Employment Update - Whistleblowing

Welcome to Ashfords' Weekly Employment Update, where each week we consider recent developments in Employment and HR issues. This week we consider the recent legislative changes in relation to whistleblowing.

Whistleblowing has attracted widespread public interest in recent months, and the decisions of the Courts and Tribunals in case-law over recent years, have led to important changes in whistleblowing legislation. What is whistleblowing? The official definition under UK legislation is that of ‘making a disclosure in the public interest', but in essence the act of whistleblowing occurs when a worker reports suspected wrongdoing at work.

Enterprise and Regulatory Reform Act 2013

In our weekly update of 20th June 2012, we reported that the changes introduced by the Enterprise and Regulatory Bill (now the Enterprise and Regulatory Reform Act 2013 (‘the Act')) included closing the ‘loophole' in whistleblowing claims as currently workers could be protected when whistleblowing on breaches to their own contracts. From the 25th of June 2013, the Act has introduced several changes to the law in making a protected disclosure.

In The Public Interest

Firstly, a worker must now reasonably believe that their disclosure is ‘in the public interest', in order to be protected. This closes the previous loophole created by Parkins v Sodexho , which enabled the disclosure of a breach of the worker's own employment contract to qualify for legislative protection. However, as the Act does not introduce a definition of 'in the public interest', the definition will need to be determined by the courts and tribunals in the next few years. It is unclear whether, for example, the definition of "public" refers only to members of the public as a whole, whether a section of the public would be included, or whether the definition means something else entirely: the margins of the definition are unclear. Nevertheless, this is a significant change for employers.

Good Faith

Secondly, the requirement that the disclosure be made 'in good faith' has now been removed. Good faith had previously been described by the Court of Appeal in the case of Street v Derbyshire Unemployed Workers Centre as more than a reasonable belief in the truth of the information disclosed.

Consequently, even if the disclosure is made for reasons such as self-interest, it could still qualify as a protected disclosure. However, a tribunal could reduce any compensation by up to 25% if the disclosure is made in bad faith .

Vicarious liability

Prior to the introduction of the Act, the Court of Appeal in the 2012 case of Fecitt v NHS Manchester had ruled that an employer could not be vicariously liable for the acts of the Claimant's colleagues. Now, however, an employer can be vicariously liable for the actions of a worker who subjects a colleague making a protected disclosure to any detriment . In order to manage this risk, employers should encourage a transparent and open work environment, so that any worker feels comfortable that if they raise a grievance, then the appropriate action will be taken.

Defence

There is a defence available to an employer in relation to vicarious liability, which is to show that all reasonable steps were taken by the employer to prevent workers from subjecting those who raise concerns to any detriment. Examples of such steps could include, for example:

Training staff on up to date policies, procedures and codes of conduct.
Training senior staff to recognise protected disclosures.
Promoting the raising of public interest concerns.
Reviewing employee contracts to ensure they are compliant with current legislation.

Moreover, as regards any whistleblowing policy provisions already in place, employers may wish to maintain any current policies which state that disclosures made in bad faith may result in disciplinary action; however the employer should consider carefully whether to take that disciplinary action. Whistleblowing policies should be reviewed so that they include protected disclosures made ‘in the public interest' and the provision that disclosures must be made specifically ‘in good faith' should be removed.

The employer may also want to ensure that policies in place state that worker complaints relating to their own employment contract breaches are firstly raised as grievances in line with the employer's own grievance procedure.

The Whistleblowing Commission, set up by Public Concern At Work, is due to publish a report on the current legislation by the end of the year. It shall be interesting to see how the courts and tribunals deal with the recent changes in the next few years and it is likely that more changes to whistleblowing legislation shall be introduced in the near future.