UK: Don’t Forget About Whistleblowing …

Last Updated: 27 January 2009
Article by Andrew McConnell and Robert Davies

Whistleblowing claims have been on the increase over the last couple of years. Perhaps recent high profile stories of employees 'blowing the whistle' have acted as a catalyst. Consider for instance, the former Marks & Spencer employee, allegedly dismissed after disclosing plans to alter the company's redundancy scheme because of concerns over age discrimination and length of service. According to press reports the employee contacted the media after a lack of confidence in the response he received from his line manager and works council. It is by no means clear that the employee's approach satisfied the requirements to qualify for a protected disclosure – see below – but it illustrates that internal disputes may quickly escalate and create unwelcome coverage for employees. Prevention is better than cure.

To illustrate the wide ranging concerns where employees and workers have blown the whistle, recently an employee of a recycling company was unfairly dismissed after making a disclosure to his local council alleging that his employer was in fact burying pulped paper, contrary to their operational obligations to dispose of it in a more environmentally friendly manner.

Taking a step back and looking at the bigger picture, whistleblowing is expected to be more topical at a time when economic and environmental concerns in particular are starting to bite. See, for example, the Serious Fraud Office's initiative in late 2008 to encourage whistleblowing where high value financial fraud is suspected.

In addition, the myriad of stories reported over the last couple of years concerning failures to follow basic data protection processes have also focussed the public's attention. How many stories have been reported about confidential documentation containing personal data being left on trains? The situation has become so topical that there is even a website called www.whistleblower.co.uk which is devoted to assisting individuals sell confidential stories to the media.

Employment law does, of course, provide protections for those employees (and, in many instances, workers) who suffer a detriment because they have made a 'protected disclosure' (i.e. they have blown the whistle on their employer). Yet the idea behind the legislation was to encourage employees to raise the issue with their own employer rather than the media. It was supposed to be the exception rather than the rule that an employee would contact the press rather than their own employer. So why does it seem to be happening more often?

One reason may be that employers have taken their eye off the ball with their own internal whistleblowing procedures. Whistleblowing helplines may have compounded the problem. Designed to aid confidentiality, if the relationship is not managed appropriately, using external providers can also result in a lack of accountability. The legislation which implemented the protection, (the Public Interest Disclosure Act 1998, "the Act") has been in force now for more than 10 years. For employers, failing to take this issue seriously can lead to further reprisals, as employees point to previous failings as justification for by-passing the internal disclosure route and heading straight for the media.

The good news for employers is that proactive action and training can mitigate these risks. In this article we remind you of the key legal issues and a checklist of issues to consider.

Whistleblowing – The Consequences

Before considering the technical issues it's worth a reminder of why it's so important to avoid defending a whistleblowing claim.

  • Unlike a claim for unfair dismissal there is no requirement for the employee to have one year's service in order to bring a claim;
  • The dismissal of an employee on the grounds that he has 'blown the whistle' is automatically unfair;
  • An employee may be eligible for uncapped compensation (the current unfair dismissal compensation cap being Ł63,000), subject to mitigation and actual loss being incurred; and
  • Reputationally, whistleblowing claims can be very damaging. The media seem to relish the idea that there may be a corporate conspiracy or cover up.

How Does The Law Protect Whistleblowers?

The detriments that whistleblowers commonly suffer include ostracising and bullying by employers and disgruntled colleagues. The Act protects employees against suffering detriment and/or from being dismissed as a result of whistleblowing.

What Is A 'Protected' Disclosure?

To benefit from protection under the Act the disclosure must be a "protected disclosure". For a disclosure to satisfy this test the employee must reasonably believe that the information they have in their possession shows that one of the following has occurred, occurring or is likely to occur:

  • a criminal offence;
  • a failure to comply with any legal obligation;
  • a miscarriage of justice;
  • the endangerment of the health and safety of any individual;
  • damage to the environment;
  • the deliberate concealing of information about any of the above.

The disclosure must be made in good faith. Depending upon the party to whom a disclosure is made the Act also imposes further hurdles which need to be satisfied before a disclosure can qualify as being protected.

As I have already mentioned, in the majority of cases employees will raise the issue with their employer. Provided the employee makes such a disclosure and makes it in good faith, then it will be protected.

Media Whistle Blowing

Understandably, where an employee makes a disclosure to the press the requirements that need to be satisfied for it to qualify as a protected disclosure are much more onerous. As well as showing that he honestly and reasonably believed that the information he disclosed was substantially true and he acted in good faith in making the disclosure, the employee must show he:

  • did not act for personal gain;
  • had previously raised the matter with his employer or the relevant regulator; and
  • reasonably believed that if he had made the disclosure to his employer he would be subjected to a detriment, or he has already made substantially the same disclosure to the employer.

This allows employers in the majority of circumstances the chance to address concerns raised by employees in the first instance – it protects employers from having to deal with inappropriate disclosure of information where they have not had the ability to respond to the situation.

Otherwise, it would be far too simple for employees to use the media as a weapon. This also accords with the general duty of employees to keep the information held by them about their employers confidential. It should only be in exceptional circumstances that such information can be made public/reported to third parties without the employer's consent.

The Act also allows disclosure to a 'prescribed person' – namely certain regulatory bodies such as the HSE and the Environment Agency. Importantly, unlike disclosures to the media, there is no obligation for the employee to have made prior disclosure of the information to his employer. This highlights the importance of employers creating an atmosphere which encourages employees to raise concerns internally rather than doing so to an external body.

Scope Of What Qualifies As A 'Protected Disclosure' Is Broader Than One Might Think...

When you first consider what would constitute whistleblowing you may think of some John Grisham-esque Hollywood blockbuster where an employee of a large multinational company blows the whistle on unsafe environmental practices. However, the scope of what can qualify as a protected disclosure is wider than many employers would consider at first blush.

The Employment Appeal Tribunal has found that an employer's failure to comply with a legal obligation includes a breach of the employee's own employment contract. Therefore, if an employee reasonably believes that his employer has breached his employment contract and informs his employer of this in good faith, then a dismissal for this reason may fall under the scope of the Act. This decision significantly enhances the scope of protected disclosures.

So What Can An Employer Do To Protect Themselves Against Whistleblowing Claims?

  • A clear and thorough whistleblowing policy is essential and its existence should be communicated to employees and workers.
  • Employers should ensure that any existing policy covers the following key points:-

    1. the protection that the individual has if he raises an allegation in good faith;
    2. the importance that the employer attaches to identifying and addressing malpractice;
    3. the steps that the employer will take when investigating the disclosure;
    4. that malicious allegations/failure to follow the employer's whistleblowing procedures may result in disciplinary action against the employee making the disclosure.

  • It is important that the whistleblowing policy is consistently applied. Consistent application can be important if an employee makes a disclosure to the media in the belief that if he raised it with his employer he would suffer a detriment. If an employer can point to consistent implementation of its whistleblowing policy this should be persuasive in arguing that it was not reasonable for an employee to believe that he would be subject to a detriment if he made the disclosure to his employer (i.e. the disclosure does not qualify as being 'protected').
  • A whistleblowing policy will be most effective if it is part of an overall strategy which is reflected in a range of policies including bullying and harassment policies.
  • A whistleblowing policy is more likely to be effective if an employer can create a culture in which employees feel comfortable bringing issues to the manager's attention. It is important that senior managers are committed to achieving this because this will encourage employees to make disclosures within the company rather than to a third party. Senior managers should therefore be trained on the policy and procedure.
  • Handle contractual disagreements sensibly and with due procedure.
  • Consider providing updates to the workforce – perhaps in Company Annual Reports or via internal communications – of the use of the whistleblowing policy within the workforce, where confidentiality permits. Even if confined to the number of times the policy was invoked without being able to describe outcomes this supports the position that an employer is prepared to listen and act accordingly, which creates the opportunity to deal with complaints and claims from a more persuasive position.

Andrew McConnell
Dundas & Wilson LLP
andrew.mcconnell@dundas-wilson.com

Robert Davies
Dundas & Wilson LLP
robert.davies@dundas-wilson.com

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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