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Rules of disclosure: why employers can't afford to ignore whistleblowers

Written by Adam Pescod on Friday, 08 April 2016. Posted in Employment law, Legal

A number of whistleblowers have been castigated for acting in the public interest. But isn’t it time employers took whistleblowing more seriously?

Rules of disclosure: why employers can't afford to ignore whistleblowers

The likes of Edward Snowden and Paul Moore have put whistleblowing back in the spotlight in recent years. But it was the financial scandals of the early-1990s that really brought the subject to the public’s attention. Off the back of such high-profile events as the Barings Bank collapse, the British government passed the Public Interest Disclosure Act 1998, which was intended to protect whistleblowing employees from detrimental treatment by their employer.

Prior to the law’s passing, workers who reported wrongdoing within their companies could expect a pretty hostile response. “There was a culture of picking on people who blew the whistle or categorising them as disloyal,” says Beverley Sunderland, managing director of Crossland Employment Solicitors. “Whistleblowing legislation was brought in to try and protect those who came forward and said, ‘These things should not be happening and there’s going to be a real problem if they continue.’”

However, despite the name of the Act that governs whistleblowing, it wasn’t until 2013 that a public interest clause was added to the legislation. Under the original version of the Public Interest Disclosure Act, an employee could blow the whistle about a breach of their employment contract. And while workers are now generally precluded from making a claim over such matters, a recent case that’s due before the Court of Appeal in October could swing things back in the favour of employees.

The case in question involves estate agency Chesterton Global and Mohamed Nurmohamed, a former senior sales manager at the company. Nurmohamed claims he was unfairly dismissed after disclosing financial accounts that he believed had been rearranged to result in lower commission payments for himself and 100 other high-ranked employees at the company. The Employment Appeal Tribunal found that his disclosure was in fact in the public interest, a ruling that was subsequently appealed by Chestertons. “What the court ultimately said was that, provided it affects more than just one individual employee, then that should be sufficient to be in the public interest,” Sunderland explains.

Of course, complaints that are unequivocally in the public interest – for example, those relating to suspected criminal activity, environmental damage or health and safety – continue to be protected by whistleblowing legislation. And one would hope they are complaints that any right-minded employer would take seriously. “If you are a business owner and there is something illegal going on in your organisation, you should want to know about it,” says Sunderland. “Business owners need to look at this as yet another tool to help them in running an ethical and legal company.”



Yet things don’t seem to be progressing that smoothly. Sunderland makes reference to statistics from Public Concern at Work, the whistleblowing charity. “They said that 50% of those who called them in 2014 were either dismissed or forced to resign having blown the whistle,” she says.

In large part, this stems from the fact that the Public Interest Disclosure Act doesn’t compel employers to have their own whistleblowing policy. This is something that Sunderland would like to see changed; yet she stresses that any business with an eye on the law should still have it written into their terms of employment. “What an employer needs to do is put together some form of policy that encourages employees to come forward if they think something is going on that shouldn’t be,” she says. “It clearly needs to say: ‘If you come forward with a genuine concern, no action will be taken against you.’”

The challenge for an employer is managing complaints in a way that satisfies the whistleblower while protecting the privacy of other employees. This is particularly important when another employee is the subject of a whistleblower’s disclosure. As Sunderland points out, if an employer decides to take action against other employees as part of their investigation, they would be in breach of the Data Protection Act by disclosing this to the original complainant. “You have to manage the expectations of the whistleblower,” she says. Equally, if a whistleblower requests anonymity, an employer will need to make it clear that this might not be possible. “You have to be careful about promising to keep people anonymous because you might need them to come along to a disciplinary hearing,” she says. “You might need them in court proceedings.”

With MPs recently added to the list of prescribed persons to whom an employee can turn to raise a complaint, Sunderland advises that businesses offer numerous avenues to workers before they’re forced to take matters outside the workplace. “We always suggest to businesses that they give employees somewhere else to go internally if they don’t like the outcome of the investigation,” she says. “This isn’t about cover up; this is about genuinely getting to the bottom of whether you’ve got a problem or not.”

Ultimately, it’s about creating a culture where people feel comfortable about coming forward. “The main thing is to gain the trust of your employees,” says Sunderland. “It’s all very well having legislation but that’s only half the story. Legislation is no good if nobody actually uses it.”

About the Author

Adam Pescod

Adam Pescod

EB's former editor, Pescod was tasked with ensuring these hallowed pages are rich with excellent, engaging and error-free stories, all written with the entrepreneur in mind. Pescod previously plied his trade penning pieces about pubs and pints. He is also a sucker for alliteration. 

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