What does the law say about whistleblowing?

News that HS2 is considering taking legal action against workers for leaking confidential information throws the spotlight on legislation in this area, says Chris Cook

The new high-speed railway from London to the West Midlands, Manchester and Leeds, known as High Speed 2 (HS2), has been widely discussed since it was originally proposed by the Labour government in 2009.

The project was estimated to cost £56bn and was expected to be completed in 2033. However, in recent months the government has announced it is likely to take until 2040 and costs are more likely to be in the region of £88bn.

In August, the government launched a review of the project and is currently considering whether it should continue and, if so, how. Although the project would create thousands of jobs, HS2 has received significant opposition from residents and MPs as the route passes through their constituencies, and from environmental organisations because of worries about increased carbon emissions. It has also received opposition from its own workers, including concerns raised by a former executive. 

HS2 Ltd, the organisation responsible for the project, has now issued a ‘letter before action’ to workers who raised concerns, stating that it intends to take legal action against them for disclosing confidential information. HS2 says this action was not linked to the review by the government but instead related to confidential information that workers obtained during their employment, which they are prohibited to use, remove or disclose because of the provisions of their contracts of employment.

Workers who obtain confidential information during their employment are generally prohibited from using or disclosing that information following the termination of their employment. However, the Employment Rights Act 1996 renders contractual terms such as this void if the terms seek to preclude staff from making a protected disclosure. Where disclosure of confidential information amounts to a protected disclosure, there can be no breach of any express or implied contractual duties.

However, the Public Interest Disclosure Act 1998 and Employment Rights Act provide protection for workers who report malpractice by their employers or third parties. A person who makes a ‘protected disclosure’ (one made in the public interest that relates to a criminal offence, breach of legal obligation, miscarriage of justice, danger to individuals’ health and safety, damage to the environment or evidence of deliberately covering up information) is protected from being victimised or dismissed if this is done as a result of them raising their concerns. Contractual terms are rendered void if they seek to preclude staff from making a protected disclosure – where disclosure of confidential information amounts to a protected disclosure, there can be no breach of any express or implied contractual duties.

Implications for employers

The HS2 case remains unresolved and unclear at present but, in a broader sense, as employers are prohibited from stopping staff from whistleblowing, they should ensure confidentiality provisions in contracts of employment and severance agreements are drafted in a way that offers the organisation protection from staff disclosing confidential information, while at the same time ensuring they have the right to make a protected disclosure. 

This is easier said than done as, in practice, it may be difficult to draw a distinction between what amounts to confidential information within the remit of a contractual confidentiality clause and what could amount to a protected disclosure.

In addition, employers should ensure they have a formal policy and procedure in place for whistleblowing. This will protect the organisation’s interests, as it should allow employers the opportunity to investigate allegations of malpractice and take appropriate action in a prescribed manner before the disclosure being made to anyone else outside the business.

Lastly, if a member of staff has raised concerns that could amount to a protected disclosure, employers should ensure they do not subject the employee to any disadvantages or detriments as a consequence of this. 

Such detrimental treatment could include a failure to promote, ostracism, bullying or harassment, giving a disciplinary sanction or dismissal. This applies regardless of whether the member of staff is a current or former worker of the organisation. If a former worker is subjected to a detriment by their former employer, such as being provided a bad reference or threatened with legal action, they can still bring a claim for detrimental treatment. 

Employers need to be mindful about the action they take against whistleblowers, as there is no upper limit on the amount of compensation that can be awarded in unfair dismissal or detriment claims under whistleblowing legislation, and such claims can occasionally be of very high value. Significant adverse publicity could also result from such claims should they arise. 

Chris Cook is partner and head of employment and data protection at SA Law