UK: An Overhaul For Whistle-Blowing Law

Last Updated: 15 May 2013
Article by Andrew Yule

'Whistle-blower: it's emotive language - it conjures an image of taking a stand, exposing unseen fraud, corruption, abuse or neglect. Brave; perhaps reckless; sometimes unpopular; but almost always with little or no regard for personal repercussions. This is consistent with the dictionary definition – 'a person who informs on a person or organization engaged in an illicit activity'.

The current law

Interestingly, employment legislation makes no reference to 'whistle-blowing'. Rather, it protects workers (including employees) who disclose information, usually to their employer, which in the reasonable belief of the worker tends to show that one of the following has occurred or is likely to occur:

  • a criminal offence; a failure to comply with a legal obligation; a miscarriage of justice; the endangerment of the health or safety of any individual; or environmental damage; or
  • that information tending to show any of the above has been, is being or is likely to be deliberately concealed.

This is known as a protected disclosure. Workers who have made protected disclosures have the following protections, for which compensation is uncapped:

  • if the whole or the principal reason for a worker's dismissal is that they made a protected disclosure, the dismissal will be automatically unfair; and
  • a worker has the right not to be subjected to any detriment by any act, or any deliberate failure to act, by his employer done on the ground that the worker has made a protected disclosure.

There is no requirement that the worker act selflessly in making a disclosure. There is also no requirement that the worker is right in their belief - they must merely show that the belief was reasonably held. So a worker will gain the same protection, whether they are exposing large-scale fraud, corruption, abuse or neglect; or whether they are simply disclosing information that they believe tends to show an unlawful practice, even on a very small scale and even if they, themselves are the victim; and in either event, even if it turns out that there has, in fact, been no wrongdoing.

As the law stands, the only overriding qualification is that the protected disclosure must have been made 'in good faith'. But this is a fairly nebulous concept; it is quite a leap for an Employment Tribunal to determine that an employee, in seeking to expose something they believe to be wrong, has not acted in good faith.

So, in the employment context, it's fair to say that the law is written not to protect solely 'whistle-blowers' in the classic sense (see the description above) but also to protect workers from reprisals for making themselves heard, whenever they believe something to be wrong.

The major difficulty for those pursuing whistle-blower claims has been causation.

  • Even once a worker has identified that they have made a protected disclosure it is never easy to persuade a Tribunal that this was the whole or principal reason for their dismissal.
  • The test for a detriment claim is less onerous – the employee must only persuade the Tribunal that the protected disclosure materially influences (in the sense of being more than a trivial influence) the employer's treatment of them. But they must show that the detrimental act was done by his employer (not simply an employee of his employer) and this can also be a stumbling block.

Changes to the law

Nonetheless, the government took the view during 2012 that the current formulation was perhaps, open to abuse. Claims have succeeded where the protected disclosure was merely a complaint that an employer had breached a term of the employee's own contract of employment. We were told that this was a 'loophole' and was not the purpose for which the legislation was intended - so, we were promised a change. But will the changes in fact make it harder to bring a successful claim?

The changes are included in the Enterprise and Regulatory Reform Act, which received Royal Assent on 25 April. The changes will be in three main areas and the first two will come into effect on 25 June 2013:

  1. The definition of a protected disclosure will change, with the addition of a few, key words - the disclosure must be 'made in the public interest'. The intention seems to be to exclude the purely self-interested disclosure (for example, a statement by an employee that they believe that their employer has acted in a way that is breach of their own contract of employment). However, it's likely that the threshold for the new public interest test will be the worker's 'reasonable belief'. Time will tell how this is interpreted in practice, but it is not hard to think of ways in which an employee may justify their reasonable belief that an apparently self-interested disclosure is in fact in the public interest, for example; 'I was taking steps to protect my co-workers from similar, unlawful treatment'.
  2. The Government initially planned to drop the requirement for 'good faith'. This was surprising, as it would seem to go against the grain of the purpose of the first change – that is, to move closer to the essence of public interest and altruistic 'whistle-blowing'. However, a compromise looks likely: there will no longer be a requirement of 'good faith', but the Tribunal will have the discretion to reduce compensation by up to 25% where it appears that the disclosure was not made in good faith.
  3. Probably the most significant change is that the scope of protection will be widened so that an employer will become vicariously liable for an act of their employee, if the employee acts in a way that is detrimental to a colleague who has made a protected disclosure – so long as the detrimental conduct is done by the employee in the course of employment. But recent case law has established that the threshold is not high for establishing what is in the course of employment, when seeking to establish vicarious liability. So, this is a significant change and is a departure from the direction of recent case law in respect of causation in the context of whistle-blowing detriment claims. And it potentially opens a whole new area for successful claims, as inevitably it is harder for employers to police the actions of individual employees, when dealing with whistle-blowing colleagues.

Practical implications

Employers should think carefully about how to plan for these changes, particularly the extension of vicarious liability:

  • when considering any formal or informal complaint, employers should think carefully about whether there may be any public interest element;
  • one option may be to adjust policies to require employees making disclosures, or any other grievances, to explain if they believe there to be any public interest element;
  • employers should think carefully about how to train and raise awareness amongst staff. Managers should be made aware of how to spot protected disclosures and handle them appropriately and the potential repercussions of not doing so for themselves and for the wider business.
  • employers will also need to give thought as to how to engender a different attitude to whistle-blowing amongst all their staff. Introducing a new policy or offering generic training may not be enough to bring about the kind of cultural change that some organisations will need. Policies will need to be updated nonetheless – it should become a disciplinary matter to harass or otherwise subject a colleague to a detriment for making a protected disclosure (if it is not already).

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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