Specialist Lawyers Explain Why Whistleblowing Law Is Unlikely To Stand Still

Céline Winham and Deborah Casale from our employment law team discuss potential legislative reform and provide insights from recent case law. 

Current proposals before Parliament, in the form of the Protection for Whistleblowing Bill, a Private Members’ Bill, seek to reform existing whistleblowing law by repealing PIDA (incorporated into Part IVA of the ERA) and replacing it with a new Act of Parliament that creates an Office for the Whistleblower (OWB) and a new tribunal system. A fund would be maintained to assist whistleblowers and provide financial redress to those whose careers have been harmed. This formed the subject of Elizabeth Gardiner’s excellent article in the September/October ELA briefing.

Protect, the whistleblowing charity, has published its response to the Bill, voicing some reservations surrounding the repeal of PIDA. Its alternative proposals for reform and the extension of whistleblowing protection can be found here and make for interesting reading.

The first reading of the Bill took place on 13 June 2022 and the second reading on 2 December 2022, both in the House of Lords. There is no further date scheduled for the next stage of the Bill so watch this space for further developments. The Bill is unlikely to progress without government support (which at this stage does not appear forthcoming).

Meanwhile, although there is no indication that the UK will adopt the EU Whistleblowing Directive (and the government has provided no comment on the matter), it is listed to be scrutinised by the European Scrutiny Committee. It remains to be seen whether the UK will adopt any of its provisions so as not to be left behind the EU. The Directive will of course remain relevant to employers who operate across Europe – some may choose to adopt its provisions on a global basis to ensure a uniform approach

Jhuti v Royal Mail

In October 2022, the remedy was awarded in the well-known whistleblowing detriment and automatic unfair dismissal case of Jhuti v Royal Mail, first heard in 2015 and eventually determined by the Supreme Court in 2019. In that case, it was held that the knowledge and motive of someone influencing the decision maker in relation to an employee’s dismissal is relevant and can be imputed, even where the decision maker was acting in good faith when relying on the tainted information.

The Claimant was successful in five whistleblowing detriment claims and automatic unfair dismissal following her disclosures in relation to bonus fraud at the Respondent. The detriments included bullying, harassment and intimidation, being placed on a sham performance plan and the deliberate delay in providing a grievance/dismissal appeal outcome by the Respondent.

In relation to remedy, the pandemic was cited by the Respondent as the reason for the delay. However, the Tribunal did not accept this and awarded the Claimant over £100,000 in compensation including £40,000 for injury to feelings, £55,000 for personal injury and £12,500 in aggravated damages (the compensation for loss of earnings was left to be agreed between the parties). Aggravated damages were found to apply, as it was held that the Respondent’s conduct had been high-handed, malicious, insulting and oppressive.

The award hit the headlines due to the level exceeding £100,000 and is a reminder to those advising employers to advise their clients on the proper implementation of whistleblowing policies and the training of staff. Regardless of whether employers are promoting a ‘speak up’ culture, if the internal processes are not working in practice, they may end up paying out for not having properly identified a whistleblower (rather than just deeming them a ‘troublemaker’ as is often the case). Advisers should also consider whether the employee is being treated with due care and understanding throughout the proceedings.

Those advising employers should also be aware that protected disclosures may not be labelled as such, but still qualify for protection, provided the statutory tests are met. Whistleblowing disclosures can often be found in employees’ grievances and even more commonly, email correspondence or even discussions. Training for managers as to how to recognise whistleblowing and what to do about it should be encouraged.

Kong v Gulf International Bank Ltd

The Court of Appeal’s decision in Kong received much comment last year with respect to the line between a dismissal for making a protected disclosure and dismissal for the inappropriate manner in which the disclosure was made. In the making of her disclosures concerning legal procedural breaches, Kong had argued with, and caused offence to, the Respondent’s Head of Legal.

It is true to say that in some cases, whistleblowers are individuals who other staff may find abrasive and difficult to work with, but that does not preclude them from whistleblower protection. However, in this case, it was held that the Claimant was not successful in her automatic unfair dismissal claim because her dismissal was for conduct reasons that were separable from her disclosures.

This cautionary tale for whistleblowers who do not consider the manner in which they express their protected disclosures could have been avoided if legal advice had been provided at the outset. In an ideal world, potential whistleblowers would always seek advice before proceeding. However, in the real world and in our experience, whistleblowers usually only seek counsel after initial protected disclosures have been raised and any damage has been done – usually because that is when the detriments start or a dismissal ensues. It is then a case of advising on damage mitigation with respect to internal communications, so as not to antagonise the situation further.

For those advising employers, it should be noted that the Court of Appeal held:

“The upset that a protected disclosure causes is one example because for all practical purposes it is a necessary part of blowing the whistle; inherent criticism is another….There are likely to be few cases where employers will be able to rely on [these sorts of distinctions]” and therefore the judgment should be approached with caution.

Permission to appeal the Kong decision to the Supreme Court has been refused and therefore the case remains good law.

Daniels v United National Bank Ltd

This recent Employment Tribunal case concerned the former Chief Risk Officer (CRO) at the UK arm of Pakistan’s largest bank.

Daniels made 11 protected disclosures including that the bank was in breach of its risk management framework pursuant to section 166 (under the Financial Services and Markets Act 2000) and that it breached the Prudential Regulation Authority’s (PRA) Fundamental Rules 2 and 5.

United National Bank argued that the PRA rules should be treated as guidance, rather than legal rules. However, this was dismissed by the Tribunal, which took into account the Claimant’s role and expertise when assessing his reasonable belief that the risk management framework constituted the fulfilment of the Respondent’s obligations under the PRA rulebook.

Although a first instance decision, this case provides a useful indication that employers cannot safely rely on a defence that internal rules are not legal obligations. A remedy hearing has been set for 17 March 2023.

Conclusion

We await with interest the progress of the Protection for Whistleblowing Bill, the EU Directive and further cases where it is argued that conduct is severable from whistleblowing.

One thing can be certain – whistleblowing law is unlikely to stand still as it continues to evolve through Parliament and the courts. 

This article first appeared in ELA Briefing