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Whistleblowing: Government publishes new guidance for employers and regulators

By: Amanda Steadman

Submitted by Firm:
Addleshaw Goddard
Firm Contacts:
Michael Leftley, Sarah Harrop
Article Type:
Legal Article
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On 20 March 2015 the Government published new non-statutory guidance for employers and regulators and a non-statutory Code of Practice for employers. Separately, the Government has also responded to the consultation on annual reporting on whistleblowing by regulators. The response confirms the Government's final proposals and outline draft regulations have also been published, although these will not come into force until after the General Election. We report below on the new guidance and the response to the consultation below.

Background

On 25 June 2013, a number of important changes were made to the existing whistleblowing legislation, chiefly, the introduction of the requirement that disclosures are protected only where there is a reasonable belief that it is made in the "public interest". In addition, the requirement that disclosures must be made in good faith in order to qualify for protection was removed. Following these reforms, the Government proceeded to issue a Call for Evidence seeking views and evidence on whether there was a case for further changes to the legislative framework.

The Call for Evidence closed on 1 November 2013 and the Government published its response in June 2014. You can read our detailed article on the response here. The recommendations for further reform were limited and concerned two key areas:

  • Better guidance: the Government committed to introduce better guidance for individuals and employers, together with a new Code of Practice.
  • Regulators to report annually: the Government also committed to introduce a new statutory obligation on requlators to report on an annual basis on the whistleblowing disclosures received. The Small Business, Enterprise and Employment Act 2015 includes a power enabling the Government to make regulations requiring regulators to report annual annually. In connection with this, a further consultation was launched on 1 August 2014 seeking views on the scope of the secondary legislation (Annual Reporting Consultation).

On 20 March 2015 the Government published new non-statutory guidance for employers and regulators and a non-statutory Code of Practice for employers. Separately, the Government has also responded to the Annual Reporting Consultation, confirming the Government's final proposals. Outline draft regulations have also been published, although it is not yet clear when these will be finalised and come into force. We report below on the new guidance and the response to the Annual Reporting Consultation below.

Employers

New guidance

The guidance is written in simple terms and provides a basic overview of the meaning of whistleblowing and the employer's responsibilities. A key theme highlighted throughout the guidance is the need for an internal whistleblowing policy which will help to demonstrate an employer's commitment to listening to the concerns of its workers. It is acknowledged that there is no "one-size-fits-all" policy and some employers will prefer to have a standalone policy, whilst others may prefer to incorporate it into a code of ethics or local procedures relevant to specific business units. A bullet point list of items to include in the policy is provided in the guidance.

The guidance also recommends that employers communicate and promote the existence of whistleblowing policies to workers e.g. via an intranet or staff handbook. Other ideas for promoting the policy include: holding a staff meeting to discuss the policy; appointing a whistleblowing champion to drive the commitment to valuing whistleblowing; and using promotional posters around the building.

The guidance offers a number of good practice recommendations on how employers should deal with disclosures including: having a facility for anonymous reporting; providing the whistleblower with access to mentoring, advice and counselling services; preserving confidentiality where possible; holding a meeting with the whistleblower; and conducting a formal investigation if required. Emphasis is also placed on the need to explain the procedures to the whistleblower and to manage their expectation as to the timing and level of feedback they will receive about how the disclosure has been dealt with.

Other recommended steps for employers are:

  • Recognising that workers are "valuable eyes and ears": this is important because the information that workers may uncover could prevent wrongdoing which may harm an organisation or its workers.
  • Getting the right culture: it is highlighted that the two main barriers whistleblowers face are a fear of reprisal and that no action will be taken if they make the decision to blow the whistle. Accordingly, the most important step for employers is to ensure that staff can approach management and that it is demonstrated that such disclosures are welcomed and encouraged.
  • Training and support: employers should implement training, mentoring, advice and other support systems for workers. The guidance suggests that training be provided to all staff on the key arrangements of the policy, with additional (and regular) training for those with whistleblowing responsibilities such as managers or designated contacts.
  • Being able to respond: employers should investigate disclosures promptly and provide feedback to the whistleblower. It is recommended that a least one senior member of staff is given as a point of contact for whistleblowers.
  • Better control: by embracing whistleblowing as an important source of information, managers will have better information to make decisions and control risk.
  • Resolving the wrongdoing quickly: dealing with whistleblowing disclosures internally allows employers to act promptly and put right whatever wrongdoing is found.

New Code of Practice

The Code of Practice (Code) sets out a list of best practice steps for employers, reiterating the themes addressed in the employer guidance. In summary, the Code recommends that employers:

  • Put in place a whistleblowing policy which is accessible and communicated to all staff.
  • Offer training to all staff on whistleblowing and to managers on how to deal with disclosures.
  • Create an open culture which demonstrates support for whistleblowers and no tolerance for any detrimental treatment towards whistlelblowers.
  • Identify the person/s to whom disclosures should be made.
  • Confirm that settlement agreements will not prevent whistleblowing disclosures.
  • Deal with disclosures fairly, consistently, professionally and confidentially.
  • Provide support and feedback to the whistleblower.

Regulators

New guidance

The guidance is designed to help prescribed persons (commonly known as regulators) understand the role and how this fits with their statutory functions beyond the whistleblowing legislation. The Public Interest Disclosure (Prescribed Persons) Order 2014 sets out the list of over 60 organisations and individuals that a worker may approach outside their workplace to report suspected wrongdoing.

The guidance explains the purpose of the regulator is to provide the worker with a mechanism to make their whistleblowing disclosure to an independent body. It also clarifies the circumstances in which the worker will retain the same employment rights as if they had made the disclosure internally. The guidance recommends that regulators decide whether they limit their role to the receipt of protected disclosures only or whether they will accept a wider range of non-protected disclosures.

It is explained that once a disclosure has been made to the regulator it is for the regulator to manage the initial contact with the whistleblower and take a decision about what further information or action is required. Regulators should have a set of policies and procedures to ensure consistency of treatment. Beyond the whistleblowing legislation, regulators may be able to consider a disclosure and make recommendations to the employer on how to rectify the problems found. Depending on their statutory powers, the regulator may also be able to take enforcement action where they find evidence of wrongdoing.

Emphasis is also placed on how regulators should manage a whistleblower's expectations and how regulators can promote best practice amongst the organisations they oversee.

New duty to report annually

The response to the Annual Reporting Consultation confirms that there was general support from respondents for a new duty for regulators to report annually. It is considered that increased transparency on how disclosures are handled will drive up standards amongst regulators and improve confidence amongst whistleblowers that their concerns are being addressed.

The responses have led the Government to conclude that the regulations governing annual reporting should not be too prescriptive or onerous and retain a degree of flexibility to accommodate the varying roles and remits of the different regulators. In particular, regulators will not be required to determine whether or not a disclosure is a public interest disclosure. Instead, the regulations will prescribe that the reports need only contain limited information, with the option for regulators to publish additional information if they wish. However, the reports must go beyond pure statistics and will need to include an accompanying narrative to add value.

Importantly, the reports will not reveal the identity of either the whistleblower or the employer: this was identified as a "fundamental concern" of respondents to the consultation.

An outline draft of The Prescribed Persons (Report on Disclosures of Information) Regulations 2015 is appended to the response. However, these regulations will not come into force before the General Election.

Comment

Employer should familiarise themselves with the new guidance and Code and take appropriate steps to comply with the recommendations, focusing on the need for a well-communicated policy, clear reporting procedures and appropriate training. Although the recommendations in the guidance and Code are non-statutory, they represent best practice standards for employers. A failure to meet those standards is likely to be capitalised on by a claimant in any future whistleblowing dispute.

Guidance for Employers and Code of Practice

Prescribed Person Guidance

Prescribed Bodies: Annual Reporting Requirements on Whistleblowing – Government Response