Parliamentary group calls for overhaul of whistleblowing legislation

In an extensive report the All Party Parliamentary Group (APPG) on Whistleblowing set out 10 recommendations for change, which experts said would impose significant obligations on organisations of all types.

The 10 recommendations in the report (31 page / 11.9MB PDF) included focusing the legal definition of whistleblowing on the harm, or risk of harm, to the public. The APPG said a mandatory internal and external reporting mechanism should be implemented, and recommended the establishment of an Independent Office for the Whistleblower as a regulatory body.

The APPG also recommended reviewing compensation for whistleblowing and the barriers to justice; banning non-disclosure agreements (NDAs) in whistleblowing cases; and introducing a better regulatory framework.

The recommendations would require changes to the Public Interest Disclosure Act 1998 (PIDA), which protects whistleblowers from detrimental treatment by their employer.  

Civil fraud expert Andrew Herring of Pinsent Masons, the law firm behind Out-Law, said the report made a compelling case for reform of the regime for the protection of whistleblowers in the UK.

“If the reforms envisaged in the report are implemented, they will impose additional obligations on organisations. For example, across all sectors, private and public organisations alike will be required to put in place mandatory internal reporting mechanisms and safeguards. This would differ from the current position, where obligations are sector-specific,” Herring said.

“However, encouraging whistleblowers to report wrongdoing by making sure they are adequately protected also makes good business sense. From a civil fraud perspective, for example, whistleblowers are critical to detecting fraud within businesses. As the report notes, as much as 42% of internal fraud is identified by whistleblowers,” Herring said.

Civil fraud expert Bill Geiringer of Pinsent Masons pointed to the definition of whistleblowing proposed by the APPG as being of particular note.

“This envisages that protections should be provided for whistleblowers who report any harmful violation of integrity and ethics, even where this is not criminal or illegal. This recognises the value in whistleblowers reporting behaviour which poses a risk of harm, as well as that which is already causing more tangible harm,” Geiringer said.

“In relation to internal fraud, this may encourage employees to report ‘red flags’ they are concerned about in advance of loss actually being caused to the organisation by a fraud, enabling the organisation to take action to prevent the fraud occurring,” Geiringer said.

The report follows the recent announcement by the UK government of new legislation which will stop employers using NDAs to prevent individuals from disclosing information to the police, regulated health and care professionals or legal professionals.

Employment law expert Sue Gilchrist said the APPG report did not seem to take these recent developments into account. Although the new legislation, and the consultation which preceded it, had a focus on discrimination and harassment, Gilchrist said there was an overlap between the proposed change in the law and the APPG recommendations.

“Such issues may well amount to criminal behaviour and therefore to protected disclosures under PIDA too, but the consultation outcomes will not be limited to cases of discrimination and harassment. The APPG report’s failure to address that leads to potential duplication of issues which have already been the topic of consultation, and where legislation is already on the way,” Gilchrist said.

“However, it also reflects that one of the issues which the government hasn’t specifically addressed in its announcements about NDAs is the question of whether the definition of whistleblowing goes far enough, for example, protecting workers who might raise concerns which may not amount to a criminal offence. The devil will be in the detail of the draft legislation,” Gilchrist said.