Whistling in the dark
Helen Cookson explores the reform of the whistleblowing legislation introduced by the Enterprise and Regulatory Reform Act 2013 (ERRA) and considers how social housing providers should respond
Few of us would quibble with the intention of the Public Interest Disclosure Act 1998 (PIDA). It introduced, for the first time into UK employment legislation, specific protection for employees who identify potential illegality, health and safety or environmental concerns in the workplace.
The legislation was a response, at least in part, to the Zeebrugge disaster and similar incidents where members of the ordinary workforce had been aware of real public dangers but had been too afraid to speak out. It works by allowing an employee to make a ‘disclosure’ from a specified list of issues. Provided an employee made their disclosure in good faith they could not be subject to a detriment or dismissal as a result.
The problem came with the translation of the principles to the legislation and in particular the inclusion of ‘breach of a legal obligation’ in the list of potential disclosures. In 2002 the Employment Appeal Tribunal held that this wording was wide enough to include an alleged breach of a private contractual obligation in a contract of employment. The significance was not lost on claimants’ lawyers. Whistleblowing is treated as a form of discrimination so damages are uncapped and there is no minimum qualifying service requirement.
The practical experience
However well intended the legislation, as is often the case the practical experience was very different. Over the years our team has dealt with stream of whistleblowing allegations and a number of tribunal claims against housing associations. None of the whistleblowing concerns seemed to raise genuine concerns and none of the tribunal claims have succeeded. Whilst that experience is anecdotal, there is little doubt that protection introduced for the best of intentions has been exploited for ulterior motives; our experience is reflected in wide ranging criticism of the legislation, in particular about unmeritorious claims alleging detriment linked to a grievance about a private contractual dispute such as bonus pay.
This criticism sparked the recent reform. Following the EERA only disclosures that the whistleblower ‘reasonably believes to be in the public interest’ will be protected. Does this solve the previous draftsman’s failing? Only time will tell. We are not yet sure what ‘in the public interest’ means. Some private contractual disputes may
be regarded as matters of public interest, if, for example, the employer is a publicly funded body like a registered social landlord. However, the reform has been broadly welcomed by weary employers.
There are other changes too in the ERRA. The question of good faith had also proved problematic in practice. If an employee was prompted partly by a desire to seek compensation but the matter raised showed wrongdoing by an employer did it matter what the employee’s motive was? The Government has chosen to address this conundrum by removing the requirement of good faith. This does cause concern. How is an employer to respond to a complaint that seems to have been made maliciously? An employee must ‘genuinely believe’ in their allegation so an employee who acts dishonestly, knowing their allegation is not true, would not be covered, but further investigation of motive will only be relevant to compensation. For employers this will require investigation of belief, perhaps even more difficult than investigating motive. We will hope for robust and sensible judgments from the tribunals.
So what action is required in response to legislative reform to date?
Registered social landlords will have whistleblowing policies in place as part of good governance arrangements but these may not reflect the recent legislative changes. Now is a good time to review those policies against the reform outlined above. Policies should stress the need
for public interest and it may be useful to include examples. Employers can feel more confident in referring employees who wish to pursue personal disputes to their grievance policy instead.
At the same time as reviewing the policy it will be sensible to look at the guidance given to managers and staff alike. A good public interest disclosure policy, embedded in the right way, can form the bedrock of good governance. It is right that genuine concerns can be safely aired but whistleblowing allegations falsely made can be damaging to an organisation. Good training can help ensure that staff understand what policies are meant to cover and can help discourage abuse.
Helen Cookson is a senior associate at Trowers & Hamlins, tel: 0161 838 2081, email: HCookson@trowers.com