This is the second part of a two-part article guiding employers on the issue of whistleblowing. Previously, we looked at what amounts to a ‘protected disclosure’ and how a clear and effective whistleblowing policy can help employers to manage protected disclosures successfully. You can find this article here. Now, we focus on the legal protection offered to whistleblowers and what could happen if a whistleblower feels mistreated or is dismissed after making a protected disclosure. We also consider the special rules applying to the financial sector and the impact of the EU Whistleblowing Directive 2019/1937.
What Protection Do Workers Have Under The Whistleblowing Legislation?
Under Section 47B of the Employment Rights Act 1996 (ERA), an employee or worker has the right not to be subjected to any detriment from their employer by any act, or any deliberate failure to act, because they have made a protected disclosure. For employees only, this includes the right not to be unfairly dismissed.
What is Detriment?
While the term ‘detriment’ is not defined in the ERA, we know from case law that it must show a disadvantage and that an ‘unjustified sense of grievance’ is not enough. The Whistleblowing Commission Code of Practice provides examples of detriments a worker may face for having made a disclosure, including the following:
- a demotion or having some duties taken away
- not being considered for a promotion
- being bullied or harassed
- suspension
- denial of training or access to resources
- receiving less salary or other benefits
- victimisation
- not being provided with an adequate reference
- being set unreasonable targets
- being required to work longer hours
- disciplinary sanction
It is important to note that a detriment can occur even after the relevant relationship with the employer has been ended or terminated.
Automatic Unfair Dismissal
Under Section 47B of the ERA, employees - but not workers who have fewer statutory rights - shall be regarded as automatically unfairly dismissed if the reason or the principal reason is due to the fact they have reported a protected disclosure. They will not, therefore, be subject to the qualifying service requirement that normally stands. Instead, they can bring a claim even if they have less than two years of service.
An employee does not necessarily have to be dismissed for them to be able to bring a whistleblowing unfair dismissal claim. Employees who made a protected disclosure and then resigned on the basis that their employer’s conduct was such that they were forced to resign, may be able to claim automatically unfair constructive dismissal.
Causation and Burden of Proof
If a whistleblower believes that they have been unfairly treated because they have made a protected disclosure, they may decide to take their case to an employment tribunal.
In such circumstances, it is up to the worker to prove that they suffered detrimental treatment after making a protected disclosure. The treatment must be more than just related to the disclosure – there should be a causal link between the protected disclosure and the reason for the unfair treatment. The disclosure must therefore have materially influenced the detriment suffered.
The onus is on the employer to prove that the worker did not suffer a detriment due to the disclosure and that it was because of another acceptable reason such as performance, conduct or redundancy. This responsibility on the employer makes it even more important to keep paper trails of any actions or decisions that are made, including the reasoning behind them.
It is harder for claimants to succeed with an unfair dismissal claim as there is a higher bar for them to show that there is a causal link between disclosure and dismissal. It should be the main reason, not just a part of the reason that led to the dismissal. An employment tribunal will consider the decision-making processes of the employer and whether they knew about the protected disclosure when concluding whether this is the case.
Potential Remedies
Only employees may bring whistleblowing unfair dismissals and the time limits are the same as for other unfair dismissal claims. Both employees and workers may bring a claim for whistleblowing detriment and in most cases, the claim must be brought within three months of the detriment.
The ERA was amended in June 2013 to permit a whistleblower to bring a detriment claim against a co-worker or agent, making them personally liable for their conduct. An employer can also be vicariously liable for the actions of its workers or agents even if it did not know about or approve of their actions. The employer will, however, have a defence if it can show that it took all reasonable steps to prevent the detrimental treatment.
Claims for automatic unfair dismissals will be awarded by calculating the basic award plus a compensatory award which will be determined by loss of earnings and future losses as well as a potential stigma attached to the employee. Awards for detriment claims are assessed on a similar basis to discrimination claims and may include an award for injury to feelings as well as injury to feelings.
Given that there is no upper limit on the amount of compensation that can be awarded to employees and workers, successful detriment and automatic unfair dismissal claims have the potential to be very costly to employers. For this reason, employers are advised to manage disclosures of information very carefully.
Special Rules For The Financial Sector
In 2015 the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) introduced new rules which were designed to strengthen the protection afforded by the whistleblowing legislation. These rules, which came into effect in September 2016, apply to all UK-incorporated banks, building societies, credit unions and investment banks.
Whistleblowing has been very much in the FCA’s spotlight and the regulator launched a campaign in March 2021 to encourage individuals to report wrongdoing. All FCA and PRA-regulated entities are now advised to comply with specific rules and policies on whistleblowing. This includes:
- appointing a ‘whistleblowers’ champion’ with responsibility for managing the firm’s internal whistleblowing policies and procedures. This will usually be a senior manager who must report to the board annually about their operation
- having up-to-date written whistleblowing procedures
- allowing a variety of communication methods to identify a concern
- having reasonable measures in place to prevent the victimisation of whistleblowers
- managing disclosures that are made anonymously and in confidence
- providing feedback where appropriate
- providing training to staff and management to ensure that everyone is aware of the whistleblowing process and its rules
The EU Whistleblowing Directive
On 16 April 2019, the EU Parliament passed a new Directive which was designed to achieve a minimum level of common protection for whistleblowers throughout the European Union. The deadline for implementation of the Directive has already passed and though the Directive is still yet to be implemented in many EU Member States, meaningful progress is now gradually being made and draft legislation has surfaced across Europe. Having left the EU, the UK no longer has any legal obligation to apply the Directive, and it seems unlikely that it will. However, the Directive could still have a significant impact on UK businesses.
Under the Trade and Cooperation Agreement, the UK and the EU are required to commit to a ‘level playing field’ about the levels of protection in labour and social standards. The UK government will have to therefore be mindful of this when considering any reforms to existing whistleblowing legislation.
Any employer based outside the EU that operates inside the EU will find itself subject to the Directive, or rather the implementing legislation of the member states within which it operates. Similarly, some international businesses will wish to maintain a single unified whistleblowing framework across the various countries in which they operate, especially if the Directive comes to be regarded as best practice. It is, therefore, crucial that such businesses have whistleblowing arrangements that are of an appropriate standard and are effective.
Much of the Directive’s content is already covered by UK law, but the EU Directive’s scope of protection goes further than UK law. The aspects of the Directive not currently reflected in the Public Interest Disclosure Act 1998 are as follows:
- a wider scope of individuals who are afforded protection, such as self-employed contractors, volunteers and non-executive directors
- a requirement that employers with fifty or more employees set up internal channels and feedback procedures
- the introduction of standards for how regulators maintain confidentiality, provide feedback and follow up on any disclosures
- implementation of provisions to protect whistleblowers from potential liability, such as breach of confidence, defamation or slander and data protection
- provision of legal aid for whistleblowers seeking to bring employment-related claims
The Future?
In March 2021, the government committed to reviewing UK whistleblowing protections following the publication of data by Protect, the whistleblowing charity. This data revealed that one in four Covid-19 whistleblowers who made contact with its helpline were made redundant between September 2020 and March 2021. To date, however, progress on this front has been slow and the nature of any reforms that will be made remains to be seen.
We Can Help
At Witan Solicitors, we can help you navigate this complex legal area. Our Employment Law Team has a wealth of experience, allowing them to advise you on your whistleblowing scenario. Contact us today by submitting a contact form online or emailing info@witansolicitors.co.uk.
