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Whistleblowing law set to change from June 2013

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SUMMARY: The Enterprise and Regulatory Reform Act 2013 makes changes to the law on whistleblowing.

Alleged sweetheart deals with HMRC, illegal marketing of drugs by Global pharmaceutical giants, NHS staff speaking out  about mismanagement and gross negligence… all have made the headlines and have one thing in common –  whistleblowing.

Since its introduction in 1999, the whistleblowing legislation has for many delivered a far from satisfactory outcome.

Whistleblowers can seek redress in the employment tribunal where they have suffered retaliation; this protection arises from the first day of employment, with no financial limit on the compensation available to the successful. Whilst this type of protection has to be right if an open workplace culture is to be encouraged, the law has been abused. Closer scrutiny of many cases identifies a personal gripe and not malpractice of a broader public concern. Employers have therefore been unhappy for some time about the lack of control over these types of cases.

There is also dissatisfaction in the employees’ camp. Recent figures published by Public Concern at Work show that the majority of complaints of wrongdoing are being ignored, with staff fearful of retaliation. Public Concern at Work interviewed 1,000 whistleblowers and the result is alarming: 19% stated they were disciplined or demoted; a further 15% were dismissed; and a staggering 75% stated that nothing was done about their concerns.

In light of the all-round dissatisfaction is it time for a different approach to dealing with whistleblowing in the workplace? The government considers that it is and the following changes will be introduced from 25 June 2013:

During the summer further changes are planned. Vicarious liability will be introduced to the whistleblowing law. An employer cannot currently be held liable where one of its employees victimises a whistleblowing colleague. It is therefore difficult for a whistleblower to seek redress even where the employer is aware of the victimisation and has taken no action to prevent it. It is intended that employers will become automatically responsible for the wrongdoing of their staff where they victimise a whistleblowing colleague in the course of their employment. Additionally, employees who victimise whistleblowers will also become personally liable for their actions.

Whilst changes summarised in this article may bring some improvement to the way both employers and workers approach whistleblowing, the Public Concern at Work report suggests that there still needs to be a significant cultural shift to improve the situation for those who do step forward and blow the whistle. It is widely acknowledged that a culture of silence is not a good thing for operational and financial success.

Now may be the time for employers to review their current stance on whistleblowing ensuring that there is a culture of openness. A clear and easily accessible whistleblowing policy and procedure supported by training for managers will be the first step in supporting this. The employer who encourages its staff to speak out and takes action to resolve concerns quickly is the one who may avoid costly litigation and adverse publicity. Employers who take this approach may surprise themselves with a positive outcome for the organisation as well as the whistleblower.

Helen Taylor, Senior Associate

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 LAW SET TO CHANGE FROM JUNE 2013

17477063_s

.

SUMMARY: The Enterprise and Regulatory Reform Act 2013 makes changes to the law on whistleblowing.

Alleged sweetheart deals with HMRC, illegal marketing of drugs by Global pharmaceutical giants, NHS staff speaking out  about mismanagement and gross negligence… all have made the headlines and have one thing in common –  whistleblowing.

Since its introduction in 1999, the whistleblowing legislation has for many delivered a far from satisfactory outcome.

Whistleblowers can seek redress in the employment tribunal where they have suffered retaliation; this protection arises from the first day of employment, with no financial limit on the compensation available to the successful. Whilst this type of protection has to be right if an open workplace culture is to be encouraged, the law has been abused. Closer scrutiny of many cases identifies a personal gripe and not malpractice of a broader public concern. Employers have therefore been unhappy for some time about the lack of control over these types of cases.

There is also dissatisfaction in the employees’ camp. Recent figures published by Public Concern at Work show that the majority of complaints of wrongdoing are being ignored, with staff fearful of retaliation. Public Concern at Work interviewed 1,000 whistleblowers and the result is alarming: 19% stated they were disciplined or demoted; a further 15% were dismissed; and a staggering 75% stated that nothing was done about their concerns.

In light of the all-round dissatisfaction is it time for a different approach to dealing with whistleblowing in the workplace? The government considers that it is and the following changes will be introduced from 25 June 2013:

  • Any disclosure eligible for protection will have to be in the “public interest”: This is with a view to limiting the number of speculative claims and to address the fact that there is no express requirement that a disclosure must be in the public interest. Only time will tell whether the number of cases has reduced.  What is however apparent to most is that there is certainly going to be further litigation over the meaning of “public interest”. Critics have already stated that the “public interest” requirement will weaken the protection for whistleblowers.
  • Any disclosure will no longer have to be in “good faith”: This current requirement tests the individual’s motive and flushes out disclosures founded on for example, the employee’s personal interest, or personal antagonism against a manager. These disclosures will not be made in “good faith”. One may ask why this requirement has been removed as it appears to  give the employer a further level of protection.  The government considered that the requirement that the disclosure must be in the public interest was sufficient to identify unmeritorious claims and the good faith requirement was a step too far for whistleblowers to have to get to grips with.
  • Good faith and compensation: Good faith is not disappearing completely from the whistleblowing legislation. If it appears to the employment tribunal that the disclosure was not made in good faith it can in a successful claim for unfair dismissal or detriment reduce the compensation by up to 25%.

During the summer further changes are planned. Vicarious liability will be introduced to the whistleblowing law. An employer cannot currently be held liable where one of its employees victimises a whistleblowing colleague. It is therefore difficult for a whistleblower to seek redress even where the employer is aware of the victimisation and has taken no action to prevent it. It is intended that employers will become automatically responsible for the wrongdoing of their staff where they victimise a whistleblowing colleague in the course of their employment. Additionally, employees who victimise whistleblowers will also become personally liable for their actions.

Whilst changes summarised in this article may bring some improvement to the way both employers and workers approach whistleblowing, the Public Concern at Work report suggests that there still needs to be a significant cultural shift to improve the situation for those who do step forward and blow the whistle. It is widely acknowledged that a culture of silence is not a good thing for operational and financial success.

Now may be the time for employers to review their current stance on whistleblowing ensuring that there is a culture of openness. A clear and easily accessible whistleblowing policy and procedure supported by training for managers will be the first step in supporting this. The employer who encourages its staff to speak out and takes action to resolve concerns quickly is the one who may avoid costly litigation and adverse publicity. Employers who take this approach may surprise themselves with a positive outcome for the organisation as well as the whistleblower.

Helen Taylor, Senior Associate

Contact Information

fgmedia@floydgraham.co.uk

+44 (0) 1604 871143

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