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Fri 30th October 2009
Spies, Secrets and Whistleblowers

Whistleblowing essentially means giving information (usually to the authorities) about illegal and underhand practices.  The Public Interest Disclosure Act 1998 (commonly known as the Whistleblowing Act or "PIDA") has been in force for 10 years now. The Act was passed following a spate of scandals and disasters in the 1980s and early 1990s. Almost every public inquiry found that workers had been aware of the danger but had either been too scared to sound the alarm or had raised the matter in the wrong way or with the wrong person. Examples included the Clapham Rail Crash (where the hidden inquiry heard that an inspector had seen the loose wiring but had said nothing because he did not want to 'rock the boat'), the collapse of Barings Bank (where the regulator found that a senior manager had failed to reveal the infamous 88888 account) and the Arms to Iraq inquiry (where the Scott Report found that an employee had written to the Foreign Secretary to tell him that munitions equipment was being unlawfully produced for Iraq).

A worker will have to show three things to claim PIDA protection: first, that he or she made a 'qualifying disclosure'; secondly, that he or she followed the correct disclosure procedure; and thirdly that he or she suffered a detriment as a result of making the disclosure.   

During difficult economic times there is a particular risk of disclosure related claims from all levels in the workforce. New employees fearing for their own job security may consider that making a disclosure will provide some level of protection should there be subsequent redundancies. Whereas at the other end of the scale senior directors may have genuine concerns regarding the solvency of the business which when raised could also qualify for protection.

The best way for any business to protect itself against claims being made under the whistleblowing provisions is to ensure that it has in place a good policy setting out its commitment to best practice and dealing fairly with any person making a qualifying disclosure. Clearly communicating the policy will be vital and management need to ensure that all staff are aware of its provisions. It will be equally important in practice to make sure that the policy's procedure is followed by those to whom disclosures are made.

There is no cap on the compensatory award which can be awarded under PIDA to an employee dismissed for "blowing the whistle". In one case, a whistleblower who alleged abuse of inmates at Wakefield prison was awarded compensation of £477,600 by Leeds Employment Tribunal after winning a claim for unfair dismissal.

If you require further details about whistleblowing issues or any other employment matter please contact a member of the Employment Team on 01234 400000 or email Asad Rana: arana@pwhmllp.com, Kiall Bagnell kbagnell@pwhmllp.com or Claire Yates: cyates@pwhmllp.com