There are no positive obligations on UK employers to encourage whistleblowing or to implement a whistleblowing policy. However, guidance from bodies like HM Revenue and Customs (48 pages / 693KB PDF), the Department of Business Innovation and Skills (13 pages / 95.5KB PDF) and the Ministry of Justice (45 pages / 389 KB PDF) recommends implementation of whistleblowing procedures or “speak up” policies to support and ensure compliance.
The existence of a whistleblowing policy can demonstrate an organisation’s commitment to listen to employees and encourage an open environment. When employees feel able to speak up if failings are noticed, employers can avoid further misfeasance and maximise the potential to protect their reputation.
Among other things, government guidance recommends that a whistleblowing policy facilitates anonymous reporting, takes reasonable steps to maintain confidentiality where requested, and clearly and consistently deals with all whistleblowing reports.
A whistleblowing policy should also contain a commitment to emphasise that victimisation of whistleblowers is not acceptable. Training should also be provided to all staff on the key provisions of the policy. The Advisory, Conciliation and Arbitration Service (ACAS) has published additional guidance about the law on whistleblowing in the UK.
Although the UK is not obliged to implement the terms of the EU’s Whistleblower Directive (see below), its terms remain relevant – particularly for UK-headquartered multinational firms. These companies will either have to reflect the differences in their global whistleblowing policy or choose to adopt a jurisdiction-by-jurisdiction approach, especially if some EU countries go further than required by the EU’s Whistleblower Directive.
Despite there being no positive obligation to have in place whistleblowing policies and procedures, whistleblowers are granted certain protections in the UK. These are contained in provisions inserted into the 1996 Employment Rights Act (ERA) by the 1998 Public Interest Disclosure Act (PIDA).
In March 2023 the UK government announced a review of the whistleblowing framework, designed to examine its effectiveness and inform policy decisions on improvements. It is expected that the review will be completed by autumn 2023.
Whistleblowing rules for UK financial services
There are some additional requirements on those in the UK financial services sector. The Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA) rules require the largest firms to put mechanisms in place to encourage a culture in which individuals raise concerns and challenge poor practice and behaviour. Smaller firms are encouraged to put similar arrangements in place.
The rules require a firm to:
- appoint a Senior Manager as their whistleblowers’ champion;
- put in place internal whistleblowing arrangements able to handle all types of disclosure from all types of person;
- put text in settlement agreements explaining that workers have a legal right to blow the whistle;
- tell UK-based employees about the FCA and PRA whistleblowing services;
- present a report on whistleblowing to the board at least annually;
- inform the FCA if it loses an employment tribunal with a whistleblower; and
- require its appointed representatives and tied agents to tell their UK-based employees about the FCA whistleblowing service.
The 2018 UK Corporate Governance Code (20 pages / 268KB PDF) imposes obligations on premium listed companies. Under ‘Section O’ in the code, the board of each premium listed company is required to “establish procedures to manage risk” and “oversee the internal control framework”. Whistleblowing arrangements are included in these internal controls.
Protection is provided for those who make a “qualifying disclosure” of information which is also a “protected disclosure”. Protection is only available if:
- a qualifying disclosure of information is made; and
- this is made in accordance with various statutory mechanisms for disclosure.
A qualifying disclosure is any disclosure of information which, in the reasonable belief of the worker making the disclosure, is made in the public interest and tends to show one or more of the following:
- criminal offences;
- breach of any legal obligation;
- miscarriages of justice;
- danger to the health and safety of any individual;
- damage to the environment; and
- the deliberate concealing of information about any of the above.
For a qualifying disclosure to also be a protected disclosure, it must be made to:
- the worker's employer;
- the person responsible for the relevant conduct – if the worker reasonably believes that the person is solely or mainly responsible for the relevant conduct, or if the complaint relates to a matter which is the legal responsibility of that person and not the employer;
- legal advisers;
- government ministers – if the worker is employed by an individual or body appointed under any enactment; or
- a person prescribed by an order made by the secretary of state.
Wider disclosure may also be protected provided that rigorous conditions are met. For example, the worker must reasonably believe that the information disclosed, and any allegation contained in it, are substantially true. In addition, the disclosure must not be made for the purposes of personal gain – although rewards offered under statute, for example by HM Revenue and Customs, are allowed.
The worker must also:
- have previously disclosed substantially the same information to their employer or to a prescribed person; or
- reasonably believe, at the time of the disclosure, that they will be subjected to a detriment by their employer if they disclose the matter to the employer or to a prescribed person; or
- reasonably believe, where there is no prescribed person, that material evidence will be concealed or destroyed if a disclosure is made to the employer.
Additionally, in all the circumstances of the case, it must be reasonable for the disclosure to be made. These rules may be relaxed in exceptionally serious cases.
The UK ERA creates two levels of protection for whistleblowers: dismissal and detriment. Under the ERA, the dismissal of an employee will be automatically unfair if the reason, or principal reason, for their dismissal is that they have made a "protected disclosure". The Act also protects workers from being subjected to any detriment on the ground that they have made a protected disclosure.
Both of these rights are available from day one of employment, with no qualifying period of employment or work needed before the individual may bring a claim. Where a protected disclosure of information is made to someone other than the employer there can be no breach of any express or implied contractual duties.