Record €323,000 WRC Award Highlights the Serious Risks of Whistleblower Penalisation
A recent Workplace Relations Commission (WRC) decision has highlighted the significant consequences for employers where an employee is found to have been penalised after making protected disclosures.
The Waterford Intellectual Disability Association (WIDA) has been directed to pay €323,240 in compensation to senior manager Fiona O'Neill following findings that she was penalised in what the WRC described as a “most egregious manner” over a prolonged period.
The award is reported to be more than three times the previous highest award made by the WRC under the Protected Disclosures legislation.
The case provides an important reminder for employers that protected disclosures must be treated seriously and handled through an appropriate, independent and fair process.
Firstly, what is a protected disclosure?
A protected disclosure is a disclosure made by a worker where they reasonably believe that information tends to show one or more relevant wrongdoings, as provided for under the Protected Disclosures Act 2014, as amended.
The legislation provides protection to workers who raise concerns about wrongdoing in the workplace.
Importantly, the legislation is designed to protect workers from penalisation because they have made a protected disclosure.
Penalisation can take a number of forms and is not limited to dismissal.
Depending on the circumstances, it may include actions such as:
- Suspension.
- Demotion.
- Reduction in pay or working conditions.
- Unfavourable changes to duties.
- Disciplinary action.
- Intimidation or harassment.
- Unfair treatment.
- Other adverse treatment connected with the protected disclosure.
This is particularly important for managers because an employee does not necessarily have to be dismissed for a serious protected disclosures claim to arise.
What happened?
Fiona O'Neill was a senior manager at WIDA and was described in the proceedings as the company's “de facto CEO”, having been its Director of Services and the most senior manager in place at the time.
The dispute arose following concerns she raised about the conduct of the company’s then Chairman, including allegations of bullying and harassment.
In early 2022, Ms O'Neill notified the board of her concerns and asked that they be treated as a protected disclosure under the Protected Disclosures Act.
An external HR consultant was subsequently engaged to conduct a company review.
However, concerns were raised about the scope and independence of that process. According to the complainant's case, the review expanded beyond the original issues and resulted in recommendations which included the creation of a new CEO position, effectively removing Ms O'Neill from the position she had previously held.
Further concerns were subsequently raised regarding invoices associated with the external consultant. Ms O'Neill raised concerns about the procurement of services and subsequently made disclosures to the HSE, the Charities Regulator and the National Office for Protected Disclosures.
The dispute continued over a significant period and ultimately resulted in proceedings before the WRC.
What did the WRC find?
The WRC found that WIDA had penalised Ms O'Neill following her protected disclosures.
Adjudication Officer Gaye Cunningham found that the penalisation occurred in a “most egregious manner throughout a long period” and that the company was fully aware of the protected disclosures.
The WRC awarded €323,240 in compensation.
Importantly, the remedy went beyond financial compensation.
The WRC also directed WIDA to:
- Quash two reports produced as part of the company review.
- Cease the position of interim CEO and any moves to appoint one.
- Acknowledge Ms O'Neill as the organisation's de facto CEO.
- Provide a full and unequivocal apology for the treatment she had received.
The case is therefore significant not only because of the size of the award, but because of the extent of the additional directions made by the WRC.
Why is this case important for employers?
One of the key lessons from this case is that the way an employer responds to a protected disclosure can be just as important as the original issue being raised.
An employee may raise a concern that turns out to be unfounded. That does not mean the employer can treat the employee negatively because they raised it.
The employer should instead follow an appropriate process to assess the disclosure and determine what action, if any, is required.
Where concerns about an employee subsequently arise, employers should be particularly careful to ensure that those concerns are dealt with independently and are not influenced by the fact that the employee previously made a protected disclosure.
Protected disclosures and performance management
This is an area where employers need to exercise particular care.
For example, an employee makes a protected disclosure and, shortly afterwards, concerns arise about their performance.
The employer may have entirely legitimate reasons for wanting to address those concerns.
However, if the employee subsequently alleges that the performance management process was penalising, the employer may need to demonstrate that the process was genuinely based on performance and was not connected to the protected disclosure.
Employers should therefore ensure that:
- Performance concerns are documented when they arise.
- The concerns are supported by objective evidence.
- The employee is aware of the concerns.
- The employee is given an opportunity to respond.
- Normal performance management procedures are followed.
- The person managing the performance process is sufficiently independent.
- The timing of the process is considered carefully.
- The employer can clearly distinguish between the protected disclosure and unrelated performance issues.
The importance of independent investigations
The case also highlights the importance of having an appropriate investigation process.
Where an employee makes a protected disclosure about a Senior Manager, Director or Board Member, the investigation should be sufficiently independent to provide confidence that the matter is being dealt with objectively.
Employers should carefully consider:
- Who should investigate the disclosure.
- Whether there is any actual or perceived conflict of interest.
- Whether an external investigator is appropriate.
- What the terms of reference should be.
- Who should receive the investigation report.
- Whether the investigator has the appropriate expertise.
- Whether the scope of the investigation changes and, if so, whether this is properly documented.
An investigation should not become a mechanism for examining the conduct or performance of the employee who made the disclosure simply because their concerns are inconvenient or challenging for the company.
Don't confuse the disclosure with the person making it
One of the most important practical lessons for managers is to separate the content of the disclosure from the employee who made it.
An employee who raises a protected disclosure may subsequently be difficult to manage.
There may also be genuine concerns about their conduct, performance or working relationships.
However, those matters should be addressed on their own merits.
The fact that an employee has made a protected disclosure should not influence how an employer approaches unrelated employment matters.
Where possible, employers should ensure there is a clear audit trail demonstrating why a particular decision was made and who made it.
What should employers do when a protected disclosure is made?
Employers should have a clear procedure for dealing with protected disclosures and ensure that managers know how to recognise when a concern may fall within the legislation.
Once a potential protected disclosure is received, employers should consider:
1. Acknowledge the disclosure
The employee should know that their concern has been received and is being considered appropriately.
2. Assess the disclosure
The employer should establish whether the matter falls within the Protected Disclosures legislation and determine the appropriate next steps.
3. Consider conflicts of interest
Anyone involved in investigating or deciding the matter should be sufficiently independent.
4. Maintain confidentiality
Information relating to a protected disclosure should be handled appropriately and shared only where necessary and permitted.
5. Keep the process separate from other HR matters
If the employee is subject to performance, disciplinary or other HR processes, employers should carefully consider whether these matters should be managed separately.
6. Document decisions
Employers should maintain appropriate records of how the disclosure was handled and the reasons for significant decisions.
7. Monitor for potential penalisation
Employers should remain alert to whether the employee could reasonably perceive subsequent actions as retaliation for having raised the concern.
A protected disclosure does not prevent an employer from managing an employee
It is important that employers do not interpret the legislation as meaning that an employee who makes a protected disclosure cannot subsequently be subject to normal management processes. That is not the case.
An employee who makes a protected disclosure remains subject to the normal requirements of their employment.
However, employers need to be able to demonstrate that any subsequent management action is being taken for legitimate reasons and is not connected to the protected disclosure.
This distinction is critical.
What can employers learn from the €323,240 award?
The size of this award should serve as a significant reminder to employers about the financial and reputational risks associated with poor handling of protected disclosures.
However, the biggest lesson is not simply that whistleblower claims can result in large compensation awards.
The case demonstrates the importance of having robust processes in place before a protected disclosure is ever made.
Employers should not be developing their approach to whistleblowing for the first time when a serious concern lands on a manager's desk.
Employers should take the opportunity to review their existing protected disclosures arrangements.
In particular, consider:
- Is your Protected Disclosures Policy up to date?
- Do employees know how and where to raise a concern?
- Are managers trained to recognise a potential protected disclosure?
- Is there a clearly identified person responsible for handling disclosures?
- Is that person sufficiently independent?
- Do you have a process for dealing with allegations involving senior management or board members?
- Are employees protected against penalisation after raising a concern?
- Are performance and disciplinary processes kept separate from the protected disclosure process where appropriate?
- Are investigations properly documented?
- Are decision makers aware of the potential risks associated with subsequent adverse treatment?
- Does your organisation periodically review its protected disclosures procedures?
A final reminder for employers
The record €323,240 award in this case demonstrates that protected disclosures should never be treated as simply an HR complaint or an employee relations issue.
Employers need to take concerns seriously, follow the appropriate process and ensure that employees are not disadvantaged because they have raised a protected disclosure.
A well designed policy is important, but it is equally important that managers understand how to apply it in practice.
How MSS The HR People can help
MSS The HR People can support employers with all aspects of protected disclosures and whistleblowing procedures, including:
- Reviewing and updating Protected Disclosures Policies.
- Advising on the appropriate handling of protected disclosures.
- Supporting employers with the investigation processes.
- Advising on the appointment of independent investigators.
- Providing guidance to managers dealing with protected disclosures.
- Training for managers on how to recognise and handle protected disclosures.
- Reviewing performance and disciplinary processes where a protected disclosure has been made.
- Supporting employers in managing potential penalisation risks.
- Providing practical HR advice to ensure procedures are fair, consistent and appropriately documented.
The recent WRC decision is a timely reminder that protected disclosures require careful handling from the moment a concern is raised.
For support with protected disclosures, investigations or any other HR matter, don’t hesitate to contact MSS The HR People at info@mssthehrpeople.ie or call 0)1 887 0690.
