UK: The Public Interest Disclosure Act 1998 comes into force

Last Updated: 21 July 1999

There is implied into every contract of employment a duty of fidelity owed by the employee to his employer. That duty includes keeping the employer’s affairs confidential. Most contracts of employment reinforce this duty expressly. However, there are situations when an employee comes into possession of information concerning wrongdoing by his employer, which he considers should be reported. An employee ‘spilling the beans’ on his employer risks summary dismissal for breach of confidence. The Public Interest Disclosure Act 1998 ("the Act"), which comes into force on 2 July 1999, gives workers specific protection against dismissal, with no limit on the compensation which may be awarded.

What does the Act do?

The Act amends the existing Employment Rights Act 1996 by inserting provisions protecting workers who make certain disclosures in relation to the business of their employers. It forms part of the Government’s series of measures aimed at strengthening the individual’s employment rights, which includes the minimum wage legislation, fairness at work proposals and the Working Time Regulations. The new Act seeks to encourage resolution of workplace issues and disputes by set procedures, while also protecting those who raise concerns about certain alleged malpractices at work, characterised as ‘qualifying disclosures’, in the public interest. Under the Act, those who "blow the whistle" on illegal or unsafe workplace practices (provided the disclosure fulfils the requirements of the Act) have less fear of victimisation and discrimination at their place of work as a result of making those disclosures. Workers who suffer detrimental treatment for making such a disclosure can complain to an Employment Tribunal and may receive compensation. Dismissals and redundancies as a consequence of making a protected disclosure are automatically unfair.

The Act extends to all ‘workers’, which has a wider scope than ‘employees’ and includes former employees, agency contract staff, self-employed workers, those on work experience or fulfilling training contracts and those on vocational or work schemes. It also covers employees in the public sector, including NHS practitioners, dentists, opticians and pharmacists. However, it does not include those in the police force, Security Service, the Secret Intelligence Service or GCHQ, ("the excluded employees"), nor those who ordinarily work outside Great Britain.

Which disclosures are protected?

The Act applies where a worker has made a "qualifying disclosure" in accordance with procedures laid down in the Act. A disclosure of information is not a qualifying disclosure if the person making the disclosure commits an offence by making it.

Qualifying disclosures are those which tend to show one or more of the following:

  • that a criminal offence has been, is being or is likely to be committed
  • that a person has failed, is failing or is likely to fail to comply with a legal obligation
  • that a miscarriage of justice has occurred, is occurring or is likely to occur
  • that the health or safety of any individual has been, is being or is likely to be endangered
  • that the environment has been, is being or is likely to be damaged
  • that information concerning any of the activities above has been, is being or is likely to be deliberately concealed.

Criminal offences

This may be the reporting by one worker of the criminal behaviour of another, or the disclosure of criminal activity carried out by the employer itself, such as anti-competitive practices or breaches of insider dealing rules, to the appropriate official body or the police.

Compliance with Legal Obligations

Legal obligations may be imposed by statute, such as intellectual property or employment laws. They may possibly also include contractual obligations where these can by enforced at law, although this is not specifically mentioned in the Act.

Miscarriages of justice

This may relate to a wide variety of acts by fellow workers or the employer itself.

Health and Safety

There is a wealth of health and safety legislation governing the running of businesses. Disclosures concerning, for example, the failure to provide or wear protective clothing where required or unhygenic food preparation areas would be protected under this category.

Damage to the Environment

This category is potentially very large. While, for example, reports concerning the illegal dumping of waste in a river would obviously be protected under this (and other) heads, the Act does not specify that the activity damaging the environment must be a breach of regulations or legislation. It is possible therefore that disclosures of perfectly legal, albeit highly damaging, activities could be protected under this head.

Concealing information

Disclosure of the deliberate concealing of any of these matters is protected under this head.

When is a qualifying disclosure protected?

In order for a qualifying disclosure to be protected, it should first be made by the worker to his employer or the person nominated by the employer to receive such information. To be protected a disclosure to an employer must be made in good faith. In some cases qualifying disclosures can be made to persons or bodies prescribed by the Secretary of State. For example, disclosures in relation to corporation tax, national insurance contributions and statutory maternity and sick pay can be made to the Commissioners of the Inland Revenue.

Although the worker should usually first make the disclosure to his employer, he will be protected if he does not provided that he reasonably believes he will be subjected to a detriment or that evidence will be concealed or destroyed.

Disclosures to persons other than to an employer must be made in good faith and on the basis that the worker reasonably believes that the information is substantially true, does not make the disclosure for purposes of personal gain and that in all the circumstances of the case it is reasonable for him to make the disclosure.

In determining whether it is reasonable, regard shall be had to the identity of the person to whom the disclosure is made, the seriousness of the relevant failure, whether the relevant failure is likely to recur in the future and, if disclosure has been made first to the employer, whether the worker complied with any procedure laid down by the employer in making the disclosure.

Separate protection is afforded by the Act for those making disclosures of an exceptionally serious nature, although what may constitute an "exceptionally serious" disclosure is not specified.

The fact that certain information may be confidential does not stop it being disclosed where it falls within one of the categories of qualifying disclosures. Any confidentiality provision in an employment contract or elsewhere is void insofar as it purports to prevent the worker from making a qualifying disclosure.

What protection does the Act provide?

The protection afforded to workers comes in the form of a 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".

‘Detriment’ may include demotion, failing to promote, failing to give a pay rise or other unfair or detrimental treatment. A worker who considers he has suffered a detriment attributable to his making a protected disclosure may complain to an Employment Tribunal. Compensation may be payable, although the provisions in the Act dealing with compensation merely provide a power for the Secretary of State to make regulations relating to such compensation in the future. No such regulations have yet been made and the redress for detrimental treatment is therefore unclear. Compensation will not, however, exceed that which would have been payable had the employee been dismissed for the same reason.

A separate remedy is provided for dismissal on the grounds of making a protected disclosure, which is now automatically deemed unfair. The usual requirement for one year’s employment before a claim for unfair dismissal can be brought does not apply. The limit for compensation for unfair dismissal (currently £12,000 but likely to be increased to £50,000 in late 1999) does not apply to dismissal on the grounds of making a protected disclosure.

What implications does the Act have for employers?

It is not possible to contract out of these provisions and therefore the implications of the new legislation for employers are considerable. Employers should ensure there is a proper procedure in place for reporting illegal or unsafe activities within the workplace, with designated personnel being responsible for handling any disclosures made. Employers may wish to be seen to encourage disclosures, inserting a specific reference in the contract of employment promoting the aims of the Act.


The Act is designed to protect the public interest and therefore reference to "Whistleblowers" is probably to be avoided.

The Act seeks to provide a framework within which workers can inform on illegal, unsafe and improper practices by their employers or fellow employees without the fear of detriment. Although promoted as an Act to protect the individual’s employment rights, it may also be seen by some employees as an opportunity to make adverse and derogatory comments about their employers. Objections to an employer’s moral attitude or political agenda will not in themselves be protected. The ‘reasonableness’ provisions will go some way to ensure that Tribunals are not taken in by disgruntled workers with merely an axe to grind and employers retain the right to dismiss for gross misconduct such as damaging the business or disclosing trade secrets provided that the disclosure does not qualify for protection.

Employers should take care to be seen to be fair in the action they take when faced with an employee prepared to ‘blow the whistle’. It may therefore be advisable for employers to consider undertaking some or all of the following actions:

  • reviewing contracts of employment and ensuring the removal of any term attempting to prohibit disclosures which would be protected under the Act;
  • inserting a specific reference to the Act in contracts of employment, thereby encouraging workers to inform their employers if they have reasonable grounds for making a protected disclosure;
  • considering, and if necessary amending, any current reporting systems and disciplinary procedures which may be in existence. The procedures should detail a person to whom concerns regarding workplace practices should be made. They could be inserted into the contract of employment, or a staff handbook. An internal procedure could be an effective means of identifying problems at an early stage;
  • ensuring that any disclosures made are dealt with in an appropriate manner. This will include a procedure for ascertaining whether or not a disclosure is ‘protected’ under the Act;
  • ensuring that workers do not suffer detriment or adverse treatment as a result of making a protected disclosure. The financial consequences to an employer of the new legislation for failing to heed the provisions of the Act, let alone the damage to his reputation, could be considerable.

This note is intended to provide general information about some recent and anticipated developments which may be of interest. It is not intended to be comprehensive nor to provide any specific legal advice and should not be acted or relied upon as doing so. Professional advice appropriate to the specific situation should always be obtained. If you would like further information or specific advice, please contact one of the following partners, Tony Thompson or Seán Lavin, or any other member of the Employment Group.

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