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Whistleblowing: a guide for employers

Whistleblowing claims can result in significant reputational damage and uncapped compensation if a worker has suffered a detriment or is dismissed after they have blown the whistle on your company. So, what is whistleblowing and how can you best protect your business from claims?

What is whistleblowing and what are protected disclosures?

The UK Whistleblowing Commission defines whistleblowing as ‘the raising of a concern, either within the workplace or externally, about a danger, risk, malpractice or wrongdoing which affects others’. If an employee wishes to whistleblow, they will need to make a ‘protected disclosure’ of the complaint to a ‘prescribed person’. There is a list pre-approved prescribed people, including HMRC, the Health and Safety Executive, the Office of Fair Trading, the Charity Commission, Members of Parliament, and many industry regulators. You can see the full list here.

To be a ‘protected disclosure’ and qualify for protection under whistleblowing legislation, a disclosure should be in the public interest, and the employee must have a reasonable belief that this is the case at the time they raise it. The worker must have a reasonable belief the information is true and concerns a matter within that person's remit. There is no need to tell the employer first, although this would usually be encouraged as the first step and where the employer has an effective whistleblowing policy and the whistleblower does not raise it first with it, the failure to follow the internal procedure means the disclosure is less likely to be protected.

The disclosure should show past, present or likely future wrongdoing falling into one or more of the following categories:

  • Endangering someone’s health and safety;
  • Damage to the environment;
  • Failure to comply with a legal obligation;
  • Criminal offences (such as fraud);
  • Miscarriages of justice; and
  • Covering up wrongdoing of any of the above.

What legal protections do whistleblowers have?

The main protections for whistleblowers were introduced in 1999 when the Public Interest Disclosure Act (PIDA) came into force.  This legislation allows employees to breach their implied duty of confidentiality to their employer if a matter is a public issue and the protections fall under one of the two categories below:

  • dismissal of an employee or employee shareholder will be automatically unfair if the reason, or principal reason, for their dismissal is that they have made a ‘protected disclosure’ and so they can bring a claim for unfair dismissal; and
  • workers (being a wider group of your staff, not just employees and employee shareholders) are unable to bring unfair dismissal claims but in addition to employees or employee shareholders, other workers are protected from being subjected to any detriment because they have made a protected disclosure.

As there is no financial cap on compensation in whistleblowing claims and no minimum period of service, this makes whistleblowing claims attractive to employees and particularly risky for employers. If you are confident that you have complied with the law and have dealt with any complaint as swiftly and effectively as possible, the risk to your business will be minimised.

Is it a legal requirement to have a whistleblowing policy?

Unlike the requirement to, for example, have a written grievance policy, there is not yet a legal requirement to have a whistleblowing policy, but there are many advantages to your business in having a clear and comprehensive whistleblowing policy in place and this may become a requirement in the future.

Why should I have a whistleblowing policy?

As well as the failure to follow the internal procedure within in an effective policy meaning the disclosure is less likely to be protected (see above), a whistleblowing policy can assist in providing you with the best early warning that there are important issues in your business, which need to be resolved.

If drafted effectively, a whistleblowing policy will enable a clear pathway to be followed so that information about the issues being complained of can reach those in the business who have the power to address and potentially resolve the complaint at an early stage and reduce the risk of anonymous damaging statements being made to the media.

Having a whistleblowing policy is also an effective signal to employees and other stakeholders that a business is run ethically, takes its obligations seriously and helps demonstrate that other legislation such as the Bribery Act and Modern Slavery Act are being complied with. Having a policy setting out the consequences of wrongdoing and creating an awareness of this, should also act as a deterrent for the organisation, so that wrongdoing is less likely.

If internal procedures are sufficient, any issues can be resolved at an early stage and your business, stakeholders, your employees and your reputation will be better protected. A comprehensive and precisely drafted whistleblowing policy is highly advisable. If you would like to talk to an employment lawyer about drafting or updating a whistleblowing policy, we would be happy to assist you.

What should I include in a whistleblowing policy?

This will be dependent on your industry and in areas like financial services if you are regulated by the PRA or the FCA regulators' rules on whistleblowing will apply and listed companies will be subject to specific requirements based on the recommendations of the UK Corporate Governance Code. However, as a minimum it is helpful to include the following in your whistleblowing policy:

  • A clear definition of what whistleblowing is and examples of the type of act which might qualify and how this differs to a grievance and information about how to bring a grievance, if this is the more appropriate forum;
  • How a disclosure can be made, to whom and what the process will be after that. For example, will the employee receive feedback and likely timescales for action can also be helpful. The process must be consistent and fair for all disclosures and so the policy will need to be realistic to reflect the different cases which might arise;
  • Training commitments for all workers so that they are aware of what whistleblowing is and how protected disclosures can be made / should be dealt with in your business;
  • How you will handle confidentiality and if a worker wishes to whistleblow anonymously you may want to cover the issues that arise from this and how they could receive feedback, perhaps through a telephone appointment or by using an anonymised email address;
  • A clear communication that victimisation of a whistleblower is not acceptable and that any instances of victimisation will be taken seriously and managed in line with your business’ disciplinary procedure;
  • Make clear that the whistleblower does not need to provide evidence, just sufficient detail for the employer to look into the complaint; and
  • Provide information and contact details in order that workers can find out more information about their protection when whistleblowing and providing a specific contact to ask further questions, can also be helpful.  For a more bespoke and detailed whistleblowing policy for your business, our specialist employment solicitors can help.

How should I deal with a whistleblowing disclosure?

It’s important to be able to clearly distinguish and to be able to explain to your employees the difference between whistleblowing and an employee grievance. If you are unsure, seek early professional advice from an employment expert as you will need to deal with these in difference ways.

If your business receives a genuine ‘protected disclosure’ time is of the essence in investigating and containing the issue in question. It is critical that the employee knows that you are taking their concerns seriously and dealing with this promptly. You will need to ensure that you are complying with your business’ whistleblowing policy at all times.

An informal and confidential discussion with a direct manager is usually a recommended first step and then that manager should have the confidence and experience, through having previously dealt with employee complaints or by regular whistleblowing training, to know whether it is a matter they can deal with, or whether it will need escalation and who they should escalate that matter to. The worker who has made the disclosure should leave that meeting believing that the matter is in capable hands and will be resolved as quickly as possible. It is advisable to provide the employee with a copy of any notes made as part of an informal meeting or later formal investigation, if required and to allow the employee to be accompanied at these meetings by a colleague or Trade Union Representative. The employee should be reassured that what they share will be thoroughly investigated and will not affect their prospects at work.

An employee may ask to remain anonymous when whistleblowing. Whilst you are not required to protect the confidentiality of a whistleblower, a worker may have good reasons for requesting this. If more trust in the procedure and your investigation will be built up by keeping a whistleblowing worker anonymous when requested, this may help employees come forward with information more readily than if they distrust the way in which the whistleblowing process is managed. Information is more likely to be more valuable and followed up more easily if workers at least provide contact details and so you should try to ensure that you at least have an ongoing method of communicating, for this purpose. As well as explaining this to a whistleblowing worker, you may also want to make clear that making a disclosure anonymously means it can be more difficult to carry out a proper investigation and its less likely for them to qualify for protections as a whistleblower.

As a general note, it can be helpful for you to make a centralised record of the number and type of whistleblowing disclosures you receive, when the concern was raised and the feedback provided to whistleblower, in order that you can review areas of your business and your whistleblowing procedure at regular intervals and make any required improvements. Once a concern has been dealt with, you may look to receive feedback from the whistleblower as to how they perceived the process and to gauge what improvements they would make.

Whistleblowing outside of the business

The aim of having an open culture and a well drafted and promoted whistleblowing policy is that workers will ideally feel able to make a disclosure to you directly before disclosing anything that has happened in the workplace, externally.

However, there are some instances where employees are not compelled to make a protected disclosure to their employer or another protected person first. Wider disclosure may be deemed to be reasonable in some circumstances where workers feel unable to share the disclosure with the business. A worker might choose to approach the media with their concerns, although if they choose this route, they are in most cases likely to lose their whistleblowing rights for being motivated by self-interest rather than public interest.

Where they wish to make a wider disclosure, workers must reasonably believe that what they are saying is true and not make the disclosure just for personal gain. Unless the wrongdoing is something the worker has already reported to you in broadly the same terms, or the concern is exceptionally serious and the worker reasonably believe that you will subject them to ‘detriment’ or conceal or destroy evidence if they make the disclosure to you or another prescribed person first, the worker should be reasonable in their actions and not generally disclose elsewhere as a first step. There are a few exceptions to this rule and if you require further guidance in your business’ particular situation, please do seek specific advice from one of our employment law solicitors.

What should I do to best protect my business from whistleblowing claims?

The best way you can protect your business from damaging whistleblowing claims, aside from abiding by all laws and procedures as required, is to take measures to make your business open, transparent and a safe environment for workers to feel able to share their concerns with higher management, without fear of reprisal. You will also want to be as well prepared to deal with whistleblowing if it does take place. Here are some useful things you could introduce to protect your business:

  • Consult informally with workers regularly so that they are able to share their concerns promptly and without judgment. If managers have better information to make decisions and control risk this may mean changes can be made to avoid wrongdoings from taking place;
  • Have an effective whistleblowing policy or appropriate written procedures in place and update frequently;
  • Ensure the whistleblowing policy is easily accessible to all workers and workers are aware of where to find it and are recirculated frequently;
  • Provide training to all workers on how disclosures should be raised and how they will be acted upon and train managers on how to deal with disclosures and ensure refresher training is provided;
  • Make clear that whistleblowing is supported and encouraged within your business and make it easy to do;
  • Confirm that any clauses in settlement agreements do not prevent workers from making disclosures in the public interest;
  • Make clear who can be approached by workers that want to raise a disclosure. Where possible, alternative contacts should be offered;
  • Reassure workers that no detriment will be suffered because they choose to make a disclosure and that any disclosure will be dealt with fairly and consistently and confidentially unless the worker has given explicit consent to share their name or this is required by law or for the investigation to be properly carried out;
  • You may consider offering the worker access to mentoring, advice and counselling during the whistleblowing process and a direct contact if they have any further concerns or questions as the investigation progresses; and
  • Aim to advise the worker from the outset that their concerns will be investigated, they will receive feedback on their concerns and the likely timings for any actions or next steps. It is important that workers feel listened to and taken seriously when they blow the whistle.

Summary

If handled poorly, a whistleblowing incident can damage the reputation of your business. Having clear guidelines and processes in place allows you confidently respond to an employee allegation.

We strongly recommend that all businesses have a whistleblowing policy in place. Our specialist employment solicitors can assist in drafting this for you as well as guiding you through the process practically, if and when required.


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