On 1 January 2017 the Financial Services Rule Book 2016 (the
"Rule Book") comes into operation. With this will be the
requirement on all Isle of Man licence holders to establish,
implement and maintain an effective whistleblowing policy to
encourage the reporting of any improper or unlawful behaviour.
Protected Disclosures in Employment
Under Part IV of the Employment Act 2006 ("EA 2006"),
employees and workers are given a number of rights and protections
if they decide to 'blow the whistle'. This means that
employees and workers who raise legitimate concerns about
malpractice in accordance with the EA 2006 and who, as a result,
find themselves subject to detriment from their employer can claim
compensation for unfair dismissal. Compensation claimed in these
circumstances can exceed the statutory limit of £56,000.
It has long been advisable for employers to have in place a
whistleblowing policy setting out procedures by which staff can
confidentially report concerns about illegal, unethical or
otherwise unacceptable conduct. With the changes to the Rule Book
this will no longer be a matter of best practice, but a positive
obligation for businesses within the regulated sector.
Preparing an Effective Whistleblowing Policy
There is no one size fits all whistleblowing policy; policies
will vary depending on the size and nature of the organisation.
With this in mind, a business would be well advised to consider the
following points when introducing or updating its whistleblowing
Employers should review any existing
policies and procedures to determine if (and to what extent) any
required standards of conduct have already been made clear to the
workforce and identify the systems in place for handling matters
when things go wrong and whether the same remain fit for
A whistleblowing policy should be
non-contractual in nature; it should also "stand alone"
and should not be confused or integrated with any grievance
There is no point having a policy in
place if staff do not know about it or feel able to make a
disclosure internally and thus blow the whistle to someone other
than the employer, i.e. the media. Communicating commitment from
the top will assist with "buy in".
A precedent policy is but a useful
starting point. Whilst there is no requirement for businesses to
consult with staff on the arrangements to be adopted, to do so can
raise awareness generally as to the importance of an internal
whistleblowing policy and provide valuable insight which can be
incorporated into the draft, to include:
Identifying the risks within the
Factors which might deter employees
from raising whistleblowing concerns; and
The role of management under the
Who should handle disclosures? The
most practical starting point is to encourage staff to raise
concerns with their line manager; however an alternative must also
Training should be provided to all
staff on how disclosures should be raised and how they will be
acted upon. Additional training should be provided to those with
whistleblowing responsibilities, such as key managers and the board
so that they can determine the appropriate action to take upon a
disclosure being made.
Does your organisational culture
encourage whistleblowing as a safe alternative to silence? If not,
consider why. The whistleblowing policy should set out the legal
protection available to whistle-blowers, with the company affirming
that any detriment towards an individual who raises a disclosure
will not be tolerated (and tie this into the company disciplinary
Likewise, the policy should make it
clear that malicious false allegations will be grounds for
disciplinary action. Ensuring the policy is properly drafted will
avoid abuse of the process or dilution of the policy itself.
Review and update the policy on a
regular basis to ensure it continues to meet the needs of the
business and any regulatory requirements. Staff re-training should
be conducted from time to time to help encourage adherence to the
policy and best practice.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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