How the new rules of whistleblowing will affect businesses

Major changes to legislation protecting workplace whistleblowers have significant implications for employers. Roger Spence, employment law partner at Harrison Drury solicitors, discusses the main issues for businesses.

Whistleblowing is the reporting of a suspected wrongdoing at work and employees have automatic legal protection against unfair dismissal if they are fired or if they are less favourably treated after making a ‘protected disclosure’ which includes:-
  • health and safety risks
  • damage to the environment
  • criminal offence by an employer
  • a company failing to honour its legal obligations
  • covering up a wrongdoing
The public interest ‘elephant in the room’

On 25 June 2013 an extra test for protected disclosures was introduced. This means whistleblowers must now show that they ‘reasonably believe’ their disclosure is in the ‘public interest’ – a term not defined in law.

This lack of a definition is less of an issue for employers than might be imagined because the crux of the matter is whether whistleblowers can establish that they had a ‘reasonable belief’ that they acted in the public interest.

In cases where the public interest is in doubt, the general consensus is that the ‘elephant test’ will be applied by the courts– in other words, ‘you will know it if you see it’.

In good faith?

Another major change is that employees no longer need to make disclosures in ‘good faith’. Although there has been some concern among employers about the abolition of this requirement, tribunals can penalise the whistleblower by now reducing compensation by up to 25 per cent if the disclosure was not made in good faith.

It should also be kept in mind that employees will still be encouraged to broach issues firstly with their employer.

Just as importantly, protection for broader disclosure – notably going to the media – is only available if the issue is very serious, or if the whistleblower has already made a disclosure to their employer or a ‘prescribed person or body’, for example HM Revenue & Customs or the Serious Fraud Office.

The need to consider victimisation

The new law additionally means employers will be indirectly or ‘vicariously’ liable if other workers victimise a whistleblower. This aligns the law in this area with general discrimination law where employers are held responsible for the acts of their workers.

Good news or bad news for employers? Although time will tell, the new rules place an additional hurdle in the way of whistleblowers as they must establish they reasonably believe the disclosure is in the public interest. To that extent the changes are not entirely unwelcome for employers – and may in fact create a more efficient and transparent legal framework.