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The rise of the whistleblower and the calling out of unethical behaviour

09 July 2021

Whistleblowing claims are on the rise, partly in response to the pandemic, and also as a result of workforces finding their voice. Whilst many businesses are keen to root out unethical behaviour and demonstrate true commitment to their ESG strategy, the correct processes are not always in place. 

With The EU Whistleblowing Directive on the horizon and growing calls for wholescale reform of the current UK legislation employers who fail to act now to ensure that they have in place the appropriate tools to address whistleblowing do so at their peril.

Responsibility for ensuring a culture that supports and empowers workers to speak up rests with business leaders.

What is whistleblowing?

The legalities of what amounts to whistleblowing is complex. In broad terms, employees and workers are protected in certain circumstances when they "blow the whistle". In order to be protected the employee or worker must make a "qualifying disclosure" in the public interest to a prescribed party (for example to the worker's employer or a regulator). There is a specific set of wrongdoings which can qualify as a disclosure, namely: criminal offences, breach of any legal obligation, miscarriage of justice, danger to the health and safety of any individual, damage to the environment or the deliberate concealing of information about any of the aforementioned. 

Whistleblowing claims

A worker can bring a claim if they are subjected to a detriment on the grounds they have made a protected disclosure. An employee may bring an unfair dismissal claim or a detriment claim. If the principal reason for the dismissal is that the employee has made a protected disclosure, the employee shall be regarded as automatically unfairly dismissed. There is no minimum length of service in relation to such claims and there is no cap on the amount of compensation which can be awarded. In 2019/20 there were 2,827 whistleblowing claims, almost double the number of claims in 2016/17. Whistleblowing claims can result in significant awards, with some of the higher awards ranging from £500,000 to over £1,000,000.

Whistleblowing claims are also unique in that they are one of the few claims where an employee can apply for interim relief meaning that a tribunal can make an order for the continuation of employment (where employment has been terminated) pending the final determination of the case. A costly exercise for any employer.

The rise of whistleblowing 

As workplaces adapted to become Covid–secure in very tight timescales, many workers raised concerns in relation to their health and safety and that of their colleagues leading to a number of high profile cases throughout 2020 when big name employers were found to have fallen short of what was required. 

Protect, a whistleblowing advice service, reported 3,845 whistleblowers needing advice in 2020, an increase of 20% in cases over the year. The concerns included many Covid-related issues such as lack of PPE, social distancing and furlough fraud. Protect reported that one in four Covid-19 whistleblowers who contacted the advice line between September 2020 and March 2021 were dismissed. 

Increasing spotlight on ethical, responsible behaviour 

Alongside the rise of whistleblowing claims there has been an increased focus on business ethics with business leaders striving to be good corporate citizens, and conducting business responsibly. This has led to number of businesses turning their attention to their own governance and speak up policies.

Whilst certain sectors are heavily regulated with regard to whistleblowing, such as the financial services sector, other sectors are not. Having in place an effective speak up policy and driving the right culture that empowers people to speak up and ensures that people are held accountable for poor behaviour/wrongdoing is crucial, especially at a time of increasing awareness of rights. 

Preparing for the future 

So, what does the future hold?

Reform 

EU Directive 
Member states have until 17 December 2021 to transpose the Whistleblowing Directive 2019/1937/EU into national law. Private sector entities within member states with 50 to 249 workers have until 17 December 2023 to comply with the requirement to establish internal reporting channels. 

Albeit that the UK is no longer a member state in light of the Trade and Co-operation Agreement both the EU and the UK are required to commit to a "level playing field" - to prevent either party from weakening or reducing, its labour and social levels of protection in place on 31 December 2020. It is not therefore the case that we can assume that the Directive will not impact as the EU could invoke the rebalancing mechanism if UK laws breach the level playing field provision. 

In any event cross-border employers will be keen to keep track of EU requirements under the Directive and the impact on global whistleblowing policies and procedures. 

Notable additions in the Directive, not currently provided for in UK legislation are:

  • Wider protection – The Directive will cover a wider group of people including: self-employed contractors, volunteers, non-executive directors, shareholders and job applicants. The Directive also protects facilitators, including those who assist whistleblowers in the reporting process, individuals connected to the whistleblower, for example colleagues and family members who could suffer retaliation in a work context and legal entities owned by the whistleblower. 
  • Internal reporting channels – Entities with 50 or more employees must establish internal reporting channels and respond to reported concerns within a three to six month timeframe (depending on complexity). 
  • Independent advice – Whistleblowers must have free access to comprehensive and independent advice on the application of whistleblowing protection. 
  • Confidentiality – Save in very limited circumstances, the identity of the whistleblower must remain confidential. Disclosure of the identity must be limited to staff members who receive and follow up on the report unless explicit consent is received. 

For the UK there is also additional momentum building for change, it is reported that the Department for Business, Energy and Industrial Strategy (BEIS) will review its whistleblowing protections and there are rumours that it is planning to introduce a single body to protect and enforce workers' rights.

There are currently two Private Members' Bills seeking to enhance protection notably to repeal the Public Interest Disclosure Act 1998, expand the scope of those entitled to protection and the scope of a qualifying disclosure and introduce new criminal offences for failing to adequately handle a protected disclosure and for those who subject a person to a detriment as a consequence of being a whistleblower (or a close relative of a whistleblower). 

The Office of the Whistleblower Bill introduced to the House of Lords earlier this year proposes an "Office" to help facilitate whistleblowing, and maintain a fund and legal advisors to support whistleblowers. 

Now is the time to take action 

Investors, stakeholders, employees, customers, suppliers, shareholders and talent of the future all look for organisations that are centred on ethical and authentic decision making. Effective speak up policies where wrongdoing can be called out without fear of retribution are key. Businesses should be focused on:

Leadership 

  • Speak up should be endorsed by leaders within the organisation. 

Policies and procedures 

  • Are polices fit for purpose? Employees should be left in no doubt how to "speak up". Clear reporting obligations should be set out. 
  • Cross-border policies and procedures will require close attention in light of the EU Directive.

Training and support 

  • Is the workforce trained appropriately on what amounts to whistleblowing and what they should do if they have a concern? Is guidance given as to what amounts to a grievance and what constitutes a protected disclosure?
  • Do those responsible for the organisation's whistleblowing arrangements receive additional bespoke training and guidance?

Comment 

Employers are under increasing pressure to act responsibly. An organisation's approach to whistleblowing continues to receive attention from internal and external stakeholders. Reform is on the horizon and responsibility rests with business leaders to put in place the foundations that will ensure a supportive culture that will allow concerns to be appropriately raised and addressed for the benefit of the whole organisation. Direction has to come from the top to ensure a culture of openness and transparency. 

With the pandemic ongoing and many businesses planning a return to the workplace once permitted, it is likely that the number of whistleblowing complaints will only increase. The overall objective for any organisation must be that its people feel able to speak up if they are concerned about wrongdoing, safe in the knowledge that the concerns will be taken seriously and they will not be ignored, side-lined or dismissed.

At DWF, we run a tailored education programme for organisations called Responsibility, helping business leaders to prepare for the future, foster a positive culture, address governance issues and lead responsibly. As part of this transformational programme, we work with business leaders on the key issues raised in this update. If you would like further information on Responsibility please get in touch via the contacts below or email responsibility@dwf.law

Further Reading

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