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Employment lawLatest NewsWhistleblowing

Whistleblowing and the risk of reputational damage

by Philip Pepper 30 Sep 2024
by Philip Pepper 30 Sep 2024 A whistleblower outside court
Photo: Shutterstock
A whistleblower outside court
Photo: Shutterstock

Whistleblowing is a significant and sensitive issue for companies, with one in 10 UK workers claiming to have witnessed possible corruption, wrongdoing or malpractice at work. Philip Pepper, of law firm Shakespeare Martineau, describes the risks to organisations’ reputation from failure to enforce relevant policies.

An inquiry into NHS Greater Glasgow and Clyde (GGC) is underway after a senior doctor stated that they were encouraged to keep silent over infection control concerns. Dr Redding described a “profound culture of fear and bullying” in relation to whistleblowing, and even claimed that she was urged not to speak out by the board’s chief executive during one stage of the process.

Similar cases occurring in the NHS, for example during the Covid pandemic, have also raised worrying questions regarding the procedures that are used to handle employee concerns. Where concerns are silenced or dismissed, major reputational and financial repercussions can follow, and this most recent case should serve as an important reminder to employers across all sectors to ensure their whistleblowing policies and procedures are up to date.

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Whistleblower protections are enshrined in legislation through the Employment Rights Act 1996 (ERA), which has also been amended by the Public Interest Disclosure Act 1998 (Pida).

These set out the definition of a “qualifying disclosure” made by workers, which is any disclosure of information that, in the reasonable belief of the worker, is made in the public interest and tends to show one or more of the six types of wrongdoing listed in the ERA.

While the intention of the Pida was originally to limit what would amount to a qualifying disclosure, this has been interpreted in practice to have a much wider definition. Once a qualifying disclosure is established, for it to become protected under UK law, it must be reported to a specific list of people which is usually the employer or designated external bodies.

As mentioned, it is essential for any concerns raised to be in the public interest, in order to be considered a qualifying disclosure. In certain sectors, such as the NHS and the wider medical arena, it may be much easier to demonstrate that any disclosure contains the element of public interest due to the nature of the work being carried out. In the case of NHS GGC, for example, concerns of wrongdoing were based on infection control: a topic that undeniably has widespread relevance.

While Pida does not require a positive obligation to implement a whistleblowing policy, there are specific rules for applicable listed companies and certain sectors. Most organisations that operate in the medical, construction or financial sectors, for example, will usually have a policy of some sort in place for whistleblowing procedures. However, as seen at NHS GGC, these policies are not always communicated sufficiently, enforced or followed in practice, leading to legal claims and potentially severe reputational damage.

If a worker is found to have been dismissed as the result of making a protected disclosure, they may be entitled to uncapped financial compensation”

To prevent similar claims and consequences to their business, employers must take action to regularly review their internal procedures surrounding whistleblowing to ensure that they are well established and understood throughout the organisation. The policy should make clear the company’s internal process and highlight the routes available to employees who wish to raise concerns. This could be in the form of a nominated person, team, email address, or even a telephone helpline.

Once policies have been put in place, employers should seek to communicate this clearly on an ongoing basis, to foster a culture of honesty, transparency and understanding and ensure all workers are aware of their right to raise concerns without fear of repercussions. While full disclosure of the worker raising the concern is helpful when conducting investigations based on whistleblowing, employers could also consider options for anonymous concerns to be raised to encourage further openness.

Companies will also benefit from offering internal training to staff to help them better understand and follow whistleblowing procedures, preventing cases of misconduct and mitigating the risk of reputational damage should a case be brought to court. Providing training will ensure that policies remain effective in practice and that the relevant staff, such as HR professionals, are compliant with procedures and knowledgeable on what to do if a concern is raised.

If a worker is found to have been dismissed as the result of making a protected disclosure, they may be entitled to uncapped financial compensation. They also gain protection from any detrimental treatment as a result of the disclosure, which could again lead to legal claims resulting in hefty compensation to the individuals affected.

To prevent cases of whistleblowing progressing to legal action, all employers should be familiar with the legal protections in place for workers”

Employers must consider these legal consequences once a concern has been raised and ensure they stick to their documented internal procedures, communicating openly with the employee to prevent them from feeling isolated or treated differently. Where workers within the organisation are found to have contributed to a culture of fear or bullying that may potentially silence a whistleblower, those involved should be subjected to the usual internal policies to enforce any inappropriate conduct.

To prevent cases of whistleblowing progressing to legal action, all employers should be familiar with the legal protections in place for workers. By implementing policies that consider this, keeping them under regular review and ensuring they are clearly and consistently communicated, businesses can foster a culture of openness and transparency for their workers, avoiding unnecessary legal consequences in the form of hefty financial compensation or long-term reputational damage.

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Philip Pepper

Philip Pepper is employment partner at law firm, Shakespeare Martineau

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