Employment highlights - An update on protection for whistleblowing

The Public Interest Disclosure Act 1998 (“PIDA”) came into force on 2nd July 1999 and provides protection for workers who report malpractices by their employers or third parties. There has been a steady rise in cases due to a growing awareness of the legislation and a change in workplace culture. This, combined with the fact that there is no financial cap on compensation in whistleblowing claims and no requirement for a minimum period of service, means that whistleblowing has become a fertile area for employment litigation. Since the introduction of PIDA, there have been many cases concerning its interpretation. This edition of Employment Highlights looks at the approach taken by the courts in recent decisions and what steps employers should take in relation to whistleblowing claims.

PIDA inserted new legislation into the Employment Rights Act 1996 (“ERA 1996”). It creates two levels of protection for whistleblowers. Firstly, the dismissal of an employee is automatically unfair if the reason or principal reason for the dismissal is that they have made a “protected disclosure”. The provisions also protect workers from being subjected to any detriment on the ground that they have made a protected disclosure.

A protected disclosure is a “qualifying disclosure”, made in good faith, to an employer, regulator, legal adviser, minister or other responsible or prescribed person about a dangerous or illegal activity or omission which satisfies certain conditions. For there to have been a qualifying disclosure, the worker must have made a disclosure of information; the information must relate to one of six types of "relevant failure"; and the worker must have a reasonable belief that the information tends to show one of the relevant failures.

In order for the protection afforded by PIDA to apply, the disclosure must be made by a worker. The definition in the Act extends further than the definition of worker in the other employment legislation. It will also extend to agency workers, home workers and certain National Health Service practitioners such as doctors, dentists, pharmacists and trainees who would not fall within the usual definition.

In the case of Elstone v BP plc UKEAT/0141/09, the Employment Appeal Tribunal held that a worker can pursue a whistleblowing claim against their current employer based on a protected disclosure they made while working for a previous employer. In that case, Mr. Elstone had been employed by Petrotechnics in the petrochemical industry from February 2006 until June 2008. During that time he oversaw safety processes and procedures for a number of clients, including BP. Whilst employed by Petrotechnics he made a series of protected disclosures to two senior employees of BP about safety issues. Following his dismissal by Petrotechnics he was subsequently engaged as a consultant to BP. However, he was later told by BP that it was no longer prepared to engage him as a result of his earlier disclosures. He therefore alleged that he had been subjected to a detriment as a result of the protected disclosure made whilst employed by his former employer. The EAT held that the legislation does not specify that the employer at the time of the disclosure must be the employer against whom the whistleblowing claim is eventually made. Applying a purposive approach to the legislation ensured proper protection for the employee.

In order for there to be a qualifying disclosure the worker must have made a disclosure of information, the information must relate to one of six types of relevant failure and the worker must have a reasonable belief that the information intends to show one of the relevant failures.

What constitutes information was considered in the case of Gedald v Cavendish Munro Professional Risks Management Limited [2010] IRLR 38. The issue was whether the contents of a solicitor’s letter amounted to a qualifying disclosure. The EAT held that there was a distinction between communicating information, which would be protected, and making an allegation which does not convey necessary facts and therefore is not protected. On the facts of that particular case the solicitor’s letter contained only an allegation and a statement as to the employee’s position communicated in the course of negotiations between the parties and therefore was not a protected disclosure. 

Even if there has been a disclosure of information this will only amount to a qualifying disclosure if, in the reasonable belief of the worker it tends to show that one of the six specified types of malpractice has taken place, is taking place or is likely to take place. The categories of wrongdoing covered by the legislation are criminal offences, breach of any legal obligation, miscarriages of justice, danger to the health and safety of any individual, damage to the environment, and the deliberate concealing of information about any of the above. The Court of Appeal held in Babula v Waltham Forest College [2007] ICR 1026 that as long as the whistleblower was reasonable in his belief he did not have to be right. The employee believed that his disclosure showed an offence of incitement to commit racial hatred. However, the incident involved religious hatred which did not amount to a criminal offence. The Court of Appeal held that provided the employee’s belief is reasonable the fact that the belief is wrong or that it does not in law amount to a criminal offence, does not deprive the whistleblower of protection.

Currently, there is no specific requirement that a qualifying disclosure must be made in the public interest (as held in Parkins v Sodexho [2002] IRLR 109), meaning that workers who blow the whistle about breaches of their own employment contract can claim breach of a legal obligation and are protected. This is contrary to the intention of the legislation. The government has just published the Enterprise and Regulatory Reform Bill which includes an amendment to the whistleblowing provisions which will require that a disclosure be made in the public interest, as well as in the reasonable belief of the worker making the disclosure.

In order to qualify for the protection under the Act, the qualifying disclosure must be a protected disclosure. This will depend on the identity of the person to whom the disclosure is made and on other conditions having being satisfied.

The legislation encourages internal disclosure to a worker’s employer provided that the disclosure is made in good faith, but also permits external disclosure to certain prescribed persons such as legal advisers, ministers of the crown, and regulatory authorities as long as further conditions are met. In practice most qualifying disclosures are made to the employer.

Disclosures can also be made to bodies outside those listed above, for example to the media. There are rigorous conditions for such wider qualifying disclosures to be protected: the worker makes the disclosure in good faith; reasonably believes that the information disclosed and any allegation contained in it are substantially true; does not make the disclosure for the purposes of personal gain; and has either previously disclosed substantially the same information to their employer. The employee must also reasonably believe at the time of the disclosure that he will be subject to a detriment by the employer if the disclosure is made or that material evidence will be concealed or destroyed.

One such disclosure was made in the case of Good v Marks and Spencer UKEAT/0442/09, in which the claimant was concerned about proposals to change the company’s discretionary enhanced redundancy terms. He had complained to his line manager and, at the same time wrote a letter to the Times newspaper. The claimant was dismissed and he claimed that the reason for his dismissal was for making qualifying disclosures to The Times and to his line manager. The employment tribunal and the EAT held that neither the statement to the line manager nor the letter to The Times constituted a protected disclosure. The statement to the line manager was merely a statement of the claimant’s state of mind and was therefore not a disclosure of information. With regard to the statement to The Times, the EAT held that the disclosure had not previously been made in substantially the same form to the employer. It also held that the claimant did not have the requisite reasonable belief that the employer was likely to fail to comply with the legal obligation.

Liability under the Act arises where the worker has either been dismissed or been subjected to a detriment by their employer for making a protected disclosure. The Court of Appeal in NHS Manchester v Fecitt and others [2012] IRLR 64 (CA) considered the causation test in whistleblowing detriment cases and also whether an employer can be vicariously liable under the whistleblowing legislation.

In this case, three experienced nurses raised their concerns about the qualifications of another member of staff. It was accepted that it was proper to have done so and that the disclosures fell within the definition of protected disclosures. However, as a result of making the disclosures the claimants were subjected to hostile and unpleasant acts by other members of staff who supported the colleague. The claimants raised grievances which were only partially investigated but, as a result, two of the claimants were re-deployed and a third claimant was not given any more work as a bank nurse. The claimants complained to the employment tribunal that they had been subjected to a detriment as a result of making protected disclosures.

There was no dispute about the fact that the nurses had suffered detrimental treatment nor that they had made protected disclosures. The issue was whether there was a causal link between the two. The Court of Appeal felt that the test to be applied was whether the making of the protected disclosure materially influenced (meaning more than had a trivial influence on) the employer’s treatment of the whistleblower. In this case, the Employment Tribunal had clearly been satisfied that the reasons given by the employer for acting as it did were genuine and the fact that the claimants had made protected disclosures had no influence on its decision.

In addition, in order to succeed in their claims, the claimants would have to show that the employer was vicariously liable for the acts of the other individuals. There had been no suggestion that the employer itself had encouraged staff members in their actions. The liability under the legislation arises where the worker has been subjected to a detriment by the employer. This is an important distinction from the approach in other discrimination legislation whereby the employer is liable for detriment caused to one worker by another worker in the course of employment. There are no equivalent express provisions in relation to claims of victimisation on the grounds of making protected disclosures. In addition the Court of Appeal held that it is not possible to rely on common law vicarious liability under the whistleblowing legislation for acts of employees in the course of their employment. Vicarious liability arises where the employer is liable for the wrongs of employees, but only where the employees themselves have committed a legal wrong. Since the colleagues had not been guilty of contravening any legislation and therefore had not been committing any legal wrong, their employer could not be held vicariously liable for their actions. Obviously, the employer’s act or omission in failing to prevent the reprisals by colleagues or failing to address the grievance about reprisals which have happened may itself amount to a detriment. However on the facts of this case this was not the situation.

On the day of the court’s judgement, Public Concern at Work, the whistleblowing charity, called for a government review of the legislation to ensure that whistleblowers in such a situation are protected. It was concerned that the ruling would mean that an employer who does not do enough to protect staff can hide behind their own inaction. It also considered that if the law allows such actions then workers would remain silent rather than blowing the whistle in the public interest. Interestingly, on 18 October 2011, the Department of Health announced that changes will be made to the NHS constitution to ensure that NHS staff who raise concerns about proper patient care receive greater support.

Public Concern at Work have indicated that a large number of whistleblowing claims never reach tribunal but are settled by the parties. Employers are often concerned about any allegations (even those unfounded) resulting in adverse publicity. Employees on the other hand may be concerned about being labelled as “troublemakers” and this affecting their future employability.

From an employer’s point of view it is useful to have in place a written whistleblowing policy. If employees are encouraged to report concerns at an early stage it will tend to lead to less public disclosures and risk to the employer’s reputation. In addition, having a whistleblowing policy in place may assist an employer to show that they have taken "adequate measures" to prevent bribery in the workplace. Such a policy can make it clear that workers are confident that they can raise any matter with the employer in the knowledge that it will be taken seriously, treated as confidential and that no action will be taken against them.