Whistle-blowing rules can protect firms from action

Companies
can avoid a blaze of negative publicity if they address employees’ concerns
internally, By Professor David Lewis

Early
next month, the Public Interest Disclosure Act 1998 will have been in force for
two years. Although this legislation does not give a legal right to blow the
whistle, it means staff who make a "protected disclosure" can
complain to an employment tribunal if they are dismissed for doing so.

The
legislation introduced a new section into the Employment Rights Act 1996, and
although employers are not forced to have a whistleblowing procedure, it sets
out clear benefits to those who have them.

According
to charity Public Concern at Work, unless there are effective procedures in
place that demonstrate your organisation’s willingness to listen and address
concerns, employees are more likely to take their concerns outside – and to be
protected by the Act in doing so.

Employers
with good whistleblowing policies and procedures are less likely to be exposed
to claims under the Act.

So
how have employers and trade unions responded?

A
survey last year of 600 colleges and universities in England and Wales,
conducted by researchers at Middlesex University, revealed that 91 per cent of
respondents have a whistleblowing procedure.

An
earlier survey of 57 private and 57 public-sector organisations carried out by
Industrial Relations Services and Public Concern at Work found that 46
organisations have, and 44 intended to introduce soon, a whistleblowing policy.

Public-sector
employers were more likely than those in the private sector to have a policy or
have plans – 95 per cent compared with 63 per cent in the private sector.

Reflecting
the fact that trade unions are more likely to be recognised by public-sector
than private-sector employers, 34 public-sector employers in the IRS/PCW survey
involved a trade union representative in formulating a whistleblowing policy,
compared with eight private-sector organisations.

In
the Middlesex University survey, 78 per cent of respondents indicated that a
trade union was consulted about the introduction of a whistleblowing procedure.

The
employment tribunal case of Antonio Fernandes, who was awarded £293,441
compensation, illustrates the potential impact of the legislation.

Fernandes,
a chief financial officer, had suspicions about expenses claims, and was
dismissed after sending a letter and supporting documents to members of the
management board.

Fernandes
obtained interim relief and an order for continuation of his contract pending a
tribunal hearing.

The
tribunal found him to have been unfairly dismissed for making a protected
disclosure and was of the view that the 58-year-old would not secure similar
work in the future. He was therefore entitled to be compensated for losses up
to retirement age.

But,
so far, there have been no reported decisions of the Employment Appeal
Tribunal. One reason for the dearth of reported cases may be that employers are
reluctant to go to a hearing where allegations of wrongdoing may be publicly
aired.

In
my view, it is also likely that both employers and workers are ignorant of the
legislation.

One
way of dealing with this would be for Parliament to fund a Public Interest
Disclosure Agency. Such a body is needed to educate people about the legitimacy
of reporting concerns in a democratic society and to ensure that advisory and
counselling services are available.

David
Lewis is professor of employment law at Middlesex University. He will be
speaking at a one-day conference on the whistleblowing legislation on 3 July in
London. For more information contact IRS, tel: 020-7420 3500, e-mail: conferences@irseclipse.co.uk

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