Corporate Governance is an increasingly hot topic. Businesses are getting to grips with the new Bribery Act 2010 (which requires "adequate procedures" to prevent bribery, amongst other matters). The UK Corporate Governance Code (effective for accounting periods after 29 June 2010) applies to companies with a premium listing but all well managed companies will act on its key principles. A whistleblowing policy is therefore essential to business.
This isn't just lip service to more regulation. Internal wrong doing or bad practices can literally bring a business down and employers have a vested interest in encouraging whistleblowing. A system which encourages the reporting of concerns is a must for every business.
There are other issues for employers to consider such as minimising potential reputational harm and, importantly, lessening the chance of litigation.
Most employers and employees have an awareness that genuine "whistleblowers" are protected by the law but detailed knowledge beyond that varies. The legislation is the Public Interest Disclosure Act 1998 (PIDA). If a "protected disclosure" is made and the employee is dismissed or "made redundant" as a consequence it is an automatically unfair dismissal, no matter how long or shorter time the employee has been in post. Employees are also protected from "detriment" such as threats or harm to career prospects.
Both employees and employers involved in a whistleblowing situation will need to be informed further on the legislation and the many case law decisions.
The key points are:-
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First, a disclosure must be a qualifying disclosure (for example a criminal offence; a danger to health and safety or damage to the environment or a deliberate concealment of something which relates to these).
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The employee must make the protected disclosure in good faith. Many of the cases relate to this requirement. Importantly, however, good faith is not the same as a disclosure which is correct. A qualifying disclosure which turns out to be mistaken may still provide adequate protection if made in good faith. Motivation is a key factor. An employee with "mixed motives" may well still however qualify for protection.
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External disclosures to third parties are also a ripe source of disputes. Employees can make disclosures to their legal advisor in the course of obtaining advice and can report matters in good faith to government ministers and to a number of prescribed persons such as HMRC, the Health & Safety Executive and the Office of Fair Trading - there are however less obvious wider categories.
We all remember the headline cases that make the news. What most people do not appreciate is that whilstleblowing issues arise for employers and employees frequently. It is precisely those businesses who are well informed; with appropriate and adequate procedures and appropriate training who can survive the challenges of whistleblowing, (and what is then exposed), the best.
For further information and advice, please contact Holly Dobson on 0114 266 6660 or email [email protected].
