26 June: Mary Clarke, Employment Partner at DLA Piper comments: "The new whistleblowing legislation that came into force on 25 June under the Enterprise and Regulatory Reform Act, seeks to address misuse of the whistleblowing regime.
The Public Interest Disclosure Act 1998 introduced protection for workers from victimisation or dismissal arising as a result of them reporting malpractices of their employers. The protection applies to workers or employees who make a "protected disclosure". In order for a whistleblower to qualify for this protection, the disclosure must satisfy a number of tests relating to the nature of the information disclosed, the person/body/entity to whom the disclosure has been made and whether the disclosure has been made in good faith (i.e. what and how information is disclosed). Having a whistleblowing policy in place helps employers to reduce the risk of an employee making a disclosure outside of the organisation (for example directly to the media or industry authority) by putting in place a procedure by which malpractice can be reported to senior management within the organisation. Where an employer has an appropriate internal procedure for workers to make a disclosure, any direct public disclosure is less likely to meet the test for a protected disclosure and the whistleblower is less likely to receive that protection.
Employees/workers seeking to bring claims against their employer have been able to use whistleblowing protection for their own purpose by blowing the whistle in relation to breaches of their own contract of employment and relying on the statutory protection from dismissal or victimisation. A claim for whistleblowing also removes the usual limits for damages for unfair dismissal. The new Reforms intend to address the problem of the whistleblowing protection being used for an employee's own purposes.
One of the key changes is the removal of the need to show that a disclosure has been made in "good faith" and the employee's motives for making the disclosure will no longer be relevant. The "good faith" requirement was designed to avoid disclosures that were motivated purely by personal gain or which were made maliciously, but it has become practice for the whistleblowing regime to be used tactically for an employee's own purposes. The new legislation requires the worker to have a reasonable belief that the disclosure is made in the "public interest". The change is intended to remove disclosures which are not serious or which are purely self-serving (for example a disclosure about a breach of personal contract terms). It remains to be seen whether the new "public interest" test will prevent whistleblowing being used for an employee's own purposes. Much will depend on how wide an interpretation is given to the "public interest" requirement by the Employment Tribunal and in the meantime employers will need to remain cautious of this risk.
Another key change, is the introduction of vicarious liability for acts of employees who victimise a person because they have blown the whistle. This provision potentially marks a significant increase in liability for employers, as whistleblowers will be able to seek redress from their employer if they are subjected to a detriment by a co-worker because they have blown the whistle. Employers will however have a defence to such a claim provided they can show that they took all reasonable steps to prevent the detriment taking place and should consider whether they have any such measures in place.
Employers should review their internal whistleblowing procedure and have a plan to follow in the event of a protected disclosure being made by a worker or employee. Even if a worker has a valid disclosure to make, in most cases they will have a duty to use the employer's internal procedure to make the disclosure before going to an external body. If an employer does dismiss an employee who has made a protected disclosure, provided the worker has a sufficient period service, it will be for the employer to disprove that the reason for dismissal was the protected disclosure. There is scope for claims to be brought against employers even after termination of employment and employees can use post-termination disclosures to create a whistleblowing claim if they suffer a detriment as a result (for example the refusal to provide a reference due to the disclosure).
The test of these changes will be whether workers will no longer be be able to use protected disclosures solely as a way of advancing claims against their employers. Protection for whistleblowing is intended to encourage employees to make disclosures about wrongdoing in their organisation which they reasonably believe is contrary to the public interest. Health care is one area where there is a clear public interest to know of wrongdoing or malpractice and there is a policy reason for a whistleblower to be protected when making a disclosure of this kind. The protection is not however intended to apply to an employee who makes a disclosure about a breach in his/her own contract purely for the purpose of pursuing/advancing a claim against the employer.
There are considerable problems with whistleblowing protection in its current form. However, it remains to be seen whether the proposed amendments will achieve the appropriate balance between protection for genuine whistleblowers and deterrence of ‘nuisance’ claims."
