Whistleblowing by Employees

October 2013

The reporting of wrong-doing is actively encouraged in the US by legislation that entitles those who do so to a minimum of 10% of any fines levied or amounts otherwise recovered as a result of their actions. Thankfully, Britain has not yet gone this far. However, the relevant legislation over here has recently been amended so that those who blow the whistle at work no longer have to do so ‘in good faith’. As from 25 June 2013, any worker who makes a disclosure that is not in good faith will still receive protection from dismissal and detriment, but the compensation they are awarded may be reduced by up to 25% at the Employment Tribunals discretion.

One of the reasons for the above is because the legislation has also been amended so that disclosures about private matters, such as breach of their own contracts of employment, and claiming protection for doing so, which was the previous case.
The rationale behind the above is that if a disclosure is made in the public interest, even if it is made in bad faith, this shouldn’t necessarily mean that it should be protected.

Whistleblowing protection is valuable because if the principle reason for an employee’s dismissal is because they made a protected disclosure, this is automatically unfair and the normal two year qualifying period for bringing a claim of unfair dismissal and the cap on the compensatory award (currently £74,200 or one year’s gross pay) do not apply.

It is important to bear in mind that the disclosure itself does not have to be in the public interest – it is enough for the employee to reasonably believe that the disclosure is in the is in the public interest. Also, ’public interest’ is not defined in the legislation. However, it is likely to mean something that affects a class of people, as opposed to just one individual. No doubt case law will provide further guidance in due course.

It is not currently unlawful for co-workers to subject a colleague to detriment for making a protected disclosure and, therefore, employers cannot be vicarious liable for this. However, this too will change later this year at which point individual workers or agents will become personally liable for subjecting whistleblowing colleagues to acts of detriments and employers will be vicariously liable for this unless they can show they have taken all reasonable steps to prevent such treatment. To provide a potential defence to any such claims of vicarious liability, employers should implement carefully worded whistleblowing policies and provide managers with training on the issue.

If you do not currently have a whistleblowing policy and would like us to prepare one for you, or if you have a policy, but would like advice on whether it encompasses the latest reforms, please contact our Employment Law Deparment on  01296 318500.