Partner Article

Employers must be wary of the whistleblower

Workers may bring claims, where they’ve been dismissed or subjected to detrimental treatment on grounds that they have ‘blown the whistle’ on employer’s unlawful activities.

Unlike most other employment rights, there is no minimum period of service required and there is no cap on the compensation that may be awarded if a claim is successful. On 25 July 2013, important changes to the legislation governing whistleblowing were implemented.

In this article, we highlight the issues that follow on from those changes and the practical impact that they will have for employers dealing with any public interest disclosures.

The first step for employers is to review their whistleblowing policy. Employers that don’t already have a whistleblowing policy in place should adopt one as soon as possible. In light of the changes, where there is a policy it may need to be amended. One of the key changes on 25 July was the introduction of ‘vicarious liability’ for detriment caused to the whistleblower by another worker. Individual liability was also introduced for workers.

As a consequence, Employment Tribunal claims may be made against the employer and individual workers. It will be possible for the employer to establish a defence to a claim relating to vicarious liability, if it is able to establish that all reasonable steps have been taken to prevent workers subjecting a whistleblower to detrimental treatment.

Introduce training. The ‘all reasonable steps’ defence already applies to discrimination claims. From those cases, we know the existence of a whistleblowing policy alone is not going to be sufficient to establish a defence. The employer will have to show that further steps have been taken to prevent detrimental treatment. As a minimum, this will involve some type of training programme. In practical terms, this could be aimed at helping management recognise qualifying disclosures, as well as understanding how to deal with them. It will also raise awareness of the rights of the individual to make protected disclosures.

Is the disclosure in the public interest? The requirement has been introduced that the worker must reasonably believe that the disclosure is in the public interest. This change has been brought in to prevent the use of whistleblowing legislation in order to bring claims where the only legal breach concerns a term in the worker’s contract of employment. If the complaint concerns an issue that is relevant to the individual only – for example, payment of a bonus – it should be dealt with under the grievance policy and not the whistleblowing policy.

Has the disclosure been made in good faith? Balancing out the introduction of the ‘in the public interest’ requirement, the Government decided to remove the requirement to show that the disclosure was made in ‘good faith’. In essence, the disclosure may still be protected, even where the worker has some ulterior motive. However, there may be financial consequences for the individual, as any compensation awarded may be reduced by up to 25 per cent, where it’s found that the disclosure was not made in good faith.

Timing of the disclosure. The legal changes to the whistleblowing regime apply to disclosures made on or after 25 July 2013. Where a disclosure was made before that date the ‘old’ rules continue to apply. Employers will need to be aware of this – for example, where the disclosure concerns a breach of the worker’s own contract.

One final point to take into account is the further limit of a year’s pay, which has been recently placed on compensatory awards for ‘normal’ unfair dismissal. As a result, it is possible that we will see increasing numbers of claimants relying on whistleblowing rights to bypass these limits, particularly as there is no qualifying service.

This was posted in Bdaily's Members' News section by Gateley .