Whistleblowing, the lawfor Bristol CIPD – 16 June 2015

Rupert Scrase & Martin AugustusScrase Employment Solicitors

Whistleblowing, the law

• Introduction – Rupert Scrase

• Whistleblowing, legal background– Rupert Scrase

• Whistleblowing, practical steps – Martin Augustus

Scrase Employment Solicitors

Training from experienceIn house company training

Practical straightforward adviceEmployment Law Advice through

fixed rate for projects, eg. updating handbookshourly rate, orEmployment Law Advice Agreement (ELAA)

ELAA

• Key benefits of annual ELAA are:

Employment law advice on phone, email or in personPreparation and representation in Employment

TribunalDrafting of settlement agreementsChecking of employment related documentation

Legal background

• Whistleblowing protection is in the Public Interest Disclosure Act 1998 (PIDA)

• PIDA came into force in 1999 following various disasters such as Zeebrugge and Piper Alpha where staff had concerns but were too scared to raise them

• PIDA inserted new sections 43A-43L and 103A into the Employment Rights Act 1996

Legal background

• Law protects ‘workers’ – This is a wider definition than ‘employees’– Includes:• Homeworkers• Non-employees undergoing training or work

experience• Self-employed doctors and other professionals in the

NHS• Agency workers

Legal background• There are two key protections for workers who

make a ‘protected disclosure’:– Any dismissal will be automatically unfair if the

reason is that they have made a ‘protected disclosure’

– Workers must not be subject to a detriment for making a ‘protected disclosure’

• There is no financial cap on compensation and no requirement for a minimum period of service

Legal background

Legal background

• A whistleblower must first make a ‘qualifying disclosure’:– The subject matter of the disclosure must be:• Criminal offences• Breach of any legal obligation• Miscarriages of justice• Danger to H & S of any individual• Damage to the environment• Deliberate concealing of information about any of the

above

Legal background

• Qualifying disclosure (continued)– The worker must have a reasonable belief that

the information shows one of the failures and that the disclosure is in the public interest

Legal background

• What is a disclosure?– The disclosure does not have to be made through

a whistleblowing policy– It can be made either orally or in writing– It might be in a grievance letter or solicitor’s letter– To be a disclosure, it must ‘convey facts’– NB. An email to a line manager may be a

‘disclosure’ even if HR are entirely unaware of it

Legal background

• Reasonable belief– The disclosure does not have to be found

ultimately to be true– It would be a qualifying disclosure if a worker

reasonably but mistakenly believed malpractice had occurred

– The worker must reasonably believe it is in the public interest

Legal background

Protected disclosure

Responsible person

Wider disclosure Legal adviser

Exceptionally serious cases

Employer

Prescribed person

Government Ministers

Legal background

• A protected disclosure is made to:– The worker’s employer– A ‘responsible person’ but only if the worker

reasonably believes that the malpractice relates to:• a person who is not their employer (e.g. a customer of

the employer), or • Any other matter for which a person other than the

employer has legal responsibility

– A legal adviser

Legal background

• A protected disclosure is made to (continued):– Government ministers (broadly, if worker is

employed in the public sector)– Prescribed persons • There is a statutory list which includes organisations like

the Information Commissioner, H&S Executive and MPs• Prior disclosure to the employer is not required• Only protected if worker reasonably believes the

default falls within remit of prescribed person and the allegations are substantially true

Legal background

• A protected disclosure is made to (continued):– Wider Disclosure - other third parties (e.g. the

media ) but only if the worker reasonably believes the allegations are substantially true and is not acting for personal gain and • the worker must have previously disclosed the

information to their employer, or• reasonably believes that they will be subject to a

detriment if they make the disclosure to a prescribed person, or

• That the employer will conceal or destroy evidence

Legal background

• A protected disclosure is made to (continued):– Exceptionally seriously cases • There is no need for a worker to have raised the matter

internally• The worker must not make the disclosure for purposes

of personal gain• In all the circumstances of the case, it must have been

reasonable for the worker to make the disclosure having regard to the person it is made

Legal background

• Whether an employee acting reasonably in making wider disclosure (to third parties) will depend a number of factors including: – The person the disclosure was made to – e.g. it is

more reasonable to disclose to the police than the media

– The seriousness of the matter– Whether the employee has complied with the

employer’s whistleblowing procedure

Legal background

• ‘Gagging’ clauses– S.43J ERA states: “ Any provision in any agreement

to which this section applies is void in so far as it purports to preclude the worker from making a protected disclosure…”

– This means an employer can’t stop an employee blowing the whistle to a regulator (if it is a protected disclosure) but they can settle any employment claims through a settlement agreement

Legal background

• Detriment– Workers have a right not to be subjected to any detriment

on the ground that they have made a protected disclosure– Examples of detriment include threats, disciplinary action,

loss of work or pay or damage to career– A former worker can be subjected to a detriment – e.g. by

providing a bad reference– Employer can be vicariously liable for detriment caused by

employees and workers– Workers who victimise whistleblower colleagues may be

personally liable

Legal background

• Dismissal– The employee will be automatically unfairly

dismissed if they can show that the reason, or principal reason they were dismissed was because they made a protected disclosure

– The employee needs to establish a causal link between the whistleblowing and subsequent dismissal

Legal background

• Remedy– Unlimited damages– Injury to feelings cannot be awarded in dismissal

claims but can be in detriment claims up to the point of dismissal

– Highest reported award is £3.8m, average award is £113,667

Whistleblowing

• Regulators– If an employee brings a Tribunal claim against an

employer, the ET1 form asks them if they would like a copy of the ET1 to be passed to the relevant regulator

– The relevant regulator may then investigate the employer which is entirely separate to the tribunal claim

Whistleblowing, practical steps

Practical Steps

• Widespread recognition during the 1980s and 1990s that many organisations (public and private) had a culture which discouraged the reporting of wrongdoing– Whistleblowers were ignored or their careers

were damaged

Practical Steps

• However, PIDA was only meant to be part of the solution. It imposes no obligation on employers to encourage whistleblowing or to implement a whistleblowing policy

• Government hoped to foster:

Practical Steps

“a climate of openness and transparency in which individuals in the workplace do not feel that they will be victimised if they draw attention to wrongdoing”

- Hansard 1999PIDA was not a substitute for

“cultures that actively encourage the challenge of inappropriate behaviours”

- Committee on Standards in Public Life 2005

Practical steps

• Negative publicity– Employer of choice– Relationships with customers– Relationships with suppliers– Relationships with investors

• Disruption• Legal fees!

Whistleblowing policy• Compliance and internal control – means that

problems are addressed early and avoids serious damage or reputational loss

• Avoids external disclosures – less likely that an employee will feel that they have to blow the whistle externally

• Minimising litigation risk – less likely that an employee will be dismissed of suffer determent

Whistleblowing policy

• Avoiding criminal liability for bribery – The Bribery Act 2010 created a strict liability corporate criminal offence where an organisation fails to prevent bribery by a person “associated” with it. Defence is that the company had in place adequate procedures to prevent bribery

Whistleblowing policy• Public bodies – government expects written

policies, part of annual audit process• Listed companies – UK corporate governance

code requires UK business to have whistleblowing arrangements, or explain why not

• US Companies – and subsidiaries required under Sarbanes-Oxley Act (SOX) to have whistleblowing arrangements

Whistleblowing policy

• Convey seriousness• Encourage employee to raise concerns

internally• Remind employee of the standards of

behaviour• Ensure employee know who they can

approach

Whistleblowing policy

• Outline investigation procedures and how procedures might link with other procedures such as a grievance procedure

• Make it clear that victimisation of whistleblowers is not permissible

Whistleblowing

Business ethics

Health & Safety

Regulatory codesDisciplinary rules/ procedure

Confidentiality

EqualityEmployment contract

Grievance procedure

Who should handle disclosures

• Advisable to appoint named individuals• Possibly outside of direct line management,

such as HR• Could be a nominated “Whistleblowing

Officer”• Access to board director• Telephone hotline in larger organisations

Application of policy

• Should the policy apply to others who fall outside of the definition of “workers” within PIDA– Self-employed workers outside of the NHS– Volunteers– Contractors and sub-contractors

What to cover

• Should the policy be limited to the six areas making the disclosure a “qualifying disclosure”

• Strong argument that employers should encourage other disclosures– Unethical behavour– Breaches of professional conduct which fall short

of being unlawful

Encouraging early disclosure

• May be unhelpful to require employees to hold a reasonable belief before making a disclosure– May feel that they need to gather evidence– May feel that they need to protect their own

position– “reasonable suspicion” may be better wording

Dame Janet Smith’s report on the Shipman enquiry

Protecting Whistleblowers

• Provide guidance and support– External counselling such as an EAP– Provide access to training individuals who can

offer guidance and support– Public Concern at Work – provide a confidential

independent helpline for whistleblowers

Protecting Whistleblowers

• Anonymous disclosures– Openness should be encouraged however some

employees may lack confidence to come forward– Can cause problems in identifying whether the

disclosure had been made in good faith (however remember that this is no longer a legal requirement)

– EU working party on Data Protection discouraged anonymous disclosure as the norm

Handling disclosures

• Right to be accompanied– The formal right to be accompanied may not arise

in every incidence where an employee raises an issue under a whistleblowing procedure,

– However, employees are more likely to feel more confident about making the disclosure if they are allowed a companion

Handling disclosures

• Investigation– Investigate promptly– Investigation by someone who is not directly

involved or may be a witness– May need to use staff with relevant specialist skills

or knowledge

Handling disclosures

• Complaint:– May be well founded – requiring further

investigation and action– Raised in good faith but unfounded– Unfounded and raised maliciously

Providing feedback

• Reporting back will assure complainants that their concerns are being taken seriously

• Less likely to escalate the matter or take it to an external regulator or the press

• PCaW recommends dealing with malpractice openly so that staff are aware of the problems and can be confident in the procedure

Appeal

• There needs to be an internal mechanism to allow a dissatisfied employee to escalate their concerns to a senior employee– Should have the authority to be able to act

independently and not be afraid to overturn previous decision

– Should not have previously been involved in the matter or its investigation

Training

• Make sure that everyone is aware of whistleblowing. Employees and other workers should receive training on the companies policy and procedures– Can break vicarious liability in detriment cases

BIS Guidance

• The Department for Business Innovation and Skills published updated guidance for Employers, including a code of practice in March 2015

• https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/415175/bis-15-200-whistleblowing-guidance-for-employers-and-code-of-practice.pdf

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on 30 June 2015

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Scrase Law Limited t/a Scrase Employment Solicitors. Whilst every effort has been made to ensure the accuracy of these notes, the information contained within them is not comprehensive and does not constitute ‘advice’. You should not take action

without first seeking professional advice.