Whistleblowing Update

Whistleblowing – Why all employers should take heed

We estimate that there will be a spike this year in the number of individuals who blow the whistle at work.  This particularly arises out of the Covid pandemic.  Staff may, for example, have health and safety concerns about returning to work or have concerns about potential mishandling of furlough leave/pay.  There is also the likelihood, with more jobs at risk of redundancy at the current time, that there will be some staff who will blow the whistle in order to give themselves protection from dismissal or to gain a better position to negotiate an exit settlement.

As a result, employers are more at risk of a whistleblowing claim. This is because workers, which includes employees and LLP partners, who blow the whistle are protected under the Public Interest Disclosure Act 1998 (PIDA) if they are suffer a detriment or are dismissed.

In this article, we look at recent case law developments and crucially the steps that employers should take to protect themselves.

Firstly, a reminder of the types of whistleblowing protected by PIDA

To be covered by PIDA, a worker must make a “qualifying disclosure” which requires:

1. The worker must actually disclose information. The mere gathering of information is not enough.
2. The information disclosed must relate to one or more of the following wide categories of wrongdoing: criminal offence, breach of any legal obligation, miscarriage of justice, danger to health and safety of any individual, environmental damage and/or the deliberate concealing of any such information.
3. The worker must have a reasonable belief that the information tends to show one of the categories of wrongdoing.
4. The worker must also have a reasonable belief that the disclosure is in the public interest.

Further, the disclosure must be a “protected disclosure” which relates to the method of disclosure and to whom the disclosure is made.

Recent case law developments

The following interesting recent whistleblowing cases are worth noting because of the clarifications that they provide.

The worker’s reasons for the disclosure

A worker will only have protection under PIDA if they disclose information in the reasonable belief that the disclosure is in the public interest.  However, does raising this in the public interest need to be the worker’s sole motivation?  The answer was confirmed recently by the Employment Appeal Tribunal In Okwu v Rise Community Action Ltd.  Ms Okwu was a charity worker and was accused of poor performance, for which she was ultimately dismissed.  Prior to her dismissal she raised various concerns, including concerns that her employer was breaching data protection laws.  The Tribunal at first instance held that Ms Okwu’s disclosure was not in the public domain as it concerned “personal contractual matters”.  However, the Employment Appeal Tribunal overruled this and held that, even if Ms Okwu had raised those maters in defence of her performance, this did not mean she could not reasonably believe them to be in the public interest.

What is a detriment?

A detriment occurs where a reasonable worker would or might take the view that they have been disadvantaged.  In the Court of Appeal case of Jesudason v Alder Hey Children’s NHS Foundation Trust, it was held that letters sent by the employer to various third parties to  “set the record straight” amounted to a detriment.  Mr Jesudason was a consultant paediatric surgeon at Alder Hey Hospital.  He raised serious concerns over clinical practices at the paediatric department.  He had also raised his concerns with the media.  These concerns were subsequently investigated by the Royal College of Surgeons which concluded that the overall care provided at the department was acceptable, albeit that some areas were lacking and suggestions for improvement were made within the department.  In response the Trust sent letters internally and to the third parties which stated that “each of Mr Jesudason’s allegations have been thoroughly and independently investigated … and found to be completely without foundation.”  This was clearly incorrect as the RCS had suggested improvements.  Mr Jesudason was concerned that the Trust’s letters were damaging to his reputation and amounted to a detriment because he had blown the whistle.  There was no doubt that Mr Jesudason had blown the whistle, and so one of the questions for the Court of Appeal was whether the Trust’s letters amounted to a detriment.  The Court of Appeal held that, whilst the Trust’s motive in sending the letters was to rebut the allegations, it did amount to a detriment to Mr Jesudason.  A reasonable employee would regard the inference that he had made unsubstantiated allegations to be a detriment to his reputation.

Ultimately though, in this case, Mr Jesudason’s whistleblowing claim failed.  The Court of Appeal concluded that, whilst Mr Jesudason had suffered a detriment, this detriment was not because  Mr Jesudason had blown the whistle.  The Trust had not sent the letters in retaliation.  Nonetheless, this is a reminder to employers to ensure that any information being shared with others is accurate and is not influenced in any way by the fact that the worker has made a protected disclosure.

What if the person making the decision to dismiss is not aware that the employee had blown the whistle?

In the recent case of Jhuti v Royal Mail, the Supreme Court determined that Ms Jhuti had been automatically unfairly dismissed even though the person dismissing her was unaware she was a whistleblower. Ms Jhuti had raised concerns to her line manager about regulatory guidance violations.  In retaliation, the line manager subjected Ms Jhuti to performance reviews and produced a misleading report about her performance, which was relied up on good faith by the dismissing manager when deciding to dismiss Ms Jhuti.  The Supreme Court ruled “if a person… determines that she… should be dismissed for a reason but hides it behind an invented reason which the decision-maker adopts, the reason for the dismissal is the hidden reason rather than the invented reason.”  In this case, the real reason for the dismissal was the protected disclosures.  Whilst the facts of this case will be rare in practice, it underlines the importance for employers of ensuring that they have all relevant information before deciding to dismiss, which may include information about disclosures that an employee has raised previously even if those were not upheld or withdrawn.

Potential for a civil claim?

The decision in Rihan v Ernst and Young Global Limited (a civil claim) highlights the perils of ignoring a worker’s concerns and not taking appropriate steps to protect them.  Mr Rihan was a partner at an EY entity in Dubai.  When preparing an audit report on a Dubai gold dealer he uncovered significant non-compliance with international standards.  After Mr Rihan reported these concerns to his firm, he was allegedly pressurised to produce a report favourable to the dealer.  Mr Rihan subsequently resigned.  The High Court held that EY was under a duty to prevent him from suffering financial loss by conducting the audit in an ethical manner, and awarded Mr Rihan $10.8 million in damages for loss of earnings.

Steps to take to avoid whistleblowing claims

Employers will want to avoid whistleblowing claims.  Firstly, the compensation awarded is uncapped.  Second, there are the costs of defending such claims (in time and money) as well as the risks of reputational damage of a public hearing.

As a result, prevention is key. However, we don’t mean by this that you should prevent staff from raising concerns.  On the contrary, staff should know that they can raise a complaint in good faith and have this dealt with promptly and thoroughly without fear of repercussion.  Having a clear whistleblowing policy so that everyone knows how to raise a complaint will assist with this, and also ensure that the business is in control of this process and can monitor all disclosures.  Of course, it will also help the employer to deal with and remedy any issues of wrongdoing quickly which could otherwise harm the business as well as setting clear standards for all staff.

With any policy, it is also important to ensure that key staff – particularly more senior staff – are trained on this and know what they should do if someone raises a concern to them.  Also, having an individual in the organisation identified as a whistleblowing champion can help to ensure that any complaints are directed to this one person.

Some employers may also be concerned about staff making false or malicious accusations.  A clear whistleblowing policy can explain the consequences of when such an accusation is made.

Finally, a word of warning.  When a worker makes a complaint it can often be the individual’s attitude and behaviour in doing so that riles the most for the employer.  Despite the frustrations with the worker’s conduct, it is essential that you (either directly or indirectly) do not retaliate against the worker in any way because he or she has made the disclosure.