Whistleblowing: the early view from the tribunals

A look at the provisions protecting whistleblowers against victimisation, one year on.

The "whistleblowing" provisions inserted into the Employment Rights Act 1996 ("the ERA") by the Public Interest Disclosure Act 1998 ("the PIDA provisions" - see The Public Interest Disclosure Act 1998) have now been in force for just over a year. While the independent charity Public Concern at Work ("PCAW") estimates that over 200 complaints were made under these provisions between their commencement on 2 July 1999 and the beginning of June 2000, it is only fairly recently that we have seen the first significant clutch of employment tribunal decisions being handed down.

SELECTED DECISIONS ANALYSED

This feature, produced in association with PCAW, summarises the three most noteworthy of those decisions to date, and considers what legal and practical lessons may be extracted from them. In each of the cases the complaint was upheld, and in two of the cases the applicants sought (and in one case obtained) interim relief within seven days of their dismissal. The cases involved employees who raised concerns both within and outside their workplace, and two of the claims for unfair dismissal were brought by employees who had been employed for less than a year.

Bladon v ALM Medical Services Ltd1

Mr Bladon had over 20 years' experience as a nurse, and joined ALM Medical Services Ltd ("the respondent") on 14 June 1999 as a charge nurse at one of its private nursing homes. From around the middle of August until 2 September 1999, he temporarily acted up as matron (to cover the sickness absence of the normal incumbent of that post) at the request of Mr Sinclair, the personal assistant to the respondent's managing director, Dr Matta.

On 19 August 1999, Mr Bladon telephoned Mr Sinclair and raised concerns about a number of matters relating to the management of the home and the welfare and care of patients. Mr Sinclair specifically asked Mr Bladon to put his concerns in writing to him (Mr Sinclair), and not to Dr Matta or Dr Matta's wife. Mr Bladon did this on 22 August via a fax to Mr Sinclair. The specific concerns reiterated in the fax included, among other things, poor drug records and a wound to a resident. Stressing his professional obligations as a nurse, Mr Bladon asked for action to be taken. Confirming receipt of the fax, Mr Sinclair said that he would deal with the concerns raised therein "when I get back" (interpreted by the tribunal to mean on his return from holiday).

By 31 August, however, while Mr Sinclair was still away, Mr Bladon concluded that he had to take further action, primarily because he had seen evidence of a further deterioration in standards of patient care. On that date, he telephoned the Social Services Inspectorate ("SSI") and relayed substantially the same concerns raised previously with Mr Sinclair - including those relating to injuries to patients, drug records, staffing levels and neglect of residents.

The next day (1 September) the SSI, together with an inspector from the local health authority's nursing home inspectorate ("the HSI"), carried out an inspection of the home in question. Following that inspection, the SSI/HSI wrote to Dr and Mrs Matta on 8 September saying that four out of a total of six concerns raised by Mr Bladon were substantiated in whole or in part, and should be investigated and addressed by the respondent.

Written warning and dismissal

On 9 September, Mr Bladon was summoned to attend a disciplinary hearing without prior warning as to what was to be discussed, and was subsequently (on 10 September) given a written warning by Dr Matta as to his conduct. The letter containing the warning claimed that Mr Bladon's own alleged lack of professional care was partially responsible for any problems, and that his complaints were motivated by his poor relations with colleagues. He was denied any internal right of appeal.

About a week later, on 15 September, the respondent (in the form of Dr Matta) wrote to the SSI/HSI claiming that it had carried out an investigation and refuting any of the concerns that it did not blame on Mr Bladon. On 16 September, Mr Bladon was summarily dismissed, ostensibly because his discharge of his professional duties as a charge nurse fell below the standards expected of him.

Mr Bladon complained to an employment tribunal that he had been both subjected to a detriment (in the form of the written warning) and automatically unfairly dismissed because he had made protected disclosures under the PIDA provisions.

Disclosure to employer protected

The tribunal held, first, that Mr Bladon's fax to Mr Sinclair of 22 August 1999 was a qualifying and protected disclosure to his employer under s.43C(1)(a) of the ERA.

Among other things, the matters raised related to the health and safety of patients (within the meaning of s.43B(d) of the ERA) and, in respect of the control of drugs, involved an allegation that the respondent had failed or was likely to fail to comply with a legal obligation (and possibly committed a criminal offence - see s.43B(b) and (a) respectively). There was no argument as to whether Mr Sinclair was Mr Bladon's employer and thus an appropriate recipient under s.43C. As Mr Sinclair had promoted Mr Bladon (to acting matron), the tribunal found that "he was clearly acting in the capacity of [Mr Bladon's] employer".

Further, Mr Bladon had a "reasonable belief" that the information disclosed tended to show one or more of the matters set out in s.43B(a)-(f). There was no evidence to the contrary, and the tribunal concluded that it was also entitled to look at the outcome of the SSI/HSI inspection and investigation (which substantiated or partly substantiated most of the allegations) to determine whether Mr Bladon's complaints demonstrated the requisite reasonable belief. And disclosure to Mr Sinclair was (for the purposes of s.43C) made in "good faith" (that is, it was made honestly) because of Mr Bladon's concern about his professional responsibilities and, in particular, about patient welfare.

External disclosure was reasonable

Turning to the external disclosure, the tribunal commented that it was "a significant omission" from the ambit of the PIDA provisions that the SSI and the HSI are not prescribed persons for the purposes of disclosures made under s.43F.

However, Mr Bladon's disclosure to those bodies was in any event protected as a wider disclosure under s.43G. He had initially raised substantially the same matters internally in good faith (with Mr Sinclair), and the tribunal concluded that he had reasonably believed that the information disclosed to the SSI and the HSI, and the allegations contained in it, "were substantially true". This was again supported by the fact that most of his concerns had been wholly or partly substantiated by the subsequent inspection and investigation.

Moreover, wider disclosure under s.43G was "reasonable" in all the circumstances because, among other things: (a) the SSI and the HSI were investigatory bodies - Mr Bladon "did not go to the press or to a Member of Parliament but put his concerns to the [appropriate and] responsible regulatory [and investigatory] body", and left that body (or those bodies) to determine what action to take; (b) the concerns raised were serious, as was demonstrated by the immediate SSI/HSI inspection and investigation; (c) it was not unreasonable for Mr Bladon not to await Mr Sinclair's return before raising the matter externally in this way, and it was reasonable for him to assume that Mr Sinclair would pass his concerns on to Dr Matta; and (d) the respondent had no whistleblowing policy.

In the absence of such a policy, said the tribunal, or any indication from the respondent that Mr Bladon's concerns would be investigated internally, his conduct in "responsibly and professionally referring his concerns to [the SSI and the HSI] for them to determine whether an investigation should be carried out was perfectly reasonable, and more importantly proportionate to the seriousness of the allegations and the response or lack of it by the employer".

Treatment on grounds of disclosure

The tribunal concluded that Mr Bladon had been subjected to a detriment under s.47B of the ERA and automatically unfairly dismissed within s.103A because he had made the protected disclosures outlined. The detriment suffered took the form, first, of the written warning, and, secondly, of being deprived of the opportunity to appeal against that written warning by reason of the fact that he had made complaints. Further, his dismissal letter of 16 September 1999 was described by the tribunal as "manufactured" and "an attempt to conceal the true position".

Compensation for unfair dismissal

Dealing subsequently with issues of compensation, the tribunal awarded Mr Bladon some £5,500 compensation for net losses incurred to the date of the remedies hearing2 and £7,500 for future losses in respect of his unfair dismissal, calculated in accordance with s.123 of the ERA.

In making this award, the tribunal said that Mr Bladon had properly attempted to mitigate his losses by finding comparable agency work. He was entitled not to seek comparable permanent employment while he completed a part-time degree course on which he had already embarked (and which would expand his employment opportunities), "even if that meant a temporary interruption of nearly 12 months". Furthermore, the tribunal took into account the fact that all the evidence indicated that the "only reason" that Mr Bladon had not so far been able to get a permanent job was that employers, "consciously or subconsciously", had been influenced by the fact that Mr Bladon had been "a whistleblower" and, more importantly, had brought proceedings under the PIDA provisions.

Aggravated damages for detriment

Perhaps more notably, the tribunal awarded Mr Bladon a further £10,000 for the detrimental treatment that he suffered (that is, the written warning and denial of his right to appeal), calculated in accordance with s.49(2) of the ERA. That sum, the tribunal said, took account of injury to Mr Bladon's feelings and contained a substantial element of "aggravated damages" (which the respondent had conceded could be awarded). The tribunal accepted that the respondent (in the form, in particular, of Dr Matta) had "acted in a demeaning, insensitive, unprofessional, unreasonable and arrogant way" that had left Mr Bladon feeling "belittled, professionally slurred, isolated and unable to respond in an effective way".

The respondent had effectively "manufactured" or "fabricated" a disciplinary situation, and then failed to follow its own procedures; it had made no attempt to investigate Mr Bladon's original concerns; and had throughout (including before the tribunal) sought to attribute responsibility for what had occurred to Mr Bladon himself. In so doing, it had "added insult to injury". By conducting a disciplinary hearing that was effectively a "sham" and maintaining the position that it had before the tribunal, the respondent had "considerably aggravated the situation in this case". In the tribunal's view, the respondent's behaviour was of an "equivalent level" to the type of "high-handed, malicious, insulting [or] oppressive" behaviour that has hitherto been said to justify the award of aggravated damages in other jurisdictions (see the discussion at p.7 below).

Azmi v Orbis Charitable Trust3

Ms Azmi was appointed as resources director for the Orbis Charitable Trust ("the trust"), a UK charity which worked to tackle and alleviate blindness worldwide, on 24 May 1999. The trust had nine employees and was originally the UK fund-raising office for a US-based trust ("Orbis International Inc"), but is now a company limited by guarantee under UK law. Six months before Ms Azmi started at the trust, the UK Charity Commission had formally raised concerns about its financial operation and the degree of control exercised over it from the USA.

Irregularities raised

On her arrival at the trust, Ms Azmi herself noted certain irregularities in relation to the auditing of accounts and financial controls. Shortly thereafter, in June 1999, she had cause to contact her predecessor in post, Ms Holme, and they agreed to meet to talk about their shared concerns in that regard. At that meeting, they agreed that if any complaint was to be made to the Charity Commissioners, it should be made in Ms Holme's name. Ms Holme faxed to Ms Azmi and to the trust's auditors the draft of her letter to the Charity Commission detailing her concerns, and that letter was ultimately sent to the Commissioners on 2 August.

Ms Azmi claimed that she met regularly with the trust's executive director, Mr Coe, and had herself raised with him her concerns about the running of the trust, its compliance with UK charity law and its relationship with Orbis International Inc. She later met the trust's auditors to explore these issues further, and was advised how she should try to resolve the problems internally. On 6 August, Ms Azmi and Mr Coe met the trust's solicitor and sought explanation of a number of points of law relating to the running of the charity. The solicitor advised them that the trust should not be under the control of Orbis International Inc, and should not simply hand its funds over to the latter.

Prior to that meeting, Ms Azmi had sought confidential advice from PCAW about her concerns. On 18 August, unbeknown to her employer, Ms Azmi herself rang the Charity Commission in confidence. At the trust's AGM on 19 August, Ms Azmi was appointed company secretary and on 21/22 August she travelled with Mr Coe to New York to meet with Orbis International Inc.

Grievance lodged

At a heated meeting with Mr Coe in the USA on 23 August, Ms Azmi was allegedly severely critical of the way in which Orbis International Inc (and the trust) operated. Later that day she reported her exasperation and concerns to the human resources director of Orbis International Inc, Ms McAllister, who advised Ms Azmi to submit to her a written grievance against Mr Coe. Ms Azmi did this on 24 August, citing Mr Coe's management style and failure to address the governance and finance issues. While she attached to that grievance a copy of Ms Holme's draft letter to the Charity Commissioners, Ms Azmi stressed that she had not been responsible for it. Separately that same day, Mr Coe advised the president of Orbis International Inc that he had decided that Ms Azmi should not be confirmed in her post because she demonstrated a lack of judgment and the wrong attitude.

Ms McAllister decided to extend Ms Azmi's three-month probation period while her grievance was being investigated. Those investigations were completed on 13 October, and on 15 October the Charity Commission served an order on the trust to disclose certain documents to it. That evening Mr Coe told Ms Azmi that her position would not be confirmed due to her "poor performance". Subsequently, the Charity Commission required changes to the rules and practices of the trust and that a large sum of money be repaid by Orbis International Inc.

Operative reason for dismissal

On Ms Azmi's complaint that she had been automatically unfairly dismissed by reason of having made protected disclosures, the employment tribunal noted initially that, in her involvement and interaction with the trust's auditors and the Charity Commissioners, she was "at pains to ensure that her concerns were kept confidential". While disclosures to those bodies potentially fell within the PIDA provisions, they were not the operative reason for dismissal in the present case. This was because the trust did not know about them, and so they "could not operate on [its] mind" when making the decision to dismiss.

Disclosures to executives of Orbis International Inc, including, for example, the complaint and grievance lodged with Ms McAllister, were not disclosures made to Ms Azmi's employer (that is, the trust) under s.43C(1)(a) of the ERA. Moreover, the matters contained in her grievance did not relate solely or mainly to the conduct of Orbis International Inc or a matter within its responsibility, and so did not amount to a protected disclosure to a person other than her employer under s.43C(1)(b).

However, having heard all the evidence (and rejecting much of Mr Coe's evidence as being not credible) the tribunal held that Ms Azmi had been dismissed because she had blown the whistle to her employer, in the form of Mr Coe, in good faith in accordance with s.43C(1)(a). It concluded that Ms Azmi had throughout the period of her employment persistently raised with him her concerns about the lawfulness of the trust's actions, and that Mr Coe "did not appreciate having such matters brought to his attention and used the excuse of performance to remove [Ms Azmi]".

Compensation had yet to be determined in this case at the time of going to press.

Fernandes v Netcom Consultants (UK) Ltd4

Mr Fernandes was employed by Netcom Consultants (UK) Ltd ("Netcom") - a UK telecommunications company operating internationally - for over four years, until his dismissal in December 1999. Netcom is a wholly owned subsidiary of a United States corporation, XSource, which is ultimately owned by a company based in Luxembourg. At the time of his dismissal, Mr Fernandes was the chief financial officer responsible for the accounts of Netcom and two sister companies based in the UK.

Suspicion over expenses claims

In January 1996, a new managing director, Mr Woodhouse, took up his post, and within six months began to submit expenses claims without receipts. Mr Fernandes was responsible for scrutinising the expenses - whether incurred through the company credit card or through cash advances - and when he asked for receipts, Mr Woodhouse assured him that he would bring them in; but he never did. In January 1997, when Mr Woodhouse continued to submit his expense accounts without supporting receipts, Mr Fernandes faxed a letter raising his concerns to his contact at XSource. The contact telephoned Mr Fernandes and told him: "You're lucky I picked up your fax" and that nobody else had seen it; that no further action would be taken; that the contact would destroy the fax, and Mr Fernandes should do the same; and he warned Mr Fernandes to "look after your butt".

Mr Fernandes continued to request receipts from Mr Woodhouse, who re-assured him that he had them all in a large box, but still none were forthcoming. By early spring 1999, the pattern and acceleration of the expenditure was such that Mr Fernandes thought something should be done. He was suspicious about the legitimacy of some of the expenses, which included payments to clothing shops and to a solicitor. Later, he was by chance told by Mr Woodhouse's wife that she and her husband had recently moved house, which could have explained the solicitor's payment. The tribunal noted that external audits in 1996, 1997 and 1998 and an internal audit in 1999 failed to pick up any problems.

Dismissal follows letter of complaint

Over a five-month period, Mr Fernandes prepared a document that outlined his concerns about Mr Woodhouse's expenses, as well as concerns about cashflow problems that had resulted in non-payment of corporation tax and late payments to staff pension funds. On 29 November 1999, Mr Fernandes sent a letter dated 28 November and supporting documents to members of the management board at XSource in the US and the parent company in Luxembourg. He also faxed the document and the first page only of his letter of 28 November to the UK management team of Netcom, including Mr Woodhouse.

On the same day (29 November), the chief executive of XSource, Mr Grant (who was also the chairman of Netcom and technically Mr Woodhouse's line manager responsible for authorising his expenses claims), told Netcom's human resources director to instruct Mr Fernandes to remain at home pending investigation by the American company. Within a week of disclosing his concerns, Mr Fernandes was twice interrogated by the group's head of security and once by Mr Grant in the presence of the head of security. At the latter meeting (on 2 December), Mr Grant was clearly angry, and told Mr Fernandes that he was a "bad accountant" and that he had "lost the respect of everyone". Further, Mr Fernandes was asked during two subsequent telephone conversations with Mr Grant and the head of security to resign, and the second time threatened with criminal prosecution and told he would have to repay £316,000 of expenses.

Mr Fernandes refused to resign, and was summoned to a disciplinary hearing, to be conducted by XSource's chief financial officer, which took place on 15 December 1999. As a result, it was decided to dismiss Mr Fernandes summarily for gross misconduct. The stated reasons in his dismissal letter of 17 December were related to his failing to pay corporation tax and making late pension payments, and in particular for "authorising" the misappropriation of £316,000 of expenses by Mr Woodhouse. Mr Woodhouse, however, retained his position for at least a further month, until the UK management team of Netcom finally became aware of the full details of Mr Fernandes's letter of 28 November 1999.

Real reason was protected disclosure

Mr Fernandes was successful at an employment tribunal in obtaining interim relief and an order for continuation of contract (see below). At the full hearing of his unfair dismissal complaint under the PIDA provisions, the tribunal found that the reasons given for his dismissal constituted a "smokescreen". It inferred, instead, that the real reason for his dismissal was making a protected disclosure of his concerns about financial malpractice to the management board in the US.

In drawing that inference, the tribunal had particular regard to the behaviour of Mr Grant towards Mr Fernandes at the meeting of 2 December; the pressure on Mr Fernandes to resign before any disciplinary hearing; the inclusion of "trivial charges" in the allegation for that hearing; the failure of Mr Grant and his team at XSource to disclose the contents of Mr Fernandes's letter of 28 November 1999 to Netcom's UK management team "until it was unavoidable"; and the markedly different treatment of Mr Fernandes and Mr Woodhouse.

If those matters were considered beside the fact that Mr Grant and his chief financial officer apparently took no account of Mr Woodhouse's actual behaviour in relation to the receipts, or of the line management relationship between Mr Woodhouse and Mr Fernandes, or of the requirement for Mr Woodhouse's line manager (Mr Grant) to authorise his expenses, the tribunal said it was an "irresistible conclusion that for reasons of their own" the senior management at XSource decided "to get rid of the more junior man who had disclosed the position". Further, the behaviour of Mr Grant towards Mr Fernandes at the meeting of 2 December, and the pressure put on Mr Fernandes to resign, and the other threats, "were a clear attempt to intimidate and pressurise Mr Fernandes to resign so that all could be hushed up".

Record compensation

In a blaze of publicity, Mr Fernandes was, on 6 July 2000, awarded compensation totalling £293,441 for his unfair dismissal, calculated in accordance with ss.123 and 124 of the ERA (that is, with the normal upper limit on the compensatory award lifted).

That award took account, among other things, of the tribunal's view that Mr Fernandes would be unlikely to get employment at anything like his previous salary in the (almost) six years remaining until he reached his 65th birthday. Reaching that conclusion, the tribunal observed that Mr Fernandes had been advised by recruitment consultants that "his age would be against him", and that he should wait "until the pending tribunal case was over" before seriously seeking employment. The tribunal also concluded that it would not have been just and equitable to reduce compensation to reflect the chance that Mr Fernandes might have been fairly dismissed before he reached 65, or that he would have left his employment for any other reason before that date.

POINTS OF LAW

The cases considered above raise a number of interesting, if eclectic, points as to the application and interpretation of the PIDA provisions. At worst, the decisions give a useful indication that a robust and purposive approach is being adopted by tribunals. On the other hand, their importance in legal terms should not be overstated, and we must await consideration by the EAT and higher courts for authoritative statements on a number of the issues raised.

Consideration of at least some of the matters mentioned below may possibly occur in the course of appeals on the questions of both liability and compensation that we understand have been lodged in Bladon and Fernandes.

Interim relief

Employees who allege that they have been (or are about to be) dismissed under the PIDA provisions can apply for "interim relief" within seven days of dismissal (s.128 of the ERA - see The Public Interest Disclosure Act 1998). Interim relief may take the form of reinstatement, re-engagement or continuation of a contract pending the final determination or settlement of the complaint.

In order to be granted such relief, an applicant must establish that he or she is "likely" to succeed at the full hearing. This means that the applicant must show that he or she has "a pretty good chance" of success, and this requires him or her to achieve a higher degree of certainty in the mind of the tribunal than showing merely "a reasonable prospect of success" (Taplin v C Shippam Ltd5). While Mr Fernandes obtained interim relief, Mr Bladon's application in this respect was (perhaps surprisingly) rejected by the tribunal without hearing evidence, on the basis that the respondent's defence was "not implausible".

PCAW suggests that, in cases involving a s.43C disclosure (to an employer) or s.43E (disclosure to a minister of the Crown), an applicant need only show that he or she had a reasonable suspicion of malpractice, and that he or she raised concerns in good faith. Under s.43F (disclosures to a prescribed person), the threshold is only slightly higher in that an applicant must reasonably believe the concern is substantially true. Generally, unless there are live pre-existing disciplinary issues, interim relief in these cases may be readily attracted, as was demonstrated in Fernandes. Where the case involves a wider disclosure under s.43G, as in Bladon, an applicant must demonstrate that it was reasonable in all the circumstances to raise concerns to an outside body. In those cases, it will be more difficult for a tribunal to be able to find at the interim relief stage that an applicant is likely to be successful without hearing evidence.

Burden of proving reason for dismissal

We have regularly pointed out that the formal burden of proving the reason for dismissal differs under those jurisdictions that provide for automatically unfair dismissals irrespective of length of service, depending upon whether the employee has in fact been employed for one year or more (see most recently GMB v Man Truck & Bus UK Ltd). In the cases featured here, for example, two of the applicants (Mr Bladon and Ms Azmi) had been employed for less than a year and so they, formally at least, shouldered the burden of proving that the tribunals had jurisdiction over their unfair dismissal complaints. This was explicitly acknowledged by the tribunal in Azmi.

Mr Fernandes, in contrast, had been employed for some four years. Referring to the Court of Appeal's decision in Maund v Penwith District Council6, the tribunal in Fernandes said that in those circumstances "it is for the employer to show the reason for dismissal but that in a case such as the present where the employee is asserting an automatically unfair reason and adduces evidence tending to show that the reason asserted by the employer is not true, then the burden remains on the employer to show the true reason".

It is worth noting that, in contrast, the burden of showing the grounds for detrimental treatment is placed explicitly on the employer in all cases (s.48(2) of the ERA).

Drawing inferences

More generally, the tribunal in Fernandes made interesting comments about the importance of being willing to draw inferences in whistleblowing cases: "By analogy with sex and race discrimination cases we bear in mind that it is extremely unlikely that any employer will come to the tribunal and admit that it dismissed for an impermissible reason. Therefore, where the employee has performed a protected act and a dismissal follows, it is only common sense for the tribunal to look to the employer for an explanation and to scrutinise that explanation closely. If the explanation is unsatisfactory, then the tribunal may infer that the reason for dismissal was the protected act."

As Azmi demonstrates, however, in order for an applicant to show that he or she was dismissed for making (in that case) a protected disclosure, he or she must show that the employer was aware of it.

Compensation for detriment

In determining the question of compensation for detriment in Bladon, the tribunal was referred to the EAT's decision in Cleveland Ambulance NHS Trust v Blane7. That case confirmed that, in awarding compensation such as is "just and equitable in all the circumstances having regard to the infringement complained of" under provisions broadly analogous to s.49(2) of the ERA, a tribunal has the power to award damages for injury to feelings.

But the tribunal in Bladon was also satisfied (and the respondent conceded) that it could "include within its assessment of such compensation aggravated damages". It was referred to and examined authorities drawn from significantly different jurisdictions - for example, the race discrimination case (1) Armitage (2) Marsden and (3) HM Prison Service v Johnson8. In such jurisdictions, compensation is awarded according to common-law principles for the foreseeable consequences of a statutory tort. Nevertheless, the power to award aggravated damages would seem to be a logical corollary of any power to compensate for injury to feelings.

Whatever the case, the award of £10,000 in this respect in Bladon might be seen as excessive. It certainly far outstrips average injury to feelings awards in race, sex and disability discrimination cases (£3,730, £2,907 and £2,543 respectively in 19989). On the other hand, the aggravating factors identified in Bladon seem to chime with those mentioned in the EAT's recent decision in the race discrimination case JCT 600 Contracts Ltd v Hussain10.

It is also worthy of note that an award for injury to feelings in the context of the PIDA provisions is available only in cases of detrimental treatment, and cannot be obtained by employees in unfair dismissal cases. In contrast, it would seem in principle to be open to other workers who claim detriment in the form of termination of their contracts (a course not open to employees) to claim under this head (but see s.49(6) of the ERA).

WHISTLEBLOWING POLICIES

The early cases under the PIDA provisions also underline the importance for employers of implementing effective whistleblowing policies.

In Bladon the tribunal found that it was reasonable for the applicant to make a wider disclosure to the SSI/HSI because, among other factors, there was no whistle-blowing policy available to him. If the applicant in Fernandes had been able to raise his concerns appropriately to a designated officer under a whistleblowing policy, the fraud that he suspected might have been detected and stopped much earlier. An appropriate whistleblowing policy would have reassured the applicant in Azmi that she would be protected for raising her concerns in good faith, and would have indicated to her how to do so most effectively.

Advice for employers

In this light, PCAW advises that employers should consider:

  • the need to introduce a whistleblowing policy;

  • the impact of the PIDA provisions on confidentiality clauses in severance agreements, and the use of such provisions in employment and related contracts;

  • making it clear that it is both safe and acceptable for workers to raise a concern they may have about misconduct or malpractice in the organisation, and indicating the proper way in which concerns may be raised outside the organisation if necessary;

  • where a worker raises a concern about a specified malpractice, making every effort to respond (and demonstrate it has responded) to the message, rather than "shooting the messenger";

  • where a protected disclosure has been made, taking all reasonable steps to try and ensure that no colleague, manager or other person under its control victimises the whistleblower;

  • that anything that might be construed as an attempt to suppress evidence of malpractice is now particularly inadvisable, since a reasonable suspicion of a "cover-up" would itself provide a basis for a protected disclosure; that a disclosure to the media is more likely to be protected; and that there is a much reduced scope for containing any damage by a private settlement with a confidentiality clause;

  • that it is in their own interests to introduce effective whistleblowing procedures.

    Purpose of policies

    PCAW further advises that "the purpose of a whistleblowing policy is primarily to deter and detect wrongdoing. It is not meant to replace any other procedure already in place; it is a separate and additional channel of communication."11 This is confirmed by the imminent revised ACAS Code of Practice on Disciplinary and Grievance Procedures12, which indicates that a whistleblowing policy should generally be kept separate from normal grievance procedures (see para. 47 of the revised Code).

    According to PCAW, a whistleblowing policy signals to staff the appropriate way to raise their concerns. By implementing a policy and actively promoting it, senior management can demonstrate its commitment to hearing about concerns early, and staff will be reassured that they will be protected if they raise concerns in good faith. Further, by clearly indicating that there are safe external routes to raise concerns, ie to a prescribed regulator, staff will be even more assured that raising the matter internally is appropriate.

    An effective whistleblowing policy will reduce the risk that claims will be brought under the PIDA provisions and that any wider public disclosures will be protected. Implementing such a policy is essential in promoting openness and accountability in the workplace.

    References

    1 25.4.00 Case no.2405845/99.

    2 12.6.00.

    3 4.5.00 Case no.2200624/99.

    4 18.5.00 Case no.2200060/00.

    5 [1978] IRLR 450.

    6 [1984] IRLR 24.

    7 [1997] IRLR 352.

    8 [1997] IRLR 162.

    9 Equal Opportunities Review No.86, July /August 1999, pp.14-15.

    10 1.2.00 EAT 1342/99.

    11 PCAW has produced a compliance toolkit and policy pack for employers. For more information contact PCAW, Suite 306, 16 Baldwins Gardens, London EC1N 7RJ, tel. 020 7404 6609; e-mail: whistle@pcaw.demon.co.uk

    12 This is due to come into force on 4 September 2000.

    Statutory framework: a short guide

    Who can bring a claim?

    The PIDA provisions apply to "employees" under contracts of employment and "workers" more broadly defined, including: many contractors; trainees; agency staff; homeworkers; and every professional in the NHS. They do not presently cover the genuinely self-employed (other than in the NHS), where the other party to the contract is a client or customer. Nor do they cover volunteers, the intelligence services, the armed services or police officers (see The Public Interest Disclosure Act 1998).

    When can a claim be brought?

    Claims may be brought for detrimental treatment (including termination of contract in the case of workers other than employees) and unfair dismissal (in the case of employees narrowly defined). Dismissal in breach of the PIDA provisions is automatically unfair and the usual qualifying period of one year's employment does not apply.

    What is a qualifying disclosure?

    A "qualifying disclosure" is defined in s.43B(1) of the ERA as "any disclosure of information which, in the reasonable belief of the worker making the disclosure", tends to show one or more of the following -

  • that a criminal offence has been, is being or is likely to be committed;

  • that a person has failed, is failing or is likely to fail to comply with any legal obligation to which he or she is subject. This includes any contractual or other common-law obligation, statutory duty or requirement, or administrative law requirement;

  • that a miscarriage of justice has occurred, is occurring or is likely to occur;

  • that the health and safety of any individual has been, is being or is likely to be endangered;

  • that the environment has been, is being or is likely to be damaged; or

  • that information tending to show any of the above has been, is being or is likely to be deliberately concealed (see The Public Interest Disclosure Act 1998 for detailed discussion).

    How is an employee protected?

    An employee is protected where a qualifying disclosure is made in one of the following ways:

  • Internal disclosures (s.43C of the ERA): A disclosure to the employer (which may include a manager or director) will be protected if it is made "in good faith". Where a third party is responsible for the malpractice, this same test applies to disclosures made to it. A disclosure is made in good faith if it is made honestly, even though made negligently or without due care.

  • Disclosures to legal advisers (s.43D): This means that a worker can seek legal advice and be protected for doing so. This is the only disclosure under the PIDA provisions that does not require the employee to have made the disclosure in good faith.

  • Disclosures to a minister of the Crown (s.43E): This section provides that workers in government-appointed bodies are protected if they report their concerns in good faith to the sponsoring department rather than to their employer. Examples of the bodies to which this section applies are where the employer is an individual appointed under statute by a minister (eg the utility regulators) or where one or more members are appointed by a minister (eg NHS trusts, tribunals and non-departmental public bodies).

  • Disclosures to prescribed regulators (s.43F): There is specific provision for disclosures to "prescribed persons"13. These include regulators such as the Health and Safety Executive, the Inland Revenue and the Financial Services Authority (see The Public Interest Disclosure Act 1998   for the full list). Such disclosures are protected where the whistleblower meets the tests for internal disclosures and, additionally, honestly and reasonably believes that the information and any allegation in it are substantially true.

  • Wider disclosures (ss.43G and 43H): Wider disclosures (eg to the police, the media, MPs, and non-prescribed regulators) are protected if, in addition to the tests for disclosures to prescribed persons, they are reasonable in all the circumstances and they are not made for personal gain. The whistleblower here must, however, meet at least one additional precondition to win protection for a wider disclosure. This is either that (a) he or she reasonably believed that he or she would be victimised if he or she had raised the matter internally or with a prescribed regulator; or (b) there was no prescribed regulator, and he or she reasonably believed the evidence was likely to be concealed or destroyed; or (c) the concern had already been raised with the employer or a prescribed regulator.

    In deciding the overall reasonableness of a wider disclosure under s.43G, the tribunal will consider all the circumstances, including: the identity of the person to whom it was made; the seriousness of the concern; whether the risk or danger remains; and whether the disclosure breached a duty of confidence which the employer owed a third party. Where the concern had been raised with the employer or a prescribed regulator, the tribunal will also consider the reasonableness of their response. Finally, if the concern had been raised with the employer, the tribunal will consider whether any whistleblowing procedure in the organisation was or should have been used.

    There is further provision for external disclosure of information about a failure that is of an "exceptionally serious nature" under s.43H of the ERA. This is not subject to the additional preconditions under s.43G, and the identity of the person to whom the disclosure was made is the only matter specified in determining reasonableness.

    13 See The Public Interest Disclosure (Prescribed Persons) Order 1999, SI No.1549.