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What is the Protected Disclosures (Amendment) Act 2022?
On 1 January 2023, The Protected Disclosures (Amendment) Act 2022 was introduced: it implements EU Whistleblowing Directive and amends the original Protected Disclosures Act 2014. It widens the scope of protections for whistleblowers and mandates extra rigour for whistleblowing policy.
Why was the act introduced?
Minister for Public Expenditure and Reform, Michael McGrath, stated that the act was introduced to:
- Substantially overhaul the legal framework for the protection of whistleblowers.
- Gives greater certainty to workers who report wrongdoing that the information they disclose will be properly followed-up on.
- Strengthen the protections for workers who suffer penalisation for raising a concern about wrongdoing in the workplace.
The Act requires public and private sector employers to establish and offer formal whistleblowing channels to employees. It also establishes the new Office of the Protected Disclosures Commissioner.
Which companies will it affect?
From January 1 2023, certain employers will have to make sure their whistleblowing system complies with the amended regulation.
These are:
- Employers subject to EU law listed in Schedule II of the Amendment Act
- public sector employers.
- employers with at least 250 employees
Organizations with between 50 and 249 employees have until December 17, 2023 to get compliant.
What does the Act mandate?
Firms must:
- Establish a secure and confidential reporting channel – offering both oral and written means of disclosure.
- Designate an impartial and competent party, responsible for the communication process with anyone making a protected disclosure.
- Ensure workers are aware of the whistleblowing avenues available to them to make protected disclosures.
Broadening definitions in the Amendment Act:
The 2022 amendment sought to widen definitions of particular terms in the act, increasing the scope of its protections.
Worker – this now includes:
- members of the board of directors
- shareholders of relevant firms
- unpaid interns and trainees
- individuals make a disclosure regarding a relevant wrongdoing during a recruitment process or pre-contractual negotiations.
Relevant wrongdoing – scope has been increased to now include breaches of financial service legislation, including:
- Undertakings for Collective Investment in Transferable Securities Directive
- Alternative Investment Fund Managers Regulations
- MiFID Directive
- Packaged Retail and Insurance-Based Investment Products Regulation
- Market Abuse Regulation and the Benchmarks Regulation.
Penalisation – the Act seeks to protect workers further, broadening what is defined as penalisation against those who make disclosures:
- Withholding a promotion from a worker
- Ostracism
- Negative performance reviews or employment references
- Failure to make permanent a temporary employment contract
- Harming a worker’s reputation or blacklisting within an industry or sector
New Offences
The 2022 Act creates new offences, including:
- the failure to establish, maintain and operate reporting channels and procedures;
- the hindrance of a worker in making a report;
- breaching confidentiality regarding the identity of a person making a protected disclosure
Sanctions for these offences include fines ranging between €75,000 – €250,000 and/or imprisonment of up to 2 years.
A conviction of a body corporate can result in imprisonment for an offending director, manager, secretary or other officer for up to 2 years. Conversely, it is now an offence for a worker to make a protected disclosure containing information which they know to be false.
Does the Act offer compensation to workers?
Workers who feel as though they have been penalised, in any way now relevantly defined by the act, may apply for interim relief from the Circuit Court. This significantly widens the threat of litigation for employers. Under the 2022 Act, the burden of proof for cases of alleged unfair penalisation is reversed. If a worker claims they have been penalised due to a disclosure they have made, or intention to do so, it will be for employers to demonstrate that the allegedly penalising acts were based on justified grounds.
Get Compliant
Implement an independent whistleblowing hotline – protecting whistleblowers begins at the point of making a report. The act demands that relevant parties are able to make disclosures confidentially.
Safecall, as an independent whistleblowing service providers, ensures employees have a secure avenue to report wrongdoing.
Ensure your procedures are impartial – the regulation now insists that firms utilise an ‘impartial and competent’ party to facilitate the whistleblowing process. Case management and investigation services, offered by specialised external providers, ensure competence and impartiality.
If investigations are to be handled internally, training for managers is essential. Whistleblowing is a unique situation. Whistleblowing reporting managers who have not received training can feel overwhelmed or out of their depth when a whistleblowing case arises. Arranging training sessions for your workers, created bespoke for your business, can help avoid the fallout of non-compliance with the new regulatory measures.
Train employees; raise awareness – The act states that workers must be aware of their employer’s whistleblowing policy. They must know how to make a disclosure. Educating your workers on your whistleblowing policy and their rights in making a disclosure helps to develop a culture of openness, transparency, and integrity.
Whistleblowing training for employees is necessary to prevent and mitigate wrongdoing in the workplace, and for regulatory compliance.
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