Whistleblowing reform - some discomfort surrounding the law

31 May 2013

Like many employment lawyers I have been uncomfortable about the law on whistleblowing.  No one can argue with the principle that the exposure of wrongdoing is in the public interest and should be encouraged or that those who do so should be protected.  However, what was a good idea in theory often appeared to have been abused in practice by claimants exploiting the whistleblowing regime for purely personal advantage in cases involving no legitimate element of public interest.

One of the problems with the regime was the decision in Parkins v Sodexho that a worker could rely on a complaint about their own treatment to found a whistleblowing claim and thereby escape both the qualifying period for unfair dismissal claims and the cap on compensation.  In a classic case of unintended consequences this led to some claimants’ lawyers adding a whistleblowing complaint to any unfair dismissal claim no matter how tenuous the “disclosure” on which they relied and irrespective of the complete absence of “public interest” in the matter.

Four main changes to the regime will come into effect on 25 June 2013 under the Enterprise and Regulatory Reform Act 2013:

  1. a disclosure will only now be protected if the worker reasonably believes that it is being made in the public interest;
  2. the disclosure no longer has to be made in good faith;
  3. if the disclosure is not made in good faith compensation can be reduced by up to 25%; and
  4. an employer will now be vicariously liable for a detriment caused by another worker overturning the decision in Fecitt v NHS Manchester (where whistle-blowers were victimised by colleagues rather than by their employer and the employer was not vicariously liable for their actions because the employees themselves could not be personally liable).

Public interest and complaints about a worker’s own treatment

These changes do not necessarily mean the end of Sodexho.  An employee might reasonably believe that a failure by his employer to comply with the terms of his employment contract was a matter of public concern, particularly, but not exclusively, if the employer is in the public sector.  Personally, I do not see why a disclosure should not in the public interest just because is directly affects the worker making the disclosure, and there are clearly cases where it would be unjust to deny the worker a remedy on this basis.  On the other hand, it is hard to see why there is any public interest in the disclosure if the employer’s behaviour does not affect anyone else at all.  Whilst there may be cases where public confidence in the employer is a matter of public interest these cases should be very rare.  Until we have the benefit of case law there will be uncertainty about this and, no doubt, some entirely self-serving whistleblowing claims will still be brought.  Overall, however, I think this is a step in the right direction.

The requirement for good faith

Was it right to do away with the requirement that the disclosure be made in good faith and replace it with a potential reduction in compensation where it was not?  Removing the requirement for good faith was welcomed by Public Concern at Work as off-setting the additional barrier to claims introduced by the requirement that the worker reasonably believe that the disclosure is being made in the public interest.  This replaces one subjective element with another so, overall, the test remains about as complex as it was before.

I am slightly uncomfortable with the idea that a worker who makes a disclosure in bad faith is still (75%) protected but, as this will still only apply where the worker has a reasonable belief that the disclosure is in the public interest, the balance here is probably right.

Detriment by co-workers

An employer is now liable for detriments caused by a co-worker and the co-worker is also personally liable, thus dealing with the Fecitt problem.  The employer has a defence where it took reasonable steps to prevent that behaviour, just as in a discrimination claim.  The co-worker also has a defence where he reasonably relied upon a statement by the employer that the treatment was lawful but, in this circumstance, the employer remains liable.  Again this mirrors the law on discrimination.

We can expect to see individual employees joined in whistleblowing claims just as they are at present in discrimination claims.  Employers should take a good look at their whistleblowing and training policies and at what they are doing in practice to prevent co-workers subjecting whistle-blowers to a detriment.  They will need to ensure that they have an appropriate policy in place, that employees are aware of the policy and that they receive appropriate training.

This is all rather like the steps needed to take advantage of the statutory defence to a discrimination claim but there may be practical differences.  Discrimination stems from treatment based on a protected characteristic which is known about in advance.  In a whistleblowing case the detriment stems from treatment after a protected disclosure has taken place.  One of the issues for employers to consider is what proactive steps they will need to take in response to the protected disclosure to reduce the risk of reprisals from co-workers.

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