Corporate whistleblowers handed greater protection published in Financial Director

Employers should review existing employment contracts and policies in light of change to whistleblowers' protection

By Kate Boguslawska, Saunders Law, 30 Oct 2013

IT HAS BEEN a busy year for HR rulemakers, with the implementation of various changes introduced by the Enterprise and Regulatory Reform Act 2013 and the Employment Tribunal (Constitution and Rules of Procedure) Regulations 2013, which have all come into force this year.

The most discussed change must be the one to whistleblowers' protection. We have seen examples of high-profile whistleblowing cases in the financial and social sectors - however, the fear within industry is that the number of whistleblowing cases will increase significantly if employers do not react quickly by introducing sufficient policies and training.

One of the most significant points to address for those making a disclosure is that it must be 'in the public interest'. Consequently, if they blow the whistle about breaches of their own contract of employment, they will not be entitled to protection from detriment or dismissal. However, this could offer an employer a false sense of security because it is sufficient for the employee to have 'a reasonable belief' that his disclosure is in public interest to pass the test.

The disclosure does not have to be ' in good faith' any more, although a tribunal may reduce the compensation by up to 25% if it is not.

Unless employers demonstrate that they have taken all reasonable steps to protect whistleblowers from any detriment suffered at the hands of their colleagues, they will be vicariously liable for the actions of their workers.

Employers should critically review existing employment contracts and policies. They should set policies and implement procedures identifying the proper channels for voicing and investigating concerns. Policies should clearly state that no detriment will be suffered by a whistleblower, and emphasis should placed on sufficient training of the workforce.

Other important changes include the removal of the qualifying period for political belief dismissals. If employees are dismissed because of their political beliefs or affiliations, they do not need to demonstrate that they were employed for a qualifying period (two years, or a year if they were employed before April 2012) in order to bring an unfair dismissal claim.

Pay the fee

A tribunal fee-paying system has also been introduced. This divides claims into 'minor claims' (type A claims), such as unlawful deduction from wages or statutory redundancy payment, and 'complex claims' (type B claims), including unfair dismissal, discrimination and whistleblowing. Type A claims now require a lodging fee of lb160 and a hearing fee of lb230, while type B claims require a lodging fee of lb250 and a hearing fee of lb950.

Employers will pay a fee of lb160 for a counter claim, and lb400 to lodge an appeal with the EAT (as well as a further hearing fee of lb1,200).

Settlement agreements have replaced compromise agreements. Before, employers were wary of offering compromise agreement to their employees, in case they complained that their dismissal was predetermined and therefore unfair. Now, in the spirit of pre-termination negotiations, employers are able to offer a settlement agreement at any time, regardless of whether there is an existing dispute. Because these negotiations work on a 'without prejudice' basis, neither party can refer to it in ensuing proceedings if no agreement is reached. However, it is worth noting that this rule only applies to unfair dismissal situations and not where a claim for automatic unfair dismissal or discrimination may arise; furthermore, employers must comply with the new ACAS Statutory Code of Practice.

Employee shareholder contracts have also been introduced, which allows employees to give up their employment rights such as a right to claim unfair dismissal or a redundancy payment in return for at least lb2,000 worth of shares in the employer's company. In order to take advantage of the scheme and understand it, an employee must obtain independent legal advice before signing up. This is to give protection from undue influence on the part of the employer.

Meanwhile, third-party harassment provisions that were in place from the Equality Act 2010 have been removed. This means that the employer will no longer be vicariously liable for harassment of employees by a third party (such as a customer or contractor).


Kate Boguslawska is a solicitor at Saunders Law



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