Whistle-blowing at work can be a legal minefield

By CAROLINE MAHER
Published on Thursday 15 December 2011 16:08

WHISTLING while you work may work for the seven dwarves but for News Corp, Olympus and Winterbourne View Care Home, it has been whistle-blowing while you work.

Whistle-blowing is common parlance for what is legally known as a Public Interest Disclosure, a procedure which enables a worker to disclose malpractice or wrongdoing in the workplace.

In a perfect world, and properly handled, whistle-blowing can be music to the ears of the average employer – a way of bringing hidden problems to the surface and protecting your business from severe penalties and adverse PR. Yet whistle-blowing can be a legal minefield if employers fail to locate and defuse the mines in a legally safe manner.

Any worker who takes a personal stand against perceived bad behaviour may be unlikely to win any water-cooler popularity contests. Therefore, the Public Interest Disclosure Act 1998 provides protection for workers who report malpractice by their employer or third parties. It was introduced following official reports into the sinking of the Zeebrugge ferry, the Piper Alpha explosion and the scandals at BCCI, Barings and others which all revealed some staff had been aware of wrongdoing but were either too scared to raise concerns, or had done so in the wrong way or with the wrong person.

The Act protects workers against unfair dismissal and unlawful detriment due to their having made a ‘protected disclosure’. A protected disclosure must be made in good faith and must, in the reasonable belief of the worker, suggest one of following has occurred, is occurring, or is likely to occur:

• a criminal offence

• breach of any legal obligation

• a miscarriage of justice

• a danger to the health and safety of any individual

• damage to the environment, or

• the deliberate concealing of information about any of the above.

In some circumstances immediate external disclosures are protected in the case of disclosure to responsible third parties, including certain prescribed persons as defined by Parliament. Indeed, disclosures made to the media may even be protected, provided they meet various criteria – for example, it must not have been made for personal gain).

Employers who fail to put appropriate procedures in place run various risks. One always worth bearing in mind is that a secure, confidential environment for making internal disclosures can address misconceptions such as a worker being on the point of making incorrect assumptions about something that is, in fact and law, lawful. For that reason alone, it’s better to have the worker blowing his whistle inside the tent. If the aggrieved employee goes public, rather than putting trust in internal procedures, the consequences in terms of bad publicity and damaged staff morale can be dire. Putting the genie back in the bottle is likely to be impossible, especially if the employee then applies to an Employment Tribunal for redress.

If that tribunal finds such a worker has been unfairly dismissed, they also have to consider damage to the person’s reputation and career prospects elsewhere. The result can be a hefty uplift in the size of any award. Most whistle-blowing cases settle as employers fear the potential of an un-capped compensation award, adverse publicity and damage to reputation that could result. Of those cases which get a Tribunal award, there is a contrast between the average unfair dismissal award (£8,924) and average whistle-blowing award (£113,677). With no upper limit on what can be paid, the incentive for firms to have their house in order from the off is very clear.

We are not just talking here about well-publicised matters of criminality (e.g. phone hacking or serious Health & Safety breaches) The potential scope for whistle-blowing is large and, since the Bribery Act came into force in July 2011, it’s getting wider. The Bribery Act contains a new strict liability corporate offence that applies where an organisation fails to prevent bribery by a person “associated” with it, and that includes employees. However, the organisation has a defence if it can show that it had in place “adequate procedures” designed to prevent bribery and the Government guidance is clear that this would include having effective whistle-blowing procedures that encourage the reporting of bribery.

Whistleblowers cannot be punished over the disclosure, and there is no minimum period of service necessary before this protection kicks in so a disclosure might even be triggered on the first day at work as part of something said during induction.

What about life after a protected disclosure? Further problems may well arise when the worker goes back to normal company life, and finds they are subject to threats, harassment, and generally unfavourable treatment e.g. being sent to Coventry.

Having a considered policy in place for dealing with whistle-blowing and its aftermath is now essential. In fact, particularly since the Bribery Act came into the force, you might say it would be criminal not to.......

• Caroline Maher is a solicitor with CCW Business Lawyers

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