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Whistleblower complaints and how to deal with them
29/04/2021
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Whistleblower
Authors
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Ed Mills
Ed Mills is the head of employment at Travers Smith
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Anna West
Anna West is knowledge counsel at Travers Smith

Whistleblowing complaints have been on the rise since the start of the pandemic. According to Protect, the UK whistleblowing charity, there was a 37% increase in whistleblowing reports during March to September 2020 compared with the same period in 2019.

Businesses could be facing more whistleblowing reports as workers start to return to their workplaces over the coming months. What is the legal position, and what practical steps can employers take to prepare for and deal with whistleblowing complaints?

The legal landscape

In the UK, there is no legal requirement to have whistleblowing procedures in place, although most employers do (for the reasons discussed below). The exception is the financial services sector, where Financial Conduct Authority rules require certain firms to have whistleblowing processes, as well as a whistleblowing champion with responsibility for the arrangements.

The UK approach contrasts with that of the EU whistleblowing directive (to be implemented in December 2021), which requires employers with 50 or more employees to establish internal whistleblowing channels and procedures. (See text box for more detail.)

EU WHISTLEBLOWING DIRECTIVE
- The directive applies to workers, self-employed individuals, shareholders, contractors and subcontractors, former employees and workers, as well as job applicants. The key requirements are that:
- employers with 50 or more employees must establish internal channels and procedures for whistleblowers to make a report and for the employer to follow up;
- reporting channels must be secure and ensure the whistleblower’s identity is kept confidential;
- whistleblowers must be given feedback by the employer within three months;
- the whistleblower’s identity cannot be disclosed without their explicit consent; and
- whistleblowers will be entitled to compensation if they suffer retaliation and will be immune from civil liability relating to their use of information (e.g. confidentiality claims).

In the UK, employees and workers are protected from detriment or dismissal for making a whistleblowing disclosure to their employer (or a regulator), and there is no limit on the amount of compensation that can be claimed. (See text box for more detail.)

Compensation is almost entirely based on financial loss and there are no punitive damages as there may be in some jurisdictions. There is also no bounty payment available to UK whistleblowers as there is in some countries, such as the United States and Canada. However, whistleblowing claims can be costly, both financially and in terms of potential reputational damage.

UK WHISTLEBLOWING LAWS
- A person blows the whistle if they make a disclosure which is about a criminal offence, breach of a legal obligation, miscarriage of justice, risk to health and safety or to the environment, or a cover-up of any of these; and in the public interest; and made to their employer or legal adviser or relevant regulator (known as a “protected disclosure”).
- It doesn’t matter if the whistleblower is motivated by their own personal interests, as long as the disclosure is also in the public interest.
- Factors relevant to whether a disclosure is in the public interest include the identity of the organisation, the nature of the wrongdoing (including whether it was deliberate), and the numbers affected.
- A person dismissed for whistleblowing may claim compensation for their losses, with no cap on the amount they can claim.
- A person subjected to a detriment that is not dismissal (e.g. a disciplinary warning or forfeited bonus) can claim compensation for loss and also for injury to feelings (between around £900 and £45,000).
- A whistleblower can bring a claim against an individual colleague or manager for whistleblowing detriment.
- A whistleblower can claim interim relief for salary to be paid by their employer up to the date of the hearing.

Handling whistleblowing complaints

An increasing number of employers are taking a proactive approach to whistleblowing, and actively encouraging a “speak up” culture. As well as allowing employers to address concerns at an early stage, this is also an important element of diversity and inclusion.

Some organisations have seen historic #MeToo and #BlackLivesMatter type issues come to light recently, which were not raised at the time for fear of speaking up, and employers want to avoid this happening in the future. In the financial services sector, specifically, creating a culture of openness is seen as a key part of reducing the risk of scandals historically seen in the industry.

So what sort of steps can employers take to develop a successful “speak up” culture?

All employers should have a whistleblowing or “speak up” policy stating the employer’s commitment to a culture of openness and including:

  • an explanation and examples of the types of issues that can be raised through whistleblowing channels;
  • details of internal whistleblowing channels, and ideally also an external channel, and details of any relevant regulator;
  • how the employer will investigate and respond to complaints; and
  • assurances that whistleblowers should not suffer any adverse consequences and any retaliation will be a disciplinary matter.

Training on whistleblowing procedures is a key part of creating a successful speak-up culture. A survey by Protect found that although 93% of employers had whistleblowing arrangements in place, only 43% of employees were aware of a whistleblowing policy at work.

It is essential to train managers and other senior staff, who are likely to be the ones receiving complaints, on how to respond and how to recognise and prevent retaliation. It is also advisable for all other employees to have training in the policy so that they understand how to raise concerns and feel supported to do so. It can work well for staff at all levels to be trained together (with an additional separate session for managers on manager-specific issues).

Some whistleblowers choose to raise concerns anonymously, which can make the investigation difficult because the employer may not be able to go back to the whistleblower for further information, or the whistleblower may be reluctant to divulge more for fear of revealing their identity. While an anonymous disclosure is better than not speaking up at all, it is worth making clear in policies and training that investigations might be limited in some circumstances, and encouraging employees to provide as much information as possible.

If an employee asks that their identity is kept confidential, this can put the employer in a difficult position because it might become clear to others during the course of the investigation who the whistleblower is because of the detail of the complaint. Again, employers should be clear in the policy and training that, although they will do what they can to protect confidentiality, it cannot always be guaranteed.

If an individual raises a whistleblowing concern then never hears anything in response, they might assume that nothing has been done, and confidence in the procedure can be quickly undermined. Employers should provide feedback to whistleblowers as far as possible. Even if they cannot give details of the investigation for confidentiality reasons, they can at least confirm that an investigation is underway, and afterwards that it has concluded and appropriate action has been taken.

Maintaining a dialogue is important, in particular, to encourage the whistleblower to report any concerns about retaliation. Some larger employers report annually to staff on the number of concerns that have been reported through their whistleblowing channels, and the fact that they have been or are being addressed, which shows employees that raising concerns does make a difference.

The future for whistleblowing

Whistleblowing is increasingly being seen as a board issue partly due to a new corporate governance regime for listed companies, but the topic is also high on the agenda for private sector businesses.

Following Brexit, the UK is not obliged to implement the EU whistleblowing directive (and already has laws that satisfy much of the directive, although in some places the directive goes further than UK legislation). However, the UK government is reportedly reviewing whistleblowing laws, and separately an All-Party Parliamentary Group has made a number of recommendations aimed at improving protection for whistleblowers.

It would not be surprising if we saw a strengthening of the current whistleblowing regime as a result of these initiatives, particularly given the increase in reports and the spotlight on whistleblowing in the wake of the pandemic.