Workplace whistleblowing is a prominent issue. This is particularly true in the wake of high-profile scandals such as PPI mis-selling and the alleged treatment of NHS whistleblowers (as set out in Sir Robert Francis’s report) and new rules in regulated sectors such as financial services.
If it’s handled incorrectly by employers, whistleblowing can also lead to high value claims by staff, with uncapped career-long losses possible in some circumstances.
Here, Jillian Naylor and Emma Gray of Linklaters LLP outline five things employers can do to minimise and mitigate the consequences of whistleblowing claims.
“Speak Up” campaigns encouraging staff to raise issues are becoming common as employers increasingly recognise that uncovering legal breaches, malpractice and other wrongdoing is of critical importance to sound management and can nip issues in the bud. Encouraging disclosures also has the benefit of creating a culture in which whistleblowers are less likely to be subjected to an unlawful detriment or unfairly dismissed.
Encouraging disclosures internally may also reduce the chances of an individual blowing the whistle outside the organisation. It therefore helps employers to manage issues and keep them confidential (where appropriate). However, if staff are encouraged to speak up it is equally important to ensure appropriate training is in place, particularly for managers so they know how to escalate issues and how to manage staff appropriately after an issue has been raised. A number of e-learning whistleblowing tools are available on the market for this purpose.
Implement a whistleblowing policy
A proper whistleblowing policy/process gives employees a proper channel for making disclosures and sets out a framework for managing disclosures. Employees are therefore less likely to resort to the grievance process, which is not designed for whistleblowing and can create a negative environment for handling disclosures.
A policy can also incorporate parameters and help to manage expectations, for instance by making it clear to employees that there may be some circumstances in which it may not be possible to fully involve them in the resolution of the issue. However, where appropriate, it is sensible to provide feedback to whistleblowers.
For larger organisations, a confidential hotline can help. If a disclosure is anonymous, it is also harder for the individual to establish that any employment action they later perceive as negative is linked to their whistleblowing. To help limit the risk of the employer being held vicariously liable for an employee’s actions against a whistleblower, publicise the whistleblowing policy and provide training on it.
Take appropriate measures against staff who victimise whistleblowers
Taking disciplinary action against any individuals who victimise whistleblowers helps to create a culture where whistleblowers feel they can raise issues. If an Employment Tribunal claim ensues, it can also help the employer to demonstrate that it took the issue seriously and re-established an environment where the individual can confidently return to work.
Proceed cautiously with disciplinary issues involving whistleblowers
Before taking any action against a worker who has raised an issue, identify whether there is a risk of a whistleblowing claim. Note that the previous requirement for workers to make disclosures in “good faith” no longer applies (unless the disclosure was made before 25 June 2013). It therefore no longer matters if an employee blows the whistle with a vindictive motive – it can still be protected if in the public interest.
If a whistleblower is to be dismissed for another reason (e.g. gross misconduct) proceed cautiously and create a paper trail evidencing the reason. Be mindful of the risk that an Employment Tribunal may find that the real reason for dismissal was the disclosure. If a whistleblowing claim is a risk, follow the ACAS Code before dismissal; otherwise compensation could be increased by up to 25%.
Note that an employer can be found to have subjected a worker to an unlawful detriment even after employment has terminated so be mindful of giving unfavourable references, for example.
Be alert to changes
Changes in the whistleblowing arena have become fast-paced. The Whistleblowing Commission put forward a number of recommendations including a Code of Practice and following a call for evidence in July 2013, the Government recently introduced a number of legislative and non-legislative changes.
In March 2015, BIS published “Whistleblowing: Guidance for Employers and Code of Practice”, which explains an employer’s responsibilities and sets out recommendations.
Within financial services, affected firms have until 7 September 2016 to comply with new measures which formalise whistleblowing procedures, which also serve as non-binding guidance for other regulated firms. They are already required (by 7 March 2016) to have appointed a “whistleblowers’ champion”, who should be a non-executive director subject to the new Senior Managers’ Regime.
This adds a new layer of personal accountability. It also requires the individual to oversee the preparation of an annual report on whistleblowing to the board which is available to the regulator and to report successful whistleblowing claims against the firm to the regulator. The approach to whistleblowing going forward is therefore likely to be formal and painstaking. The new rules also extend the scope of what constitutes whistleblowing to include, for example, disclosing any failure to comply with the firm’s policies.
As of 3 July 2016, the Financial Services and Markets Act 2000 (Market Abuse) Regulations 2016 require employers to have in place appropriate procedures for employees to report contraventions of the Market Abuse Regulation.
Further changes are afoot. Draft regulations requiring “prescribed persons” (to whom disclosures can be made externally e.g. HMRC, NHS England, the FCA/PRA) to produce annual reports of disclosures have been published, but not yet passed. So watch this space.