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The Importance of a Clear Whistleblowing Policy

20th April, 2016

The impact of mishandling whistleblowing became evident last month when construction firm Balfour Beatty paid out £137,000 to a former employee for unfair dismissal and victimisation.

The employee became a whistleblower having made a protected disclosure regarding his concerns about the quoting of a project for the Welsh Government. The employee was dismissed and took Balfour Beatty to an employment tribunal.

The company admitted failing to support the employee and settled the case a fortnight before it was due to be held in public, with the caveat it had not committed any criminal activity or breached any legal obligations regarding the project in question.

But the size of the settlement points to the dangers of failing to implement a clear whistleblowing policy and the potentially costly implications.

Workers who blow the whistle on alleged wrongdoing at work are protected by the Public Interest Disclosure Act (PIDA) 1988, which states they have the right not to be dismissed or suffer any detriment as a result of making a ‘protected disclosure’.

“This is where it is important for businesses to take legal advice,” said Helen Watson, Head of Employment at Aaron & Partners. “Every employee and manager at every level of a business must clearly understand when and how they are protected.

“If you do not have a whistleblowing policy, if it is unclear or if it is not legally sound, the result can be an employee suffering bullying or dismissal. If a court finds a firm guilty of a breach of PIDA there is no upper limit on the penalty they can hand the employer, as there is in other unfair dismissal cases.”

That means that firms could face crippling legal costs if they do not ensure they handle whistleblowers correctly.

In order to be protected under PIDA a worker must:

  • Make a disclosure of information.
  • Reasonably believe the information shows that one of the following has or may occur:
    • A criminal offence
    • A breach of any legal obligation
    • A miscarriage of justice
    • Danger to the health and safety of any individual
    • Damage to the environment
    • Deliberate concealment of any of the above
  • Reasonably believe the disclosure is in the pubic interest
  • Meet further conditions if disclosing to a regulator or the press.

Where employees are not dismissed, or are not direct employees (for example sub-contractors), denial of training, demotion and other injury to feelings can lead to additional compensation.

“The subjective nature of the legislation means it is very easy for managers and employers to get this wrong,” said Helen. “A clear whistleblowing policy should ensure that employees trust they can raise concerns without negative consequences and that managers have a firm understanding of the process.

“Drawing up a robust policy builds trust and makes it easier for businesses to protect their reputation by addressing potential issues before they become too big.”

If you need any advice on drawing up an effective whistleblowing policy please contact [email protected] or call 01244 405565.

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