of five years. Section 13 provides for a right of action if a third party causes detriment either to the worker or another person because a protected disclosure was made. The term “detriment” is widely defined.

Section 14 provides immunity against civil proceedings. It amends the Defamation Act 2009 with a view to ensuring a statement made under a protected disclosure will have qualified privilege under that Act. Section 15 provides a defence to criminal prosecution for an offence related to disclosure of information. This section is necessary to overcome the many provisions relating to non-disclosure in other legislation.

Section 16 imposes a duty on persons handling protected disclosures to protect the identity of the discloser. The necessary and pragmatic exceptions to that duty are also set out. A person who suffers loss as a result of a failure to maintain confidentiality of identity may pursue an action for damages.

Part 4 sets out further conditions associated with the external disclosure of a particularly sensitive class of information relating to law enforcement, security, defence or international relations. Disclosure can continue to be made to the employer in the normal fashion, but the issue of external disclosure is covered. Section 17 sets out a number of conditions that must be satisfied in addition to those in section 10 for an external disclosure of information relating to law enforcement matters. An external disclosure of such information can only be made to a Member of Dáil Éireann or, if it contains taxpayer information, the Comptroller and Auditor General.

Section 18 sets out the conditions that apply in the case of an external disclosure of information that could adversely affect the State’s security, defence or international relations. The only external person to whom a disclosure of information may be made is the disclosure recipient whose role and functions are described in Schedule 2.

Section 19 provides for the making of regulations covering protected disclosures by members of An Garda Síochána and the securing of redress where a member has been penalised or threatened with penalties for having made a protected disclosure. While these regulations will be specific to the force, the protections available to members of the force will, I am assured, reflect the broad thrust of those available to all other workers. Section 20 provides for an amendment to the Ombudsman (Defence Forces) Act of 2004 allowing the Defence Forces Ombudsman to receive and investigate external disclosures from members of the Defence Forces.

Part 5 provides for the establishment of internal procedures by public bodies, a prohibition on protected disclosure gagging clauses in contracts and the amendment of a number of existing legislative provisions. Section 21 requires every public body to establish and maintain internal procedures for dealing with protected disclosures. Section 22 prohibits the contracting out of the protections provided under the Bill and is designed to prevent employers from preventing workers by way of gagging clauses from seeking its protections.

Schedule 1 sets out the redress provisions in respect of a penalisation falling short of a dismissal and reflects the existing standard provisions of the industrial relations dispute mechanisms. Schedule 2 establishes the office and functions of the disclosures recipient. Schedule 3 sets out amendments to a total of 16 sectoral Acts and one statutory instrument containing diverse whistleblowing-type provisions.

I am conscious that although this is a relatively short Bill, certain elements are, at first read, complex enough in nature. I have dealt with its provisions in summary here today and I am happy to expand on any of its provisions during the course of the debate. If Senators wish to raise any particular issues I will be happy to have them examined in detail. I look forward to hearing the contributions of Senators during the debate and I hope the Seanad will support the passage of what I believe is long-awaited and absolutely essential legislation.

Senator Thomas Byrne

I welcome the Minister to the House. Once again the Government, which so despises the Seanad, is using it to introduce legislation and I am glad the Minister is doing so. He has often done so. This year the Minister for Jobs, Enterprise and Innovation, Deputy Richard Bruton, introduced all of his Bills in the Seanad rather than the Dáil in the first instance.

Deputy Brendan Howlin

He clearly loves it.

Senator Thomas Byrne

He clearly does. Unfortunately the US spin doctors he employs are coming up with all types of slogans and lies from Fox News with Glenn Beck-style blackboards. He has given in for the sake of good government. It is not in Deputy Bruton's better nature to be at the type of activity he is at. He has been forced to do it by the Taoiseach as far as I can see. It is a pity the Taoiseach does not do his own dirty work in a debate on RTE.

We in Fianna Fáil welcome the legislation. We support the principles of the Bill, which represents an advance on the piecemeal sectoral approach to whistleblowing. I accept a pan-sectoral approach is needed, but it is not fair to dismiss entirely many of the improvements that have occurred in the area of whistleblowing in particular sectors in recent years. They are not the answer and are not sufficient, but quite a number of reporting obligations in general have been imposed, particularly with regard to the knowledge of tax professionals, theft and fraud legislation and children. None of this is entirely satisfactory or takes from the fact the Minister is correct in stating that an across-the-board provision is necessary at this stage. We accept this, and it is one of the recommendations of the Mahon tribunal report. The Nyberg report also mentions it. The Nyberg report was greeted with huge disappointment when it was published, particularly by the media and many in government at the time. As the Minister acknowledged last night, the Nyberg report is a wealth of information, recommendations and pointers as to where the country went wrong. It is about time the report, which was instigated by the previous Government, was acknowledged for what it is, namely, a pretty damning indictment of what went on under the previous Government and in society in general. Let us make no bones about it.

As the Minister rightly pointed out, one of the issues to which Nyberg referred was the dangers to which people holding contrary views expose themselves. On this point, I enjoyed listening to Mr. Tony Spollen on the radio yesterday. He has moved on to other things. We remember very clearly all of the whistleblowers over the years because there have been so few of them. They came before committees and to public prominence because they revealed information. In some cases, such as that of Tony Spollen, it was part of his job as an internal auditor, and such people already have professional obligations. I use the term "whistleblowing" but I am conscious it may not be the correct term. This was an issue raised at the pre-legislative hearings. It is seen as a somewhat pejorative term but it is the generally accepted term. I wish to emphasise that I do not mean to be pejorative in using it.

Nobody expects whistleblowers to jump out of every company and organisation in the land but it is to be hoped the Bill will mean that people who feel an obligation to blow the whistle will do so. Those who are willing to reveal information that it is necessary to reveal are very important. Since 2007, Transparency International Ireland has highlighted the absence of blanket safeguards and this was also highlighted by the report of the Mahon tribunal and the Nyberg report as a reason for low levels of reporting in Irish banks, the health service and public bodies. We saw the case of Louise Bayliss, who temporarily lost her job after she spoke out about the needs of female psychiatric patients. In the course of our work as Oireachtas Members many of us meet people with serious concerns about how things happen in various organisations but who conclude the meetings by stating that one cannot quote them, for very obvious reasons. There is a level of fear that their honesty and public-mindedness in bringing forward such information could get them into trouble.

What are the Minister's views on the pre-legislative scrutiny in the Oireachtas which concluded in July 2012? Did it have an impact on the drafting of the Bill? Approximately a year passed between the finalisation of the report and the publication of the Bill. It is a key part of the alleged reforms introduced by the Government. It happened with this Bill and I wonder whether it was useful to the Minister. What are the Minister's views on the time it takes committees to deal with the new procedure imposed by the Government? I am not convinced they have time. The Oireachtas Joint Committee on Finance, Public Expenditure and Reform is meeting at present and I am absent. I am sure it will be recorded in a newspaper that I was absent, but I am here. Committees already have a huge burden and I do not know whether they have the structures or resources to do the work they already have with regard to pre-legislative scrutiny. Legislative scrutiny is far better done in the Houses of the Oireachtas, particularly on Committee Stage when one goes through a Bill line by line. We are discussing the general principles of the Bill and the need for it, and I on behalf of Fianna Fáil offer full support for it, but the detailed scrutiny will be done on Committee Stage. If my understanding is correct, the Minister had his own public consultation process, after which the Oireachtas committee had another public consultation process. The process is developing and we are in its early stages, but I am concerned about whether it duplicates the Department's process and whether it has any value. The jury is out. The Government would have been wiser to see how it worked with some Bills before announcing it for all legislation. I am not sure whether it is necessary for all Bills but I am certainly willing to listen to the Minister's views on it.

We fully support the Bill. The passage of the legislation, in whatever form it takes ultimately, will send out a message that Ireland is changing and we are beginning to learn the lessons of the crisis. The Labour Party would not agree because its members called for this legislation when in opposition, but as a nation we were embarrassed into introducing the Bill because of the Mahon tribunal, the Nyberg report and all of the scandals that occurred in banking and the local authorities. I acknowledge the work done by the Minister and his colleagues. This is not to say we do not have any whistleblowing whatsoever. Numerous professionals have significant obligations to report wrongdoing and these have led to improvements in compliance, particularly with regard to the tax code.

The application across the board of protected disclosures is welcome. We support it and I wish the Minister all the best with the Bill. I look forward to a more detailed debate, section by section, on Committee Stage.

Senator Tom Sheahan

I welcome the Minister to the House. The Bill will establish a detailed and comprehensive legislative framework protecting whistleblowers in all sectors of the economy.

This Bill represents a positive step in our programme for political reform. We have tackled corruption head-on in our term in office. The legislation will provide a robust statutory framework within which workers can now raise concerns regarding potential wrongdoing that has come to their attention in the workplace, knowing that this new legislation is there to protect them.

We set out our stall before the last general election by stating we would deal with whistleblower protection and this Bill is honouring the commitment we gave in that programme for Government. The Mahon tribunal and other inquiries highlighted the need for comprehensive legislation and the Protected Disclosures Bill addresses the concerns that were raised in such inquiries. The Minister has consulted with the finance committee, Transparency Ireland and groups like IBEC and ICTU. I believe we have come up with an agreed way forward in this Bill that addresses the concerns but balances the needs of all parties.

The Bill provides for compensation of up to a maximum of five years' remuneration, which can be awarded in the case of an unfair dismissal for having made a protected disclosure. Limitations relating to the length of service that usually apply in the case of unfair dismissals are set aside in the case of protected disclosures. These measures are important. The old saying still holds true today: bad things happen when good people do nothing. This legislation will allow people to do what is right. It will allow people to speak up and will contribute to a culture where corruption and wrongdoing are seen as unacceptable. The Bill brings us into line with best practice when it comes to whistleblowing legislation throughout the world. I commend the Minister on his efforts and I welcome the Bill.

I have one query for the Minister on the code of practice, which is to commence in the near future whereas the Minister expressed the hope the Bill would commence immediately on its enactment. Will we have the code of practice in place prior to the enactment of the legislation?

Senator Katherine Zappone

I welcome the Minister to the House. I want to begin by saying how brilliant it is to have the Bill before us today and to note, like my colleague, Senator Byrne, that it is being initiated in the Seanad. I commend the Minister for putting in place a significant plank of the political reform agenda that is contained in the programme for Government, and one I very much agree with. The Minister talked about the Bill as comprehensive whistleblower protection across all sectors of the economy and as addressing a significant gap in Ireland's legal framework for combating corruption, which I believe it does.

When reviewing the Bill, I thought it a product of an exemplary process of law-making, which included the heads of Bill, the general scheme, referral to the committee, the Minister's exchange with the committee, its request for submissions and public hearings and its issuing of the report back to the Minister. I read the report while preparing for this debate and I note that the committee's report, not unlike other reports coming from the committee on pre-legislative scrutiny, identifies issues that could be addressed in the drafting of legislation. That is different from making recommendations in regard to aspects of the legislation. I sometimes wonder whether it would be better for us to have the opportunity within committee work to make recommendations as distinct from merely noting issues that need to be addressed. This would encourage a more robust analysis and a need to come to a better consensus on certain issues. That said, it was done and brought to the Minister's Department, which then conducted a regulatory impact analysis prior to the putting in place of the legislation. There is also the Minister's commitment to review the legislation after a five-year period. All of that is a terrific process of law-making which has contributed to the quality of the Bill. It is an improvement on the heads of Bill and is a signal that greater transparency and accountability is encouraged in Irish life.

Some of the improvements since the heads of Bill stage include the removal of varying degrees of evidential burden or the levels of belief placed on the whistleblower, depending on whom the disclosure is made to. The Bill still incorporates some of these but others have been removed, which is positive. As the Minister said in his speech, it is based on the general standard for the disclosure of information being that it is based on a "reasonable belief". Section 10 adds another level to this, in that the disclosure must be shown to have "substantial truth". However, there is no definition in the legislation of "reasonable belief" nor of what "substantial truth" means. Both of these phrases will be open to interpretation by the courts. Would it not make more sense to define these terms within the legislation, particularly to assist workers in understanding the legislation?

A further improvement has been made in regard to the protection of whistleblowers from the unscrupulous action of their employers following a disclosure, which is a strengthening of the position since the heads of the Bill were published. The broader definition of the worker, to which the Minister referred in his speech, is positive and allows for a range of those in employment to be covered by the legislation. However, I have some concerns about a number of general issues. Perhaps the most important one concerns the purpose of the legislation. The legislation must be a clear signal to encourage people to come forward where they have information on wrongdoing. If this is kept as an overarching principle, it will have a positive impact on the operation of the legislation. If, instead, the view is given that the State is trying to regulate, restrict or penalise whistleblowers, then it will not have that same strong effect in its operation of promoting transparency in the country.

I believe the legislation could benefit from a statement of purpose or principle. Clearly, there are a number of principles that underpin the legislation, such as the need to maintain public confidence in the institutions of the State through transparency and accountability, the primacy of the public interest over the loyalty to an employer, the need to prevent corruption and the need to promote sound corporate governance. As the Minister is aware, the courts tend to use the Long Title of the legislation as a point of analysis. From that perspective, I believe the Bill could benefit from a statement of principles or an expansion of the Long Title to clarify its purpose. This is particularly important given there is no definition of "public interest" contained in the Bill, even though it is mentioned in the Title.

I am also concerned about the level of complexity contained in the Bill, to which the Minister referred. Of course, I am aware that legislation, by its nature, is bound to be somewhat complicated. However, in the case of this Bill, it is especially important that anyone who may potentially be a whistleblower understands what he or she can and cannot do. A particularly striking example of this is the definition of what is a protected disclosure in section 5, which states: "For the purposes of this Act “protected disclosure” means, subject to subsection (6) and sections 17 and 18, a disclosure of relevant information made by a worker in accordance with section 6, 7, 8, 9 or 10."

Deputy Brendan Howlin

That is why we are drawing up a code of practice.

Senator Katherine Zappone

Perhaps that is true, and perhaps the Minister could say a little more on that. I suggest that this level of cross-referencing in the Bill makes it very complicated to understand exactly what a protective disclosure is. By contrast, the UK's Public Interest Disclosure Act amended version lists all of the necessary information in one section.

It also defines protected disclosure and the persons to whom it needs to be made in order for it to be protected. I urge the Minister to look at that when considering comparative law

Another issue I want to bring to the Minister's attention is the fact that the Bill does not contain any provisions for oversight by a State body. He will probably be aware that the Irish Human Rights Commission in its comments on the heads of the Bill recommended that consideration be given to empowering an independent mechanism, such as the Standards in Public Office Commission, to monitor complaints so as to ensure that any systemic issues, especially as complaints come forward within or across public services, are identified and to ensure that whistleblowers are not victimised. Good international practice points to the involvement of either an ombudsman or a national human rights institution as a point of reference for whistleblowers who need support in making a disclosure.

I would like the Minister to say a little more about the code of practice as I have some concerns that the legislation lacks a requirement for the creation of guidelines. We need a provision for the creation of guidelines and for an explanation of the legislation in light of its complexity. The Minister has called for a code of practice, but is there any legislative basis for that? What approach will be taken to a code of practice? It could be formulaic, but it also has the potential to be educational and to raise awareness. I have concerns in this regard. The code of practice or guidelines must ensure that workers will know transparency is encouraged, what the process for whistleblowing is and their legislative rights.

There are some other issues, but I will raise them on Committee Stage. I welcome this legislation, which provides us with a comprehensive framework for dealing with whistleblowing.

Senator Lorraine Higgins

I welcome the Protected Disclosures Bill 2013 as a very necessary and detailed legislative framework which will protect whistleblowers across all stratifications of the workforce. There is no doubt that the details within the Bill are necessary reforms to the law and that they will encourage employees to come forward with reports of suspected wrongdoing within their place of employment while at the same time shielding those employees for disclosures they believe to be in the public interest.

As the Minister and I know, this legislation very much formed a key part of Labour Party policy and our political reform agenda. We fought the last general election on a reform platform. It is great to have a Minister from the Labour Party, like Deputy Howlin, spearheading this important piece of legislative armour. While we reflect on all that has happened in our recent political and economic history, it is arguable that had this very important piece of legislation been enacted before now, we might have combated the kind of corruption we have seen within the various sectors in Ireland which ultimately led to our collapse.

The essence of this legislation is that it protects those whistleblowers who speak out against wrongdoing or cover-ups, whether in the public or private sector. The problem until now has been that when a person knows something about wrongdoing in their workplace, they are confronted with a plethora of reasons not to disclose details further, such as the prospect of isolation, or more seriously, the risk of prosecution for breaching laws relating to government secrets. Indeed, the response to the actions of Edward Snowden serves as a very public demonstration to whistleblowers as to why they should not reveal any secrets.

This legislation ameliorates this occupational hazard in that it provides a robust statutory framework that allows workers to raise concerns regarding potential wrongdoing in their place of work, safe in the knowledge that they can avail of significant employment and other protections if they are penalised by their employer or suffer any detriment for doing so. In particular, the identity of the whistleblower is protected under the Bill and the person to whom the protected disclosure was made must take all reasonable steps to ensure any information that may reveal the identity of the whistleblower is not disclosed, thus placing the onus on the confidante.

Notwithstanding this, there are circumstances where the identity of the whistleblower may be disclosed, including where the whistleblower agrees to the disclosure of their identity, as well as other defined circumstances within the Act. This framework is ostensibly pro-whistleblower and seeks to ensure that workers the length and breadth of the country are encouraged to raise any concern with his or her employer in the first instance, where she or he reasonably believes that the information being disclosed shows or tends to show wrongdoing.

Other relevant provisions in the Bill include compelling public bodies to establish procedures for handling protected disclosures, the prohibition on opt-out clauses or other clauses that preclude the application of the Bill or provide for an action for breach of contract regarding the making of a protected disclosure, as well as amendments to other pieces of primary and secondary legislation. However, it must be pointed out that while the Bill has universal application, it has no effect on existing immunities, privileges or defences. Whistleblowers can be safe in the knowledge that the legislation contained in the Bill reflects international best practice recommendations on whistleblower protections made by the G20, the OECD, the UN and the Council of Europe. It is great that we have these recommendations and that the Bill follows them to the letter.

The Minister outlined some of the key features of the Bill, but I will not go into detail on those as he has given a succinct explanation of them. However, we must be mindful that many businesses, private and public, will try to circumvent this legislation in so far as they can. No doubt, they will develop some sort of internal procedures for handling disclosures to ensure that any problems are fixed before they become public knowledge. While they may feel this is necessary and while I welcome the Minister's comments regarding a code of conduct, it is imperative the unions would disseminate a charter of rights for whistleblowers and employers so that both parties are fully apprised of the legal circumstances and the situation in the event that either party needs to avail of this legislation.

There is no doubt this legislation shows the Government is serious about accountability and integrity. At the end of the day, insiders know things about their organisation that outsiders can never find out. This Bill is a huge advancement from the previous piecemeal approach, where there was no reasonable standardised protections for whistleblowers. Indeed, compared to the previous situation where whistleblowers had no protection at all, this is an historic and meaningful step. The Bill will provide much-needed guidance to whistleblowers across all sectors in Ireland and it will do much to restore Ireland's integrity and international esteem in combating corruption.

On behalf of the Labour Party group in the Seanad, I thank the Minister for moving so quickly to bring this Bill through the Houses of the Oireachtas and implement it.

Senator Feargal Quinn

I welcome the Minister. I welcome the Bill and agree with the comments just made by Senator Higgins.

I welcome any Bill in the area of whistleblower protection. I particularly welcome the fact that workers who are victimised for whistleblowing could receive up to five years pay in compensation under new legislation. However, what goes unsaid in many whistleblower cases is that employers can come to settlements behind the scenes with employees who want to whistleblow. We are all aware also of situations where whistleblowers are blacklisted by employers. In a small country like Ireland, this is a massive issue. Indeed, I remember well the ordeal that one bank brave bank employee, the AIB auditor, Tony Spollen, had to go through in public as part of the DIRT inquiry. His integrity was attacked and he was called "childish". However, he was vindicated after much personal pain and the Revenue Commissioners eventually collected almost €1 billion.

Will the Minister elaborate on whether the Government has any figures on how State bodies have effectively gagged former employees? I would be very interested to hear the views of other Senators on this. This sort of retaliation is at the nub of the issue. How do we tackle this and how do we get people to come forward in the real world? First, to put this in context, we must remember that financial regulators all over the world failed to out wrongdoing before 2008. Thus there is a big move towards whistleblowing. We must remember that, as The Economist points out, tips are by far the leading source of fraud detection. I believe, whether we like it or not, that compensation is the core issue in regard to whistleblowing. Should we consider rewarding whistleblowers and giving them the "nudge" and confidence to report?

In the United States, the Dodd-Frank Wall Street Reform and Consumer Protection Act requires the Securities and Exchange Commission, in cases where the Government recoups more than $1 million, to award to qualifying whistleblowers no less than 10% and no more than 30% of the total monetary sanctions collected as a consequence of the information they provided. The fundamental idea behind the whistleblower reward programme in that country is to encourage whistleblowing by giving people a reason to come forward. The argument could be made that the prospect of a reward might encourage so-called gold-diggers. The experience in the United States, however, is that the Office of the Whistleblower has been receiving a manageable eight tips per day on average, most of them high-quality.

It is evident that many of those working in the financial sector were aware of the problems that existed before the crisis hit. Even in the months leading up to the collapse of Lehman Brothers, that institution's vice president, Mr. Matthew Lee, attempted a whistleblower action in regard to the firm's accounting methods. His contract was terminated just a few weeks later, in June 2008. In Ireland there have been many examples of bankers and others working in the financial sector whose careers were severely affected when they raised concerns about malpractice on the part of their employers. The reality is that these are often the only people in a position to highlight such abuses. We must do everything to protect them and to incentivise disclosure of vital information.

I do not subscribe to the view that we must have a vast financial reward scheme as part of any effective whistleblower framework. At the same time, however, it is an aspect that is worth considering. The promise of financial reward could tip the balance for potential whistleblowers who fear for their career and job. In the case of the banking collapse, a reward of some small percentage of the moneys potentially saved by the State would probably have been a fair and modest price to pay for an early warning, in the context of the €64 billion it has thus far cost to bail out those institutions. Will the Minister consider an amendment to the effect that whistleblowers would be entitled, as a consequence of the information they provided, to 5%, say, of every €1 million recouped by the Government? If the State obtained €1 million in lost revenue, for example, the whistleblower would receive €50,000. That might be sufficient incentive to give people the peace of mind and, hopefully, the subsequent financial security, to feel able to whistleblow and thus potentially save the Irish taxpayer billions of euro. We have an opportunity to put out a signal in terms of our commitment to transparency and our willingness to put our money where our mouth is when it comes to tackling this issue. Should a person like Tony Spollen, who helped the State recoup some €1 billion, have received some type of reward after all the pain he went through? I would argue that he should have.

On the issue of financial incentives, it is worth noting that the United States Internal Revenue Service agreed to pay UBS Bank whistleblower Bradley Birkenfeld $104 million for his role in exposing the giant Swiss bank's efforts - illegal in the United States but not in its home country - to help American taxpayers to hide money in offshore accounts. After the Birkenfeld case, the IRS introduced amnesty programmes allowing Americans to repatriate the contents of undeclared offshore accounts at a modest penalty rate. At least 33,000 have done so to date, netting the United States Government more than $5 billion in back taxes and penalties it might otherwise never have seen. Some people have argued that the Birkenfeld case gave people 104 million reasons to come forward. His actions have resulted in massive revenue being generated for the United States Government. Notwithstanding the immense financial strain on the economy, the introduction of a similar incentive in this jurisdiction is worthy of consideration. We might consider following the lead of the United States in providing some type of amnesty or emulating its Foreign Account Tax Compliance Act as a sort of complement to the Bill before us today. That legislation requires foreign financial institutions to identify American account holders and disclose their balances and withdrawals.

These issues should have been tackled in the whistleblowing legislation. I hope we can have a mature debate on my proposals rather than their being dismissed out of hand simply because they did not emanate from the Government side. A campaign to offer rewards to whistleblowers is under way in Britain. Will it be the case, as it so often proves, that our neighbouring country will introduce innovative legislation and we will pat ourselves on the back when we do the same ten years later? Let us not be afraid as legislators to take a lead on this issue, to show we mean business when it comes to protection for whistleblowers and empowering them to come out from the shadows. An innovative approach would have significant potential benefits for taxpayers and citizens. It is certainly worthy of consideration.

Senator Kathryn Reilly

I welcome the Minister to the House and offer my support for the legislation before us. For too long we turned a blind eye to so-called white-collar crime and corporate malpractice. A culture of impunity was pervasive, with a widely observed "do not ask, do not tell" culture. In Ireland and across the globe, corporate malpractice played a significant part in the financial crisis. The Enron scandal was merely the tip of a very large iceberg. Anybody who believed that such practices did not exist in Ireland was extremely naive. In that context, the Government's legislation on the protection of whistleblowers, new freedom of information provisions and provisions regarding the regulation of lobbying are to be welcomed, and I commend the Minister on his efforts in this area. They are important aspects of building a regulatory and enforcement regime that will help us to reduce white-collar crime and corporate malpractice into the future.

The Bill we are discussing is designed to protect workers when they disclose information and, as such, is undoubtedly a welcome initiative. There are several additional provisions we would like to see included in the Bill and we will, therefore, be bringing forward amendments on Committee Stage and in the Dáil. I am sure my colleague, Deputy Mary Lou McDonald, will elaborate further on these issues.

The first issue relates to interim relief. The British whistleblower legislation includes a provision whereby whistleblowers who are dismissed may seek interim relief whereby they keep their job until such time as the case is heard and adjudicated on. Fear of losing one's job is a major obstacle for any potential whistleblower. The Council of Europe resolution in this regard states:

Relevant legislation should afford bona fide whistle-blowers reliable protection against any form of retaliation through an enforcement mechanism to investigate the whistle-blower's complaint and seek corrective action from the employer, including interim relief pending a full hearing and appropriate financial compensation if the effects of the retaliatory measures cannot reasonably be undone.

The Irish Congress of Trade Unions is seeking an amendment to the Bill to make provision for injunctive relief to be granted to prevent the unfair dismissal of employees following their making of a protected disclosure in accordance with the legislation. The purpose of interim relief provisions is to ensure, in the public interest, that employees are free from retaliations when making protected disclosures. The Planning and Development Act 2000 helped to point the way in this regard by way of its provision for relief in respect of a planning injunction.

Another concern we have relates to resourcing, enforcement and review. The positive intentions of this Bill will only be realised if sufficient resources are made available to those charged with upholding the law. A recent draft research paper by Dr. Elaine Byrne, entitled Ireland's White-Collar Crime Oversight Agencies - Fit for Purpose?, noted that 289 cases of illegality were identified in regard to the largest tax evasion scheme in Irish history but not one person was prosecuted. The Competition Authority has secured 33 convictions against companies and individuals, but the yield has been low and nobody was sent to jail. The Office of the Director of Corporate Enforcement, ODCE, is yet to secure a prosecution for insider trading or market abuse since its establishment in 2001. Transparency International, in its national integrity study, noted that full analysis of trends is impeded by an absence of clear and consolidated statistics on investigations or prosecutions for corruption-related offences by law enforcement agencies and the various regulatory bodies. For instance, the ODCE's statistics on convictions under the Companies Act are at odds with those supplied by the Central Statistics Office, which takes its data mostly from the Garda Síochána's record management system.

As I said, the whistleblower legislation, the new freedom of information provisions and the Bill on lobbying are all progressive initiatives which herald a new era of accountability and transparency. However, without the necessary resources to ensure enforcement, supports and training and, critically, the collation of data, they might not do what they say on the tin.

In terms of the regulatory impact assessment, I am worried it did not identify the need for some limited potential Exchequer costs or compliance costs. If the legislation is to do its job properly, there will be costs. However, these can be limited by working closely with not-for-profit organisations such as Transparency International. Sinn Féin will support the legislation but will table amendments on Committee Stage to strengthen it. We look forward to working with the Minister on this legislation.

Minister for Public Expenditure and Reform (Deputy Brendan Howlin)

I thank all Senators for their contributions and for the warm welcome the Bill has received across all sections of the House. That is what I expected. We have talked about consequences of our economic collapse in great detail but it was multidimensional and was more than an economic collapse. It was a failure of politics and of administration and we need to change the culture, which is a much more difficult thing to do than to change legislation. In order to change the culture, one must change the framework within which people operate and that means legislative change. We have a suite of legislative measures designed to inculcate a sense that the norm is to out the wrongdoer. I am very much taken by the comments of Senator Zappone on the purpose of the Bill. It is not simply to facilitate whistleblowing, to use the phrase that Senator Byrne had difficulty using because it is a loaded phrase, but to encourage that to be the norm.

I strongly agree with the comments of Senator Byrne on the Nyberg report. People did not read the Nyberg report in detail as well as they might because of the visceral view that we must point the finger at someone. Understanding the background to what happened is important if we are to put in place a framework that prevents what happened, on the adverse side of things, recurring.

The Senator asked a specific question about the pre-legislative scrutiny and the work of committees, which was taken up by Senator Zappone. I have long been an advocate of a different way of legislating. I will not have too many allies here but I believe in a single Chamber Parliament, having considered it carefully and approaching the issue with an open mind. However, this must be an effective single Chamber and should not be a conveyor belt for legislation. It should open itself to external inputs, which was the original idea of the Seanad. The idea was to have external influences of a specialist variety from the panels of expertise deemed to be the norm in the 1930s, such as labour, education and cultural panels. The items of legislation in the suite of legislative changes being introduced on the reform side will go through an extensive pre-legislative consultation.

With regard to this Bill, we had an extensive external dialogue and submissions from the Irish Congress of Trade Unions, IBEC and civic society. The committee had its own views and held hearings and invited submissions. I found the committee's report to be of great value. It is instanced in some of the commentary that there was a migration of thought on a range of issues from the original heads of the Bill to the finished product. We migrated into the original proposals the idea of good faith reporting. People might ask why it is not in the Bill now but we looked deeper and got the advice of people. It is actually an impediment to reporting because people can report wrongdoing with bad motivation. The Shipman report in Britain was cognisant of that. Impugning the motives of the whistleblower could destroy the whistleblowing. That was one of the myriad issues that changed during the thought process that we opened to external views.

I am not suggesting for a second that it is perfect legislation. There is no such animal and all legislation is subject to further modification and refinement but the Bill must also slot into the Irish situation. We cannot take an off-the-shelf view of the UK, Australian, South African or New Zealand legislation, which are exemplars, and slot them in. We must take cognisance of our situation.

Senator Sheahan spoke about a code of practice and its timing. I do not expect this to fly through the Oireachtas. There will be a process in this House and then in the other House. It is envisaged that the code of practice, which is important, will be in place at that time. There is always a dichotomy between saying whether the ordinary citizen can read legislation. Very few try to and we need the citizen's guide to it and the code of practice will function as that.

This is a firm delivery of a programme for Government commitment. Senator Zappone referred to the complexity of the Bill, which I acknowledge, but it needs to be legally robust as it will be interpreted and challenged in the courts. That is why there is unavoidable complexity at times. I do not accept, subject to listening to the argument, that we need oversight of oversight and providing a role for the Ombudsman or the Irish Human Rights Commission to oversee the overseer. If HIQA is the mechanism to which someone whistleblows about something going on in a State-funded nursery, do we need to have someone to monitor the monitors? Perhaps we need a reporting regime. We do not want to have evermore reporting mechanisms to deliver more reports. We need practicality in these matters.

I welcome the kind comments of Senator Higgins with regard to the history and evolution of these proposals but we are now where we want to be. The idea of an overarching single comprehensive item of legislation, affecting both private and public sectors, is important. Senator Higgins raised an interesting point about the trade union charter. It is not a bad idea and I will raise it with ICTU. Perhaps IBEC will do the same with its members. It should signal to union members and workers that this is important, that these are their rights and that the union will provide help with it.

Senator Quinn raised a number of issues. It is very hard to provide in legislation for a regime whereby, if I raise the matter with an employer, the employer offers a little bung if I shut up. How do we deal with that? It is a difficult question. There is no log of State employees who have been gagged. It is not a matter that is reported and it is not something we can have a charter about, but I am sure it happens. Senator Quinn posits his solution, which is a reward system. I am a little uncomfortable with this. Motivation should be the best motivation although I have already said that people may be motivated by the wrong issue. I can provide a concrete example. In the Morris tribunal concerning Garda corruption in Donegal, one of the whistleblowers was in a family dispute. Very important information came into the public domain because of a family dispute. We can impugn the motive but the information, which was shocking, would not have come to light if the person had not been motivated, for good or ill, to put it into the public sphere. I am a little nervous about the notion of rewards per se.

Senator Reilly welcomed the Bill and proffered her party support, which I welcome. She underscored the issue of white-collar crime and I agree it is important. We are looking at new legislation to deal with white-collar crime specifically. It is an area we have not handled very well as a society. We put less focus on it than we do on ordinary decent criminals. We have been egregiously damaged by white-collar criminals.

Many of them have not felt touched by the law forces of the State. I hope that is changing and will change because we certainly need it to change.

We looked at the issue of interim relief. It is contained in the UK legislation, but its labour regulatory bodies are judicial bodies, whereas ours are not because under the Constitution, the courts are the only bodies which can stand as a court. It is not readily applicable, but we have not given up on looking at the prospect of providing some mechanism in this regard. This issue will be considered during the passage of the Bill.

I thank all Senators for their contributions and look forward to detailed interaction with them. I am completely open to good suggestions from wherever they come.

Question put and agreed to.

Committee Stage ordered for Tuesday, 1 October 2013.

Sitting suspended at 3.10 p.m. and resumed at 5 p.m.