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Whistleblowing Update

17663630_sSUMMARY: The Enterprise and Regulatory Reform Bill is currently progressing through Parliament and proposes three significant changes to the current whistleblowing legislation. The recent case of Onyango –v– Adrian Berkeley t/a Berkeley Solicitors has also widened the concept of a protected disclosure to include a disclosure made after an employee’s employment has terminated.

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THE ENTERPRISE AND REGULATORY REFORM BILL

Inserting a Public Interest Requirement

The Enterprise and Regulatory Reform Bill (“the Bill”) amends the Employment Rights Act 1996 (“the ERA”) to add a ‘Public Interest Test’ for whistleblowing claims.

This amendment is directed at avoiding the effect of the Employment Appeal Tribunal’s decision in Parkins v Sodexho. This case held that the definition of a qualifying disclosure (which includes “breach of any legal obligation”) was broad enough to cover a breach of the whistleblower’s own contract of employment. For example, a complaint that the employer had not paid the employee the correct amount of holiday pay. The Government has previously referred to extending whistleblower protection to workers who blow the whistle about breaches of their own employment contracts as a ‘loophole’ which needs to be closed.

The Bill therefore proposes that in order for a whistleblowing claim under the ERA to succeed, a Claimant must show that he or she believed that their disclosure was made in ‘The Public Interest’ and that their belief was reasonable in the circumstances. This amendment would apply to all disclosures, not just those relating to a breach of legal obligation. The Bill does not elaborate on what amounts to ‘The Public Interest’ but the Explanatory Notes to the Bill state: ‘if a worker does not receive the correct amount of holiday pay (which may be a breach of the terms of his contract of employment), this is a matter of personal rather than wider interest.’

Removing the Good Faith Requirement

Under current legislation, with the exception of disclosures to legal advisers, a qualifying disclosure made by a worker will only be protected under the whistleblowing legislation if it is made in good faith. A disclosure made in good faith has been defined in case law as a disclosure made by a person acting with honest motives. If the predominant motivation for a disclosure is the employee’s personal interest or personal antagonism towards the employer, the disclosure will not be held to have been made in good faith and the employee will not be protected under the whistleblowing legislation.

The Bill proposes to remove the requirement for protected disclosures to be made in good faith. Instead the Employment Tribunal will have the discretion to reduce any compensation awarded by up to 25% in cases where disclosures are not made in good faith.

Extension to the Protection from Harassment or Bullying by the Employer

Currently, the ERA only protects whistleblowers from harassment or bullying by their employers. The Government states that it intends to introduce a provision having the effect that detrimental acts of one co-worker towards another (who has blown the whistle) will be treated as being done by the employer; therefore making the employer responsible. It will however provide a defence for an employer who is able to show that it took all reasonable steps to prevent the detrimental treatment.

These changes are due to come into force in April 2013.

WIDENING THE SCOPE OF WHISTLEBLOWING PROTECTION

Onyango –v– Adrian Berkeley t/a Berkeley Solicitors

The above case suggests an employee can benefit from whistleblowing legislation even if they make their disclosure after the termination of employment. Previously, an employee was only protected if they made a protected disclosure during the course of their employment.

Facts

After leaving his job at a firm of solicitors, Mr. Onyango made what he claimed were protected disclosures to his employer and to the Legal Complaints Service. He made these disclosures after his employment had ended. He alleged the disclosures led to his employers subjecting him to detrimental treatment; he claimed they accused him of forgery and dishonesty, which in turn lead him to being investigated by the Solicitors Regulation Authority. He brought a claim for victimisation based on making a protected disclosure.

Decision

His claim was originally rejected by the Employment Tribunal because the protected disclosures were made after his employment had ended.

Mr. Onyango appealed this decision and on appeal the Employment Appeal Tribunal (the “EAT”) considered the question of whether a worker could complain of detrimental treatment arising from a protected disclosure made after employment ends. The EAT noted that the Court of Appeal in Woodward –v– Abbey National ruled that the ERA’s whistleblowing provisions can be used by individuals subjected to detriment after termination of their employment, where the protected disclosure is made during the employment. The EAT pointed out that this did not mean the Court of Appeal was excluding a remedy for blowing the whistle after the employment contract had ended. The EAT held that the whistleblowing legislation protects a worker against any detriment for making a protected disclosure, nothing in that wording suggests protection is limited to disclosures made whilst employed. The appeal succeeded.

WHAT THESE CHANGES MEAN FOR EMPLOYERS?

Inserting a public interest requirement into the current legislation will prevent employees who may consider themselves at risk of dismissal, from making tactical disclosures alleging breaches of their own employment rights with a view to later relying on those disclosures as additional ammunition in an unfair dismissal claim. In addition, it prevents these employees seeking to rely on the whistleblowing legislation, which significantly increases the stakes of a claim, especially if the employee is highly-paid, since the cap on unfair dismissal compensation does not apply. The usual qualifying period for an unfair dismissal claim also does not apply to a whistleblowing claim.

Removing the requirement for disclosures to be made in good faith may lead to more whistleblowing cases being heard, however the reduction in compensation for claims not made in good faith will hopefully deter a surge in malicious disclosures.

Finally, in light of the extension of whistleblower protection to disclosures made after termination of employment, and the plan to hold employers responsible for the detrimental acts of co-workers towards whistleblowers, employers should review their whistleblowing policies. The policies should make it absolutely clear that workers will not be victimised if they make a protected disclosure, not just whilst they are employed, but also after the working relationship has ended. This should be communicated to all workers and in particular those who are in a position to give a negative reference or refuse to give a reference at all.

For a review of your whistleblowing policies and procedures please contact us.

Joanne Duck, Legal Assistant.

Contact Information

fgmedia@floydgraham.co.uk

+44 (0) 1604 871143

This update is for general guidance only and does not constitute definitive advice. 

Updated: by FG Solicitors
Call us on:  0808 172 93 22

WHISTLEBLOWING UPDATE

17663630_sSUMMARY: The Enterprise and Regulatory Reform Bill is currently progressing through Parliament and proposes three significant changes to the current whistleblowing legislation. The recent case of Onyango –v– Adrian Berkeley t/a Berkeley Solicitors has also widened the concept of a protected disclosure to include a disclosure made after an employee’s employment has terminated.

-

THE ENTERPRISE AND REGULATORY REFORM BILL

Inserting a Public Interest Requirement

The Enterprise and Regulatory Reform Bill (“the Bill”) amends the Employment Rights Act 1996 (“the ERA”) to add a ‘Public Interest Test’ for whistleblowing claims.

This amendment is directed at avoiding the effect of the Employment Appeal Tribunal’s decision in Parkins v Sodexho. This case held that the definition of a qualifying disclosure (which includes “breach of any legal obligation”) was broad enough to cover a breach of the whistleblower’s own contract of employment. For example, a complaint that the employer had not paid the employee the correct amount of holiday pay. The Government has previously referred to extending whistleblower protection to workers who blow the whistle about breaches of their own employment contracts as a ‘loophole’ which needs to be closed.

The Bill therefore proposes that in order for a whistleblowing claim under the ERA to succeed, a Claimant must show that he or she believed that their disclosure was made in ‘The Public Interest’ and that their belief was reasonable in the circumstances. This amendment would apply to all disclosures, not just those relating to a breach of legal obligation. The Bill does not elaborate on what amounts to ‘The Public Interest’ but the Explanatory Notes to the Bill state: ‘if a worker does not receive the correct amount of holiday pay (which may be a breach of the terms of his contract of employment), this is a matter of personal rather than wider interest.’

Removing the Good Faith Requirement

Under current legislation, with the exception of disclosures to legal advisers, a qualifying disclosure made by a worker will only be protected under the whistleblowing legislation if it is made in good faith. A disclosure made in good faith has been defined in case law as a disclosure made by a person acting with honest motives. If the predominant motivation for a disclosure is the employee’s personal interest or personal antagonism towards the employer, the disclosure will not be held to have been made in good faith and the employee will not be protected under the whistleblowing legislation.

The Bill proposes to remove the requirement for protected disclosures to be made in good faith. Instead the Employment Tribunal will have the discretion to reduce any compensation awarded by up to 25% in cases where disclosures are not made in good faith.

Extension to the Protection from Harassment or Bullying by the Employer

Currently, the ERA only protects whistleblowers from harassment or bullying by their employers. The Government states that it intends to introduce a provision having the effect that detrimental acts of one co-worker towards another (who has blown the whistle) will be treated as being done by the employer; therefore making the employer responsible. It will however provide a defence for an employer who is able to show that it took all reasonable steps to prevent the detrimental treatment.

These changes are due to come into force in April 2013.

WIDENING THE SCOPE OF WHISTLEBLOWING PROTECTION

Onyango –v– Adrian Berkeley t/a Berkeley Solicitors

The above case suggests an employee can benefit from whistleblowing legislation even if they make their disclosure after the termination of employment. Previously, an employee was only protected if they made a protected disclosure during the course of their employment.

Facts

After leaving his job at a firm of solicitors, Mr. Onyango made what he claimed were protected disclosures to his employer and to the Legal Complaints Service. He made these disclosures after his employment had ended. He alleged the disclosures led to his employers subjecting him to detrimental treatment; he claimed they accused him of forgery and dishonesty, which in turn lead him to being investigated by the Solicitors Regulation Authority. He brought a claim for victimisation based on making a protected disclosure.

Decision

His claim was originally rejected by the Employment Tribunal because the protected disclosures were made after his employment had ended.

Mr. Onyango appealed this decision and on appeal the Employment Appeal Tribunal (the “EAT”) considered the question of whether a worker could complain of detrimental treatment arising from a protected disclosure made after employment ends. The EAT noted that the Court of Appeal in Woodward –v– Abbey National ruled that the ERA’s whistleblowing provisions can be used by individuals subjected to detriment after termination of their employment, where the protected disclosure is made during the employment. The EAT pointed out that this did not mean the Court of Appeal was excluding a remedy for blowing the whistle after the employment contract had ended. The EAT held that the whistleblowing legislation protects a worker against any detriment for making a protected disclosure, nothing in that wording suggests protection is limited to disclosures made whilst employed. The appeal succeeded.

WHAT THESE CHANGES MEAN FOR EMPLOYERS?

Inserting a public interest requirement into the current legislation will prevent employees who may consider themselves at risk of dismissal, from making tactical disclosures alleging breaches of their own employment rights with a view to later relying on those disclosures as additional ammunition in an unfair dismissal claim. In addition, it prevents these employees seeking to rely on the whistleblowing legislation, which significantly increases the stakes of a claim, especially if the employee is highly-paid, since the cap on unfair dismissal compensation does not apply. The usual qualifying period for an unfair dismissal claim also does not apply to a whistleblowing claim.

Removing the requirement for disclosures to be made in good faith may lead to more whistleblowing cases being heard, however the reduction in compensation for claims not made in good faith will hopefully deter a surge in malicious disclosures.

Finally, in light of the extension of whistleblower protection to disclosures made after termination of employment, and the plan to hold employers responsible for the detrimental acts of co-workers towards whistleblowers, employers should review their whistleblowing policies. The policies should make it absolutely clear that workers will not be victimised if they make a protected disclosure, not just whilst they are employed, but also after the working relationship has ended. This should be communicated to all workers and in particular those who are in a position to give a negative reference or refuse to give a reference at all.

For a review of your whistleblowing policies and procedures please contact us.

Joanne Duck, Legal Assistant.

Contact Information

fgmedia@floydgraham.co.uk

+44 (0) 1604 871143

This update is for general guidance only and does not constitute definitive advice.