UK to review whistleblowing laws to boost compliance

The UK government’s review of the whistleblowing framework will examine the effectiveness of the existing laws in meeting their original objectives, as it seeks to develop the laws that empower and protect workers to blow the whistle on wrongdoing in workplace. The review comes nearly four years after an All Party Parliamentary Group on whistleblowing set out 10 recommendations for change (31-page / 12.23 MB PDF) in 2019 and called for a radical overhaul of the whistleblowing legislation.

The Department for Business and Trade (DBT) is leading the review and research, focusing heavily on the definition of ‘worker’ for whistleblowing protection purposes. Key questions to be considered include how the whistleblowing framework facilitates disclosures and protects workers; whether whistleblowing information is available and accessible; what the wider benefits and impacts of the whistleblowing framework have been; and what best practice looks like in responding to disclosure.

The incidence of whistleblowing complaints whether in the EU, UK or globally has grown in recent years across all sectors, according to employment law expert Sue Gilchrist of Pinsent Masons. “The rising profile of whistleblowing is driven in part by the need to uncover allegations of sexual harassment following the ‘MeToo’ movement, as well as the increasing ESG expectations on businesses. The legal framework around whistleblowing has been a critical area of legal compliance for employers, but the UK is in danger of falling behind on developments in this field,” she said.

Litigation expert Fiona Cameron said that organisations “must be prepared to deal with whistleblowing complaints in a timely, efficient and effective manner, if they are not to make things worse”.

“Viewed as an excellent source of information in the drive to improve regulatory compliance and accountability in particular, many jurisdictions now have, or are planning, not only legislation guaranteeing whistleblower protection and encouraging more to come forward, but also requiring employers to have in place suitable channels for whistleblower reporting which are properly resourced, accountable and protect confidentiality,” she said.

“Responsible businesses should ensure that they have in place a policy and procedure for dealing with the emergence of whistleblower complaints. There is a growing recognition that even where not currently a legislative requirement, these can help to demonstrate a culture and commitment to compliance generally,” she said.

In announcing the review this week, the government has stated that “whistleblowing is a crucial source of evidence for authorities tackling corruption, fraud and other economic crime, as these activities and their perpetrators can only be exposed by insiders”. Global investigations specialist Neil McInnes, also of Pinsent Masons, hailed whistleblowing as an equally important tool to detect and prevent financial crime risks for companies.

“In order for companies to demonstrate they have effective compliance programmes to detect and prevent financial crime risks, the existence of secure speak-up channels is critical as well as demonstrable actions to ensure these channels are well-known and that employees and others feel comfortable accessing them,” said McInnes.

“Across the world, law enforcement agencies are increasingly vetting these processes and, importantly, seeking to interrogate how corporates have dealt with reports they have received in a timely manner, triaging their internal investigations appropriately,” he added.

In addition to any legislative changes to come as a result of the review, having appropriate whistleblowing protections in place is also a key requirement of the 2018 UK Corporate Governance Code, which is currently being reviewed by the Financial Reporting Council (FRC) for the first time.

The Code already includes requirements for there to be a means for the workforce to raise concerns in confidence and – if they wish – anonymously, and for the board to routinely review this and the reports arising from its operation. Companies are also required to ensure that arrangements are in place for the proportionate and independent investigation of such matters and for follow-up action.

“A business invested in long-term sustainability is expected to have whistleblowing and grievance procedures incorporating confidentiality and independent investigation. There should also be board level responsibility and review of whistleblowing procedures and reports. Any expansion or new detail on whistleblowing provided as part of the FRC’s review will be notable,” said Gilchrist.

The DBT’s research stage on the whistleblowing framework is set to be concluded by Autumn 2023.