Implementing the EU Directive on Whistleblowing: Lessons learned from UK whistleblowing legislation PIDA over two decades
As new whistleblowing rules roll out across the EU today, Protect and WIN look at what’s been learned from the UK’s whistleblowing legislation
Today – 17 December 2021- is the official deadline for the EU Whistleblowing Directive to be transposed by Member States. And, as the EU Whistleblowing Monitor demonstrates, it’s been a slow start with only a handful of the 27 EU countries meeting today’s deadline to implement the new requirements.
Whistleblowing International Network (WIN) and Transparency International (TI) have been analysing the progress of European governments over the two year transposition period which has varied in quality as well as speed.
Only a small number of countries (currently five – Sweden, Denmark, Portugal, Malta and Lithuania) have adopted new legislation, 13 have draft proposals issued but of these, only 3 are being discussed in Parliament – France, the Netherlands and now Estonia. The remaining 9 have still not shared draft laws publicly.
Read: TI-WIN Full Progress Report: Are EU Countries taking whistleblower protection seriously?
Read: TI-WIN: Are EU Countries Failing to Protect Whistleblowers?
This isn’t an easy process for many countries – those with relevant laws need to decide what to keep and what to reform, those without need to think about where to start with innovative structures and potentially the creation of new public institutions. Some are struggling with whether to adopt a broad approach – including a wider definition of wrongdoing to include breaches of national law – or a narrow interpretation of whistleblowing limited to breaches of EU law.
The UK introduced its whistleblowing law – the Public Interest Disclosure Act (PIDA) – in 1998. It is incorporated as Part IVA of the Employment Rights Act 1996.
Protect, who were key in PIDA’s introduction, recognise PIDA needs reform, and are campaigning to “Fix UK’s Whistleblowing Law”. Protect is proposing a wide range of reforms to PIDA as we set out in our draft Whistleblowing Bill available here.
As we approach PIDA’s 30th anniversary in 2023, here are a few things Protect has learnt over the years about what works when applying the law to protect whistleblowers and improve workplace cultures.
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We set out below 12 lessons on:
1. Defining the public interest
2. Protecting all internal reporting, not just via whistleblowing channels
3. Persons responsible for wrongdoing other than the employer
4. Whistleblowing concerns don’t need be “serious”
5. Whistleblowing rights from the outset of employment
6. Wide discretion to the Courts to protect external disclosures
7. The benefits of interim relief
8. Adequate compensation and remedies
9. Simplicity in reporting to regulators
10. Hurdles in legal tests for dismissal
11. Information does not need to be original
12. The importance of personal accountability.
Initially, PIDA required disclosures to be made “in good faith” but this led to far too many disputes about the whistleblower’s motivation, and in 2013 this was replaced with a “public interest” test. This leaves a wide discretion for the Courts to interpret what counts as being in the public interest. Case law has suggested that factors to consider include: the number of people involved, the impact of the wrongdoing on those affected, whether the wrongdoing was deliberate or accidental, and the seniority of the wrongdoer.
While it makes sense that private employment complaints are dealt with through separate employee grievance policies, there is scope to widen whistleblowing protection to facilitate reporting of toxic workplace cultures, including workplaces where there is a prevalence of sexual misconduct, racial harassment or bullying. Ultimately it may be in the public interest to identify these concerns through confidential reporting channels.
Protect suggests that qualifying disclosures should include any improper behaviour that may harm the reputation or financial wellbeing of the employer. In whistleblowing rules introduced by the Financial Services Regulators in the UK a wider definition of “reportable concern” is used than appears in the legislation. Under newly published ISO Guidelines on Whistleblowing Management Systems, any reporting of wrongdoing – defined as ‘action(s) or omission(s) that can cause harm’ – must be promoted and protected. The new law in Denmark explicitly includes reports of workplace sexual harassment within whistleblowing, and it will be interesting to watch developments there.
PIDA says very little about how a concern may be reported – a qualifying disclosure can be made to an employer, a legal adviser, a Minister of the Crown or a prescribed person (regulator). There is also potential for protection for those making wider disclosures. While the Directive requires employers to establish a confidential whistleblowing channel, the UK framework works well in simply facilitating a whistleblower to raise their concern to anyone who may count as the “employer” which is interpreted to mean someone higher up in the chain of command.
‘Everyday’ whistleblowing is thus promoted – we want to see people naturally report worries or concerns to their line managers in the first instance. It is in nobody’s interest to restrict reporting to the “whistleblowing line” not least as this will create serious bottlenecks in the free flow of information and delay actions to prevent any risks of harm.
PIDA also protects those who raise a concern with someone other than their employer where responsibility for suspected wrongdoing lies outside of their own organisations. A good example would be an agency nurse who witnesses abuse in the care home where they are contracted to work: they should be protected if they raise a concern with the care home manager, as well as in line with the agency’s reporting channels.
PIDA uses the formulation of past, present or likely wrongdoing, and says nothing about the seriousness of the concern needed to grant whistleblowing rights. So, a whistleblower is protected for reporting any crime which has been, is being or is likely to be committed or where the environment has been, is being or is likely to be damaged. The formulation of a breach of “any legal obligation” is helpfully wide – it can extend to breach of employment contracts where a wider public interest can be demonstrated (for example, an employer is breaching a large number of contracts). Of course, if a whistleblower is unable to demonstrate the public interest in the information, then the disclosure may not qualify for protection.
However, the absence of any “seriousness” test means that whistleblowers are encouraged to raise their concerns at the earliest stage, without having to demonstrate evidence of harm. This also means whistleblowers are discouraged from attempting to investigate the matter themselves – whistleblowers are witnesses, not investigators.
In the UK, from the outset it has been “automatically” unfair to dismiss a whistleblower for raising concerns, which means there is no requirement of two years of service with an employer, as there is for other employment rights. This is important because research by Protect shows it is often new recruits who spot malpractice – a fresh pair of eyes or ears may uncover a risk or culture that has become “normalised” for longer standing staff. Having the right to protection from the outset of a job – and ideally before, at the application stage – will encourage whistleblowers to speak up.
Just as in the EU Directive, PIDA protects whistleblowers whether they raise their concerns internally to their employer, externally to a ‘competent authority’ or ‘prescribed person’ or more widely to the press or public. Additional tests are applied to any wider disclosure to be protected. In particular, the whistleblower must demonstrate it was reasonable in all the circumstances to make a wider disclosure.
The law sets out some factors which can be considered in applying the test but leaves a wide discretion to the courts to assess all the circumstances of the case. This is vital to encourage whistleblowers to disclose public interest information, which is essential to uphold the freedom of expression and the public’s right to know as well as enable a free press to fulfil its watchdog role in a democratic society.
In the UK, a whistleblower who is dismissed may bring an early claim for “interim relief” within seven days of the date of termination. If a tribunal judge – looking at the papers alone – decides that there is a “pretty good chance of success” then interim relief can be granted which means the contract continues and importantly, the whistleblower continues to be paid while awaiting a full hearing. With some cases taking over a year to reach a full hearing at tribunal, this can be a powerful tool.
However, the seven-day time limit to bring a claim for interim relief is too short for most whistleblowers. Understanding the law, finding effective legal advice and submitting a claim within a week of the devastating loss of a job is often not possible. While there needs to be a balance between the rights of the employee and the needs of employers, offering three or four weeks to bring a claim for interim relief would make a big difference.
It is interesting to note that in Ireland, there is a proposal to extend interim relief to any form of penalisation, not just dismissal claims.
Read more: IBA Report: Are whistleblowing laws working?
Read more: How to claim interim relief in the UK
The UK does not have a system of financial rewards for whistleblowing (although they exist in some areas such as for whistleblowing on cartels). This is a subject hotly contested by those who see employment tribunals as inadequate in providing proper recompense. However, under PIDA there is no cap on the damages that a whistleblower can receive if they are successful at tribunal – and this means that life-long career opportunity loss and reputational damages as well as injury to feelings can be claimed.
The challenge in the UK is ensuring that there is access to justice: a lack of available support in the tribunal system is a wider failing in the UK, and close attention should be paid to the EU Directive’s provisions for access to legal advice, legal aid funding and other support measures.
The Directive remains silent on the issue of financial rewards to whistleblowers, leaving Member States free to provide for such (and other EU instruments explicitly make rewards possible.)
Protect has sampled public opinion over the years to see what the general public thinks of rewards, and asked whistleblowers contacting the advice line about what drives them: invariably it is the desire to see the risk of harm stopped, not personal gain. Research in the UK suggests that rewards may lead to inconsistency in regulators’ expectations of both individuals and organisations.
The first list of “prescribed persons” of competent authorities to whom external reports could be made under PIDA comprised 37 different bodies – the list today is over 90 strong. Ireland follows a similar approach, as will the new framework in Sweden – other countries are considering a single external reporting authority, such as in the Czech Republic and Romania.
While there are merits in protecting whistleblowers reporting concerns to a wide range of regulators, this nevertheless creates complexity and inconsistency around who is included and who is not, which can make life difficult for whistleblowers. In Protect’s view, law enforcement bodies and regulators should be automatically prescribed. Alternatively, a whistleblower should be protected if they raise a concern with any regulator or law enforcement body and reasonably believe that the body’s remit covers their concern.
A co-ordinating body, such as the proposed “Protected Disclosures Office” in Ireland may address the complexity and bring some helpful simplicity to the whistleblower’s journey. Protect proposes a Whistleblowing Commission in its draft bill.
Read more: Protect’s legal reform campaign
A lesson we’ve learned from PIDA is that the whistleblower has many hurdles to jump to succeed in a legal claim. The test for protection from detrimental treatment is whether any such act or deliberate failure to act is “done on the ground that” the worker had made a protected disclosure. However, a more stringent test for unfair dismissal requires the whistleblower show that “the reason (or, if more than one, the principal reason)” for dismissal is that they made a protected disclosure. This is problematic on two counts.
First, under UK employment law only a contractual employee can be dismissed, so other persons considered workers can only bring detriment, not dismissal, claims (except in circumstances where individual personal liability can be identified).
Second, the “reason or principal reason” causation test is too difficult for many claimants to prove. An employer may be incentivised to seek other reasons other than the reporting to dismiss the whistleblower, and while tribunals will look to find the ‘real’ reason, this creates a complexity and imbalance in the legislation against the whistleblower. A broader test for dismissal – perhaps bringing it in line with the detriment test – would help, as would a reversal of the burden of proof, as is required by the EU Directive.
Under PIDA (s43L Employment Rights Act 1996), whistleblowers are encouraged to come forward with their disclosures whether or not the information is original – it does not matter if the person receiving it is already aware of the information. Most whistleblowers have a lonely journey, raising their concerns in isolation. It is unsurprising if an employer, regulator or journalist receives the same information from two sources, who may be entirely unaware of each other’s disclosure. When reporting information wider than to prescribed persons, such as to the media, there is discretion for a judge to grant protection to the whistleblower, if the disclosure can be found to be “reasonable in all the circumstances” (see 6 above).
However, as we have seen in the case of the Luxleaks whistleblower in Halet v Luxembourg the European Court of Human Rights (ECtHR) has taken a different approach. The Court suggests that where the information has been publicly disclosed, there needs to be a proportionate balance between the whistleblower’s freedom of expression and any harm to the employer. While accepting that there was a public interest in the Raphael Halet’s disclosures, the Court considered that the information disclosed by Halet was not fundamentally new, given the disclosures made by another whistleblower, Antoine Deltour. The lack of “new essential or unknown” information in the documents that Halet gave to an investigative journalist mean his criminal prosecution did not constitute a breach of his human rights. The case has been referred to the Grand Chamber of the ECHR and we await a hearing in February 2022 with keen interest.
Read more: Halet v Luxembourg case analysis
Personal liability for detrimental treatment
Changes have been made to PIDA since its introduction to recognise the important role that individuals play in the detriment whistleblowers suffer. Organisations can be held vicariously liable for the wrongdoing of their staff (s 47B Employment Rights Act 1996), although they may bring a defence that they took all reasonable steps to prevent such detriment occurring. A worker who mistreats a whistleblower can be held liable in their own right for losses flowing from that mistreatment. Protect intervened the case of Timis v Osipov which established that claims against individuals can include losses flowing from the role an individual has played in a decision to dismiss the whistleblower (in this case in excess of £1.7 million GBP).
After the global financial crash, financial services regulators in the UK introduced detailed whistleblowing rules in 2016 under the “Senior Managers Regime” and make clear that detrimental treatment of a whistleblower could call into question the fitness and propriety of an individual in a senior role in a regulated firm. Breaching the whistleblowing standards may lead to individuals being fined or sanctioned, and could affect their ability to practise in the industry. In a well-publicised case, the Chief Executive of Barclays Bank was fined by the Financial Conduct Authority for failing to act with due care, skill and diligence toward an anonymous whistleblower.
Accountability for culture
In the Healthcare Sector, a dedicated whistleblowing office for the National Health Service collages and shares data on organisational “Freedom to Speak Up” culture metrics and reviews cases where an individual complains that their concerns have been ignored or they have suffered retaliation. Regulatory intervention can lead to the downgrading of a hospital’s status for its governance failures including whistleblowing mismanagement.
Successful enforcement against individuals for breaches of whistleblowing law remains uncommon, but the possibility of individuals being held to account may have a powerful deterrent effect on those in senior roles treating whistleblowers badly, or ignoring their concerns.
Thinking of blowing a whistle?
If you want to blow the whistle to your employer and they don’t have a policy to follow, contact our Advice Line on 020 3117 2520 or send us an email. We can help you think through who best to raise your concerns with, and how to express the concern as a matter of public interest, rather than a complaint about how you have been treated as an individual.
Despite the EU mission to harmonize whistleblower protection across Europe, the delayed and differing approach of Member States to implementing the Directive’s minimum standards into 27 diverse legal systems will mean a continued piecemeal and patchy framework across the Union territory and it is unclear whether all of the new national laws comply with the requirement for far-reaching legal reforms. As the Directive has ‘direct vertical effect’ EU citizens in theory should not suffer detriment from improper transposition by their government.
Lack of legal clarity in the protection offered to whistleblowers may discourage individuals from speaking up about harms to the public interest. EU governments can learn a lot from the implementation of PIDA over the last 25 years.
About the Authors:
Elizabeth Gardiner is a lawyer and Chief Executive of Protect which is a WIN Member. Protect has provided free, independent and confidential advice to whistleblowers and helped employers introduce effective whistleblowing arrangements since 1993.
Ida Nowers is Law and Policy Coordinator at the Whistleblowing International Network and leads the EU Whistleblowing Monitor which will continue to track implementation of the EU Directive across the 27 EU Member States.
This article will be found on WIN’s website here