Whistleblowing Legal Reform Briefing from Protect and Parrhesia

This a joint briefing from the whistleblowing charities Protect and Parrhesia on the key legal reforms that we see as vital for improving whistleblowing protection in the UK. The document also includes draft amendments in the Annexes that could be used in any future employment bill.

We suggest that the following issues are a priority:

a) Scope of protection to include all those in the workplace. This is set out in our current Annex A of the attached Bill where we introduce a non-exhaustive list, including job applicants (to prevent blacklisting of whistleblowers). This is already the case in some sectors (NHS for instance) and is in line with what most international jurisdiction adopting whistleblowing laws are putting in place.1 We would also suggest that the extension of protection might include those who the employer thinks may be preparing to whistleblow – importing the language of our current new clause on prohibition of discrimination Annex B – “An employer must not discriminate, harass or victimise any person because it appears to the employer that the person has made or may make a protected disclosure.”

b) Standards on employers –This could be a game-changer and there is text for an amendment in Annex C. There are huge swathes of the economy where there are no requirements on employers to have any internal arrangements, and international best practice is certainly moving this way. Combine this with a preventative duty on employers and we could shift the focus away from the individual to bring a claim when matters have gone wrong, to a requirement on employers to facilitate whistleblowing. It would then be possible for regulators to impose sanctions where they failed (as indeed is already the case now with some regulators such as the FCA/PRA who require whistleblowing rules in the financial services sector).

c) Greater protection for whistleblowers- The hurdles that a whistleblower has to overcome to obtain legal protection are very high. We would like to see the current test for dismissal – that making a protected disclosure was the “main or principal reason” for dismissal – brought in line with the test for detriment i.e. “on the grounds that”. This is set out in our Annex D. This would also have the added benefit of simplifying and harmonising the law. In addition, access to justice would be improved by a reversal of the current burden of proof as in our new clause in the Bill (see Annex E). In future, once it is established that a worker blew the whistle and has suffered detriment/dismissal the assumption should be that the reason for the detriment/dismissal was whistleblowing, with the onus on the employer to identify an alternative reason.

D) Creating a regulator for whistleblowing- Whistleblowing Commission / Office for the Whistleblower – a body that co-ordinates whistleblowing, sets standards for employers and regulators, and has the power to impose sanctions, is a powerful ask. We understand that this might be a more ambitious inclusion in any forthcoming Bill, but it could significantly raise the profile of whistleblowing, have wide public support and offer an essential element of independent assurance of protection for future whistleblowers (ensuring prosecution/advocacy where the current regulators fail). Please see Annex F for a detailed proposal of what such a body should look like in practice.

Annex A:

Extension of meaning of “worker” etc. for Part IVA.

(1) For the purposes of this Part, any person who makes a qualifying disclosure is protected against detriment and unfair dismissal in accordance with this Act, and such persons include, but are not limited to:

(a) employees and workers including agency and contract workers;

(b) job applicants and those who acquire information during a recruitment process;

(c) persons undertaking work placements and work experience;

(d) self-employed contractors;

(e) volunteers and interns;

(f) paid and unpaid trainees;

(g) non-executive directors and trustees including pension trustees;

(h) shareholders;

(i) foster carers;

(j) priests and ministers of religion;

(k) crown employees and those appointed by the crown;

(l) public and private office holders;

(m) suppliers, partners and business associates of the employer and any persons working under the supervision and direction of contractors, subcontractors and suppliers;

(n) third persons connected to the reporting person including family members and colleagues;

(o) trade union representatives;

(p) partners in partnerships or limited liability partnerships; and

(q) a person receiving coaching or training for sporting or recreational purposes (whether

or not that person pays for such coaching or training).

(2) Any persons who either:

(a) receive; or

(b) investigate a protected or qualifying disclosure, shall be protected from detriment in the same manner as the person making the disclosure.

(3) The Secretary of State may by order make amendments to this Section to extend the category of persons who enjoy protection under this Part.

(4) An order under subsection (4) may not make an amendment that has the effect of removing a category of persons unless the Secretary of State is satisfied that there are no longer any persons in that category.”

Annex B:

Prohibition of discrimination for making a protected disclosure.

(1) An employer must not discriminate, harass or victimise any person because it appears to the employer that the person has made or may make a protected disclosure.

(2) For the purposes of this Act:

(a) a person (A) discriminates against another (B) if, because of a protected disclosure, A treats B unfavourably;

(b) a person (A) harasses another (B) if A engages in unwanted conduct related to B’s protected disclosure and the conduct has the purpose or effect of: (i) violating B’s dignity; or (ii) creating an intimidating, hostile, degrading, humiliating or offensive environment for B; (c) in deciding whether conduct has the effect referred to in subsection (2)(b), each of the following must be taken into account: (i) the perception of B; (ii) the other circumstances of the case; and (iii) whether it is reasonable for the conduct to have that effect; (d) a person (A) victimises another person (B) if A subjects B to a detriment because: (i) B has made a protected disclosure; or (ii) A believes that B has made, or may make, a protected disclosure.”

Explanation This clause imports the language of the Equality Act and makes it unlawful to discriminate, victimise or harass a person for a protected disclosure. It simplifies and harmonises the law and makes it therefore more accessible. It should be seen as additional to the right not to suffer detriment and covers circumstances of perceived or anticipated whistleblowing. The language of discrimination is already used in regulations for NHS employers and widely understood by workers: “3. An NHS employer: (1) must not discriminate (2) against an applicant (3) because it appears to the NHS employer that the applicant has made a protected disclosure (4).” The Employment Rights Act 1996 (NHS Recruitment – Protected Disclosure) Regulations 2018.

Annex C:

Employers’ duty to enable reporting and to act on disclosures of information.

(1) Employers which have:

(a) 50 or more employees;

(b) an annual business turnover or annual balance sheet total of £10 million or more; or

(c) operate in the area of financial services or are vulnerable to money laundering or terrorist financing, shall be required to establish internal channels and procedures for reporting and managing

qualifying disclosures. The number of employees under (a) shall include employees of all franchises, subsidiaries and Associated employers as defined under Section 231.

(2) Employers’ procedures shall include:

(a) channels for receiving the disclosures which are designed, set up and operated in a manner that ensures the confidentiality of the identity of the person making the disclosure and prevents access to non-authorised persons;

(b) the designation of a senior person who has responsibility for the effectiveness of reporting channels and following up on disclosures, whose name and contact details are clearly communicated and accessible;

(c) the designation of a person or department competent for following up on the disclosures;

(d) diligent follow up to the disclosures by the designated person or department;

(e) clear and easily accessible information regarding the procedures and information on how and under what conditions disclosures can be made externally to competent authorities including prescribed persons under Section 43F;

(f) a comprehensive procedure for documenting whistleblowing concerns, and the actions taken as a result of each concern disclosed, including outcomes;

(g) a system for record keeping the information in (f) which enables employer to identify patterns and enables assessment of effectiveness; and

(h) signposting to sources of help for the person making the disclosure, that should include any staff or trade-union representative in place and external sources of advice.

Explanation Subsection (1) adds new categories of concern (f) and (g), which were identified by Protect’s Whistleblowing Commission as gaps in the current legislation. Categories (h) and (i) replicate the reportable concerns which are included in the Chapter 18 (Whistleblowing) of the FCA Handbook.

New subsection (3) provides immunity from civil proceedings for those who make a protected disclosure and reflects the Irish legislation.

New subsection (3A) introduces a public interest defence for persons disclosing information in accordance with the Act, in circumstances where they may face criminal prosecution. Wording is

taken from the Irish legislation.

(3) Notwithstanding any duty to third parties, unless a risk assessment identifies a serious risk of harm to any person, the employer shall inform the person making the disclosure:

(a) that the report has been received, within seven days;

(b) of all progress taken in response, including any action taken by a prescribed person, and where there has been no action, to explain in writing the reasons every 14 days; and

(c) within a reasonable timeframe, not exceeding three months following the disclosure, to provide substantive feedback about the follow-up to the disclosure and the impact of the disclosure.

(4) Employers shall be under a duty to establish protective measures as soon after the disclosure as possible, to prevent detrimental treatment by the employer, the employer’s officer or

agent, or by any third party to someone who has made, is believed to have made, or is believed to have the intention of making a protected disclosure. Such measures include, but are not

limited to:

(a) undertaking a risk assessment to identify and mitigate any risks of detrimental treatment to the person making the disclosure; and

(b) providing the person making the disclosure with a designated contact within the organisation, for the purpose of reporting any detrimental treatment.

(5) Employers shall be under a duty to provide training to all staff on how to make a disclosure.

(6) The Secretary of State shall consult with interested parties and require the Advisory, Conciliation and Arbitration Service to produce a statutory Code of Practice on receiving and

handling protected disclosures.

Explanation

This clause follows the EU Directive in setting standards for employers of 50 or more employees, those with £10m turnover, or those in financial services, and prescribes some detail of how the organisation should respond to disclosures.

It also proposes a statutory Code of Practice, which would follow the best practice already developed by the Whistleblowing Commission to establish whistleblowing procedures. Some of the provisions in (2) go beyond the EU Directive’s requirements and are highlighted in comments below. This would harmonise the law and practice with the grievance regime that employers are already very familiar with, the ACAS Code of Practice: Disciplinary and Grievance at Work. The requirement in (2)(b) of a designated senior person follows existing requirements in some sectors, e.g. in financial services, the FCA requires a “whistleblowing champion” at board level to ensure that there is strategic oversight. Subclause (3) obliges employers to provide feedback on action they take, or a prescribed person takes, in response to the disclosure (subject to a risk assessment that this will not cause serious risk of harm to any person). Where no action is taken, the employer should provide fortnightly updates in writing to the whistleblower explaining why. Subclause (4) introduces a mandatory duty on employers to take reasonable steps to prevent detrimental treatment. This is a pro-active duty which does not currently exist, and the intention is to allow regulators/the Whistleblowing Commissioner to enforce this duty, without the need for an individual whistleblower to bring a claim. Subclause (5) introduces a duty on employers to provide whistleblowing training.

Annex D:

Test for unfair dismissal

Section 103A shall be substituted:

“An employee who is dismissed shall be regarded for the purposes of this Part as unfairly dismissed if the dismissal is on the grounds that the employee made a protected disclosure.”

Explanation

This clause imports the lower test “on the grounds that” for an unfair dismissal claim (which the courts have interpreted as meaning “a material factor in”). This new language is used in PIDA for

bringing a detriment claim, but PIDA currently sets a higher hurdle for an unfair dismissal claim for making a protected disclosure – it has to be the “main or principal reason” for a dismissal.

Annex E:

Reversal of the burden of proof

After Section 47B(4), insert:

“In proceedings before a court or tribunal relating to a detriment under Section 47B of the Employment Rights Act 1996, or dismissal under Section 103A of the Employment Rights Act

1996, and subject to the person making the disclosure establishing that he or she made a qualifying disclosure and suffered a detriment or dismissal, it shall be presumed that the

detriment or dismissal was made in retaliation for disclosure. In such cases, it shall be for the person who has taken the detrimental measure or dismissed the person to prove that that

measure or dismissal was based on duly justified grounds.”

Explanation

This new clause ensures that the burden of proof in any tribunal or court proceedings for whistleblowing detriment or dismissal shifts to the employer. Once it is established that the

whistleblower has made a qualifying disclosure and suffered detriment, it is for the employer to prove that they had a justifiable reason for their action. The wording follows that in the EU

directive. It harmonises the test applicable to whistleblowing with the one used in discrimination cases, which is much better known and understood.

Annex F:

“The Commission for the Protection of Whistleblowers

(1) The Secretary of State shall establish the Commission for the Protection of Whistleblowers to enhance the transparency and enforcement of economic crime and other wrongdoing.

(2) The objectives of the Commission for the Protection of Whistleblowers are:

(a) to ensure that concerns raised by whistleblowers related to offences committed under this act are acted upon and remedied;

(b) to promote good corporate governance and discourage misconduct and malfeasance;

(c) to protect the public purse and ensure that wrongdoers bear the cost of wrongdoing revealed by whistleblowing;

(d) to promote the normalisation of whistleblowing as part of ethical governance, operating with a presumption in favour of transparency; and

(e) to reduce conflict and litigation relating to whistleblowing.

(f) to provide an independent disclosure and reporting service

(3) The Secretary of State shall ensure that there is an efficient and effective system to support the carrying out of the business of the Commission for the Protection of Whistleblowers.

(4) The Commission for the Protection of Whistleblowers shall have the following functions:

(a) to act as an investigator of alleged maladministration or a failure to investigate suspected offences as stated in section 8, section 15, section 26 (4) and section 31 of this Act;

(b) to set standards about how offences related to offences of section 8, section 15, section 31 and section 26 (4) of this Act expected of law enforcement bodies, prescribed persons as stated in 43F of the Employment Rights Act 1996 and employers and issue guidance of such standards;

(c) to improve public awareness and education of people’s rights regarding whistleblowing; and

(d) to administer civil penalties where the Commission judges appropriate against law enforcement bodies, employers, company directors and senior managers or prescribed persons as stated in 43F of the Employment Rights Act 1996, for breaches of their responsibilities under this Act.

(5) The Commission for the Protection of Whistleblowers shall have powers:

(a) to require any person to provide such documentation or information as requested in order to perform the functions under (3);

(b) to enter any premises and undertake such enquiry as necessary in order to perform the functions under (3);

(c) to issue warning notices and redress orders to ensure that employers, company directors and senior managers and prescribed persons fulfil their responsibilities under this Act; and

(d) to issue civil penalties where warning notices and redress orders are not complied with.

(6) The Secretary of State shall establish a civil penalty fine regime where a person, employer, company directors and senior managers or prescribed person is found to be in breach of subsection (4) and (5).

(7) The Commission for the Protection of Whistleblowers shall provide the person making the whistleblowing concern to them with the proposed findings of fact and legal conclusions before concluding any investigation. The person making the whistleblowing concern may submit written comments about the report which will be considered by the Commission for the Protection of Whistleblowers in the final outcome of the investigations.

(8) For the purposes of subsection (3) above, the functions of the Commission for the Protection of Whistleblowers will apply to all employers and prescribed persons as stated in 43F of the Employment Rights Act 1996, as defined in Section 43F and Section 43K(2) of the Employment Rights Act 1996.

(9) Prescribed persons as stated in 43F of the Employment Rights Act 1996 shall provide the Commission for the Protection of Whistleblowers with relevant information on request. The Secretary of State may by order identify information that a prescribed person may decline to provide for the purposes of safeguarding national security or where such information would prejudice a police investigation.”