Government reforms (3): Whistle-blowing update

whistle-blowingRESPONSE TO CALL FOR EVIDENCE

What do we already know?

At the same time as making changes to the whistle-blowing legislation in July 2013 (see our May 2013 Newsletter Government reforms finalised) the Government issued a Call for Evidence to find out the public’s views in a number of areas.

What’s new?

The Government has responded to the comments made following its Call for Evidence. The response is available here and in summary:

  • Guidance and model policy: The Government will produce a model whistleblowing policy (non-mandatory) and provide better guidance for employers and individuals on how the legislation works. The Government hopes to publish the Guidance by the end of this year. (The Government appears to have rejected the adoption of a Code of Practice, as called for and drafted by Public Concern At Work). The Guidance will clarify that:
  • the legislation is a remedy, not a protection;
  • legislation addresses the detriment an individual suffers, not the matter about which a disclosure is made; and
  • a whistle-blower has to take certain steps to enforce their rights under the legal framework.

In addition, the Government will look at ways to promote positive examples of effective whistle-blowing policy and procedure, highlighting tangible benefits for organisations.

  • Categories of disclosure: The Government will improve guidance on what types of conduct the categories cover. However, the Government is unable to commit to any change in this area at present but will keep it under review. In particular, it acknowledged that “the abuse and misuse of power” and “gross waste or mismanagement of funds” may not be captured by existing categories. However, following legal advice, the Government considers that the introduction of this category would create too much legal uncertainty.
  • Methods of disclosure: The Government will improve guidance in this area. However, the Government does not intend to change the methods of disclosure at present. It has taken two steps recently to improve the position for whistle-blowers (introducing protection where detriment is suffered through the action of co-workers and adding Members of Parliament to the list of prescribed persons).
  • Prescribed persons:
  • The Government intends to retain the statutory process for updating the list of prescribed persons but will review the list annually. Changes will be made to the list in respect of the Civil Aviation Authority and the regulatory bodies for health and social care workers. Consideration is being given to the inclusion of other bodies.
  • The Government will also analyse the current referral system in place by which Tribunals may refer whistleblowing allegations raised in claims to a regulator.
  • The Government will introduce a duty on prescribed persons to report annually on what whistleblowing has occurred.
  • Definition of worker: The Government will include student nurses in the scope of the whistleblowing legislation. Following the case of Clyde and Co LLP and another v van Winklehof (see our update here) it is clear that members of LLPs qualify for protection as workers, so there is no need to legislate in respect of them. With regard to remaining groups, such as non-executive directors, solicitors, police officers and consultants, the Government does not intend to legislate in respect of their position but will keep this area under review.
  • Job applicants: The Government had asked whether job applicants experience difficulty, having blown the whistle, when finding new jobs and, if so, whether they needed protection under the whistle-blowing legislation. The Government response is that there is need for a culture change, rather than a change in legislation. Anyone blacklisted already has redress under the blacklisting legislation, or else they may have a remedy under the Data Protection Act 1998.
  • Financial incentives: The Government did not consider the evidence strong enough to introduce a system of financial incentives for whistle-blowing. The Government is aware that the Financial Conduct Authority and the Prudential Regulation Authority are due to publish statements on the impact of incentivising whistle-blowers financially and this report may be helpful to certain bodies when forming their whistle-blowing policies. In due course, the Government may consider whether financial incentives would be beneficial as a way to encourage openness in specific organisations or in very specific types of cases.

What are the implications?

There is little suggestion of legal reform in the Response, which will be a relief to many employers. The expectations were that the Government would introduce more extensive reform and the proposals have certainly fallen short of the expectations set by the Whistle-blowing Commission.

The Government instead believes that what is needed now is a shift in culture, away from negative perceptions (particularly of whistle-blowers themselves) and towards better understanding of the law, as well as the benefits of compliance. In particular, the Government recognises that the whistle-blowing framework is about addressing the workplace dispute that can sometimes follow a disclosure, rather than the malpractice that is the subject of the disclosure. Its focus is therefore on improved guidance and steering employers towards positive behaviours, rather than further prescriptive measures.

However, it is yet to be seen whether this shift in culture is achievable without more extensive legislative reform and it will be interesting to see whether the scope of the amendments to the regime is broadened as the legislation makes its way through Parliament.