No excuse for not reporting wrongdoing

Rebekah Brooks arrives at the Old Bailey for the phone hacking case. Picture: Getty Images

THE reputation of the News of the World has been tarnished further as the Old Bailey heard from A list celebrities and former phone hackers. It is alleged that the practice of phone hacking was widespread and was applauded, or at least condoned, by the most senior staff in the organisation. In such circumstances, it is perhaps easy to feel sympathy for those who may have turned a blind eye to this for fear of reprisal.

The News of the World is not the only high-profile employer to have hit the headlines due to staff failing to disclose their employer’s wrongdoing. The NHS continues to come under scrutiny and a senior nurse disciplined over the Stafford hospital allegations was struck off this week. The BBC has been criticised both over somewhat generous packages offered to departing executives and its actions or inaction in relation to allegations regarding Jimmy Savile. Dave Lee Travis, while denying allegations against him, apparently described groping behaviour as “the norm”.

It is difficult to sympathise with staff who witness wrong behaviour but who chose to remain silent over many decades. It is a choice. The law offers significant protection for those employees who “blow the whistle”.

Broadly speaking, an allegation or even a query by an employee, which shows or tends to show that the employer is committing a crime or is in breach of a legal obligation, may be a “protected disclosure”. The employee does not need to be correct. Provided they reasonably believe that this has occurred and their disclosure is “in the public interest”, they are protected.

Disclosures can be made to the relevant authorities rather than directly to managers. It is unlawful to subject the employee who makes a protected disclosure to any “detriment” or to dismiss them. If the reason or principal reason is the fact that they made a protected disclosure then their dismissal is automatically deemed to be unfair and the employer is exposed to uncapped damages. Employment tribunals are accustomed to looking behind the reasons offered by employers to find the “real reason” for dismissal.

Some ex-employees blame “gagging clauses” in their settlement agreements for their failure to speak out. A former chief executive of an NHS Trust who received around £500,000 suggested that he should have been protected from being subjected to such a gagging clause.

However, contrary to the wide reporting and calls for legislative change, gagging clauses do not prohibit employees from formally reporting their allegations. Any provision in an agreement which seeks to preclude an individual from making a protected disclosure is unenforceable. Generally, the individual requires to take legal advice on such agreements and this should include advice regarding the enforceability of its confidentiality provisions.

There is a difference between those employees who may wish to report heinous crimes and those with an unjustified grievance against their employer, who are simply determined to wreak havoc. Until recently the law had a “one size fits all” approach which was arguably weighted against the innocent employer. Many employers legitimately wish to resolve grievances by way of a mutual agreement with the disaffected employee. The employee’s departure can often be the best or only practical outcome. However, regardless of how much they are paid and what they sign, some individuals have been able to continue to criticise their former employers with apparent impunity. The employers were left unable to rid themselves of these serial complainers and regard the matter as closed.

However, a change to the law last year introduced the requirement that a protected disclosure must be “in the public interest”. While what that means in practice is yet to be determined, it is hoped that it will strike a balance. Those who are simply being difficult about issues not in the public interest may be held to account, if they breach their confidentiality obligations. Employers should now be free to negotiate and resolve complaints whilst protecting themselves from the damage to morale and reputation inflicted upon them by the serial complainer.

However, it will continue to be the case that legitimate concerns “in the public interest” cannot be suppressed and employers liable for pernicious conduct will continue to be held to account due to the protection afforded to those who are prepared to speak out. In future, excuses made by those who do not report serious wrongdoing should be viewed with a degree of cynicism, especially where money has changed hands.

• Andrew Brown is a senior associate in Anderson Strathern’s employment and pensions unit www.andersonstrathern.co.uk