by Anne Lyne December-11-2018 in Commercial & Business, Corporate, Employment Law, Regulatory & Administrative Law

Following the banking crisis it was decided by Government that more robust legislation was needed to assist Gardaí with tackling “white-collar crime”. As a result, there are now specific mandatory reporting obligations for “white-collar crimes”. These obligations are on both employers, employees and indeed any person who holds information in relation to a suspected “white collar crime”. A recent decision of the High Court has however raised the issue of the constitutionality of this reporting obligation.

Section 19(1) of the Criminal Justice Act, 2011 (the “2011 Act”) makes it an offence for a person to withhold information which he or she knows, or believes, might be of material assistance in: (a) the prevention of certain crimes by another person; or (b) securing the apprehension, prosecution or conviction of any other person for the commission of such crimes.

The Act only focuses on “white-collar crimes” but there are a wide range of offences of which one should be aware. These include offences in relation to financial activities, company law, theft, fraud, and corruption. This could include petty cash disappearing or, an employee being aware of “cooking” of the company accounts. 

Once aware of the crime, a report must be made to An Garda Síochána “as soon as practicable”. Section 19 does provide an “out” for a person who fails to disclose information, in cases where one has a “reasonable excuse” for doing so. This is not defined in the Act. Employees should know that reporting their suspicions of “white-collar crime” offences internally, to their Line Manager for instance, will not relieve them of the obligation under the Act. The penalty for a person found guilty of withholding information is an unlimited fine or up to five years imprisonment.  Therefore this section is of significance for employers, as well as individuals. A recent decision has called the section into question, however.


Latest Developments

In Sweeney –v- Ireland [2017 IEHC 702], Mr Sweeney was questioned by An Garda Síochána as part of an investigation in relation to a suspected murder. Mr Sweeney was originally considered a suspect. During the interview process, Mr Sweeney exercised his right to silence. Whilst he was not charged with murder, he was charged under Section 9(1)(b) of the 1998 Act, with the offence of failing to disclose information.

Section 9(1) of the Offences Against the State (Amendment) Act, 1998 (the “1998 Act”), is an almost identical provision to the 2011 Act. In fact, this is the provision upon which Section 19 of the Act was based, so that decision is of direct relevance to section 19.

Mr Sweeney challenged the constitutionality of Section 9(1)(b) in the High Court, claiming that the offence under this section amounted to a breach of his constitutional right to silence and was also impermissibly vague and uncertain.

Ms Justice Baker held that the offence of failing to disclose information is an interference with the constitutional right to silence. Whilst acknowledging the fact that the right to silence is not an absolute right, Ms Justice Baker was of the opinion that any interference with the right must come with statutory protections. No such protections exist in respect of Section 9(1)(b) of the 1998 Act. For example, there is no obligation on An Garda Síochána to inform a person being questioned, that a failure to provide information constitutes an offence. Ms Justice Baker held that this creates a dilemma, whereby a person is to be told of the right to remain silent but not told that, by exercising that right, they may be committing an offence. The Court also held that Section 9(1)(b) was impermissibly vague and uncertain.


What’s next for mandatory reporting and “white-collar crime”?

In February 2018, the State was granted leave to appeal the decision of Ms Justice Baker to the Supreme Court. There will be more certainty in relation to status of the provisions of both Acts following the hearing of the matter in the Supreme Court which should take place next year.

For now the legislation remains in place and although an employee is not obliged to notify the employer before going to the Gardai, we would strongly recommend to employers having a clear whistleblowing policy around the reporting of any crimes in the workplace and clear guidance given to employees. It should be made clear that they will not be penalized for raising a concern where they have a genuine belief of wrongdoing. It is important that an employer seeks advice at the earliest possible stage if a report is made to them.   An employer should also consider what external reporting requirements arise to ensure the business takes such steps to protect itself and the reputational damage that may arise.

For further information, please contact Anne Lyne at Hayes solicitors.

This article appears as a guest editorial in the Irish Employment Law Journal, December 2018.


Back to Full News