The report describes whistleblowers as the first line of defence against crime, corruption and cover ups, and so play an important role in business and in wider society, but says existing regime ‘has failed in its most important role – to protect the whistleblower’.
The report suggests the current legal framework is excessively complex and that, in practice, individuals are either discouraged from raising concerns at work or, if they do, they put their career, finances and mental health at risk. Indeed, they ask whether it is right ‘to place the social and economic burden on the whistleblower’, as opposed to the recipient of the complaint.
Whether or not a government will overhaul the existing regime is uncertain, but if the report’s recommendations are implemented, they would place a greater administrative burden on employers and seek to make whistleblowing complaints easier to make. The report’s recommendations include:
Widening the definition of 'whistleblower'
In many whistleblowing cases, there is a lengthy and technically complex preliminary dispute over whether or not the individual actually blew the whistle in the first place. The current legal framework allows employers numerous opportunities to challenge the individual’s entitlement to whistleblower protection.
The report recommends a widening of the definition, in particular that it extends beyond criminal/unlawful acts to ‘any harmful violation of integrity and ethics’. The idea behind this is presumably to make it easier for an employee to claim protection. However, the widening of the definition might only widen the scope for these preliminary disputes – for example, just as there are currently hard-fought arguments about whether an alleged whistleblower made a disclosure ‘in the public interest’, an overhauled regime might introduce extra lines of argument over whether or not the alleged violation was sufficiently ‘harmful’ to merit protection.
Addressing ‘inequality of arms’
Although there is no statutory cap on what an employment tribunal can award in whistleblowing claims, the report suggests that compensation for claimants is not sufficiently ‘meaningful’ and does not cover a whistleblower’s ‘actual costs and losses’.
Parties in the tribunal are usually responsible for their own costs. This means a well-resourced employer can often increase a claimant’s costs by overwhelming them with correspondence and documents or engaging in some of the preliminary arguments referred to above.
Given there is no cap on compensation, and tribunals can (albeit rarely) make punitive awards of aggravated or exemplary damages, it is unclear what further change the report envisages. It might, however, involve requiring tribunals to make higher compensation awards to cover the risk of future career loss to a claimant.
Another potential change could be to the costs regime, through which employers would be at greater risk of paying the whistleblower’s costs if they lose a claim, especially if they engage in cynical litigation tactics along the way. This might be a more effective way to address concerns over inequality of arms, but would be a significant, and unlikely, change from the usual tribunal rules.
Even if implemented, the change fails to address the underlying issue and may lead to claimants introducing speculative whistleblowing allegations into other claims to gain costs-protection. Respondents would no doubt contest this fiercely, and the arguments which would then be fought may undermine any attempt to address inequality of arms.
A more prescriptive framework
The report recommends a better regulatory framework and coordination to include the introduction of international best practice. Specific recommendations include the establishment of an Independent Office for the Whistleblower with real power to set standards, enforce the protections, and administer meaningful penalties not only to organisations but also individuals. It also calls for a public awareness campaign.
This might involve an extensive regulatory and compliance overhaul across industries, similar to the recent introduction of GDPR. Employers may be required to ensure they not only have shown compliance through policies, but also through substantive steps such as risk assessments and staff training. The increase in public awareness might also see an increase in whistleblowing complaints.
Tougher restrictions on NDAs
The report calls for the banning of non-disclosure agreements (NDAs) in whistleblowing cases. Confidentiality may also be in a claimant’s interests, and indeed might be requested by a claimant in negotiation. Therefore, an outright ban of NDAs might not meet the report’s aim to protect whistleblowers. However, just as the use of NDAs in employment settlement agreements have come under increased scrutiny recently, one can expect any new regime would seek to make it harder for employers to bury complaints through NDAs.
The report is a preliminary step in any change to the whistleblowing framework. Much will turn on the exact details of any eventual legislation and this will depend on the political party responsible for passing that legislation.
Charlie Thompson is a senior associate in the employment team at Harbottle & Lewis