This note has been updated to deal with the implications of the Enterprise and Regulatory Reform Act 2013.
Whistleblowing: a quick guide
A quick guide to the law on whistleblowing in employment, why it is important, and key strategies for employers and workers.
This is one of a series of quick guides: see Quick guides.
Why is protection of whistleblowers important?
Internal control of risk
Employers have an interest in uncovering wrongdoing or dangerous practices within the organisation, while also managing what information (if any) is spread to the outside world. Encouraging the reporting of these matters through internal channels may help avoid serious accidents, fraud, regulatory breaches or financial scandals. In a listed company, it is part of the obligation under the UK Corporate Governance Code (www.practicallaw.com/2-502-1888) to maintain a sound system of internal control (see Practice note, Effective whistleblowing policies: Listed company requirements (www.practicallaw.com/8-422-5228)).
The law protects whistleblowers whose employer dismisses them or subjects them to detriment on the ground that they have made a protected disclosure (www.practicallaw.com/8-200-3427). Cases can involve significant management time and legal costs, which are usually not recoverable. Such cases are not subject to the usual qualifying period of employment for unfair dismissal claims, or the usual statutory cap on unfair dismissal compensation.
Reputational damage and staff morale
An external disclosure of suspected malpractice, especially to the press, will lead to negative publicity for the employer and damage staff morale. Any claim brought by a whistleblower who believes they have suffered reprisals is likely to have a similar effect. (See Article, Managing a media crisis: preventing reputational damage, PLC Magazine, June 2004 (www.practicallaw.com/7-102-8684).)
Avoiding criminal liability
The Bribery Act 2010, which came into force in July 2011, contains a new strict liability corporate offence that applies where an organisation fails to prevent bribery by a person "associated" with it, including employees (section 7). The organisation has a defence if it can show that it had in place "adequate procedures" designed to prevent bribery. Guidance (www.practicallaw.com/0-505-4865) from the Ministry of Justice stresses that this would include having effective whistleblowing procedures that encourage the reporting of bribery. (For further information, see Bribery Act 2010: toolkit (www.practicallaw.com/9-503-9451) and Practice note, Bribery Act 2010: issues for employment lawyers (www.practicallaw.com/5-504-5185).)
What protection does the law give to whistleblowers?
Protection for whistleblowers was introduced by the Public Interest Disclosure Act 1998 (PIDA), which amended the Employment Rights Act 1996 (ERA 1996) (see Practice note, Whistleblower protection (www.practicallaw.com/8-200-3903)).
The dismissal (including constructive dismissal (www.practicallaw.com/8-200-3106)) of an employee will be automatically unfair if the reason, or principal reason, is that they have made a protected disclosure (section 103A, ERA 1996; see When is a disclosure protected?). The same applies to selection for redundancy.
There is no qualifying minimum period of service, and tribunals are not restricted by the usual upper limit on compensation. Whistleblowing claims are sometimes used tactically for this reason.
It is unlawful for an employer to subject one of its workers (www.practicallaw.com/6-200-3640) to a detriment (including threats, disciplinary action, loss of work or pay, or damage to career prospects) on the ground that they have made a protected disclosure (section 47B(1), ERA 1996; see When is a disclosure protected?). The concept of a "worker" in the whistleblowing legislation is broad and includes, among others, agency workers (www.practicallaw.com/3-200-3024), freelance workers, seconded workers, homeworkers and trainees, as well as employees. (See Practice note, Whistleblower protection: Who is protected? (www.practicallaw.com/8-200-3903).)
On 25 June 2013, the concept of vicarious liability was introduced into the whistleblowing regulations. The act of a worker in subjecting a whistleblower to a detriment is now be treated as having been done by the employer. The employer will have a defence if it took all reasonable steps to prevent the detrimental treatment. (See Practice note, Whistleblower protection: Vicarious liability (www.practicallaw.com/8-200-3903)).
When is a disclosure protected?
There must be a qualifying disclosure of information
The information disclosed must, in the reasonable belief of the worker, tend to show that one of following has occurred, is occurring, or is likely to occur:
- A criminal offence.
- Breach of any legal obligation.
- Miscarriage of justice.
- Danger to the health and safety of any individual.
- Damage to the environment.
- The deliberate concealing of information about any of the above.
(Section 43B(1), ERA 1996.)
Further, section 17 of the Enterprise and Regulatory Reform Act 2013 (ERRA 2013) amended the ERA 1996 so that a disclosure made on or after 25 June 2013 will only be a qualifying disclosure if the worker reasonably believes that the disclosure is "in the public interest".
Good faith requirement removed
Before 25 June 2013, a qualifying disclosure made to anyone other than a legal advisor had to be made "in good faith" for it to be protected. This requirement was removed by section 18 of ERRA 2013.
Internal disclosures protected
PIDA encourages disclosure to the employer (internal disclosure) as the primary method of whistleblowing. A qualifying disclosure to the employer is a protected disclosure. (Section 43C(1), ERA 1996; see Practice note, Whistleblower protection: When is a disclosure protected? (www.practicallaw.com/8-200-3903).)
External disclosures in some circumstances
Responsible third parties. Where the worker reasonably believes a third party (such as a client or supplier) is responsible for the wrongdoing, they can report it to that third party without telling the employer.
Prescribed persons. Parliament has approved a list of "prescribed persons" to whom workers can make disclosures, provided the worker believes the information is substantially true and concerns a matter within that person's area of responsibility. They include HMRC, the Health and Safety Executive and the Office of Fair Trading. There is no need to alert the employer. (See Checklist, Whistleblowing: prescribed persons (www.practicallaw.com/9-202-3378).)
Government ministers. Workers employed by a person or body appointed under statute can report matters to the relevant minister.
Legal advisers. Workers can disclose matters to their legal adviser in the course of obtaining advice.
Wider disclosure. Disclosure to anyone else is only protected if the worker believes the information is substantially true and does not act for gain. Unless the matter is "exceptionally serious", they must have already disclosed it to the employer or a prescribed person, or believe that, if they do, evidence would be destroyed or they would suffer reprisals. Disclosure to that person must also be reasonable.
Practical steps to reduce business risk
- Implement a whistleblowing policy setting out procedures by which staff can confidentially report concerns about illegal, unethical or otherwise unacceptable conduct. Ensure that it enables the worker to bypass the level of management at which the problem may exist. (See Practice note, Effective whistleblowing policies (www.practicallaw.com/8-422-5228) and Standard document, Whistleblowing policy (www.practicallaw.com/1-200-2049).)
- Publicise the policy internally and train management in its principles and operation. Make it clear that victimisation of a whistleblower will lead to disciplinary action.
- Investigate disclosures promptly, and keep the whistleblower informed as to the progress where possible. Silence or apparent inaction may lead the whistleblower to become suspicious and make a disclosure externally.
- Do not rely on confidentiality clauses to prevent external disclosures, as they are unenforceable if the disclosure is protected (section 43J(1), ERA 1996). Taking action against a whistleblower for breach of confidence may amount to unlawful detriment. (See Practice note, Whistleblower protection: Confidentiality and whistleblowing (www.practicallaw.com/8-200-3903).)
Guidance for whistleblowers: staying within the law
- Genuine concerns about illegal, unethical or dangerous practices should usually be raised internally in the first instance. Check if the employer has a whistleblowing policy. Ask for the matter to be treated confidentially.
- Information can be given to a statutory regulator (or other "prescribed person") without telling the employer. (See Checklist, Whistleblowing: prescribed persons (www.practicallaw.com/9-202-3378).)
- Wider disclosure is more difficult to justify. In practice, disclosure to the media will only be protected in exceptional cases, and only if no payment is received for the story. (See Practice note, Whistleblower protection: Wider disclosure (www.practicallaw.com/8-200-3903).)
- Disclosures made on or after 25 June 2013 will only be protected if the worker reasonably believes that the disclosure is "in the public interest". (See Practice note, Whistleblower protection: Disclosures made on or after 25 June 2013: the public interest test (www.practicallaw.com/8-200-3903).)
- Contact Public Concern at Work (www.practicallaw.com/9-200-2738) on 020 7404 6609 for free independent advice. Some employers also provide a confidential whistleblowing helpline.
- Whistleblower protection (www.practicallaw.com/8-200-3903).
- Effective whistleblowing policies (www.practicallaw.com/8-422-5228).
- Anti-corruption policies (www.practicallaw.com/9-502-3153).
- Flowchart: protected disclosures (www.practicallaw.com/4-202-3205).
- Whistleblowing: prescribed persons (www.practicallaw.com/9-202-3378).