The Public Interest Disclosure Act 1998

Reasonable belief

According to the Government's guide, the worker's belief that information tends to show a relevant failure "need not be correct - it might be discovered subsequently that the worker was in fact wrong - but the worker must show that he [or she] held the belief, and that it was a reasonable belief in the circumstances at the time of the disclosure". This seems broadly to reflect the approach currently taken by tribunals to the analogous phrase "reasonably believed" used in certain of the health and safety victimisation and dismissal provisions contained in ss.44 and 100 of the ERA (see Whistleblowers at work 2: the statutory context).

It is immaterial whether a relevant failure occurred, occurs or would occur in the United Kingdom or elsewhere, and whether the law applying to it is that of the UK or of any other country or territory (s.43B(2) - although a worker will not be protected against victimisation or dismissal in relation to the disclosure of such a failure if under his or her contract he or she ordinarily works outside Great Britain). Similarly, it is not in principle relevant whether the information disclosed is regarded as confidential or not under the common law or in equity (although this may at the margins affect the overall reasonableness of certain types of disclosure - see below ).

Crime precludes protection

A disclosure is not, however, a qualifying disclosure "if the person making the disclosure commits an offence by making it" (s.43B(3)). This provision therefore removes protection from a disclosure which of itself constitutes a criminal offence, the classic example being a disclosure prohibited by the Official Secrets Act 1989. It is submitted that the subsection as drafted does not, as has on occasion been suggested, remove protection where an offence is committed only in the course of obtaining information, although this might be relevant to the question of remedies.

In the absence of a criminal prosecution or conviction for a disclosure offence, the issue of whether or not any such offence has been committed may effectively have to be determined in employment tribunal proceedings. In this context, the government spokesman in the House of Lords, Lord Haskel, suggested³ that "a high standard of proof would be required before the tribunal could decide whether an offence has been committed." And Lord Borrie - one of the Bill's main sponsors - said⁴ that if a tribunal "is faced with the argument on the part of the employer that the employee, by disclosing the malpractice, has committed a criminal offence, that must be proved before the tribunal to the criminal standard: that is, beyond reasonable doubt".

The disclosure of information in respect of which a claim to legal professional privilege could be maintained in legal proceedings is not a qualifying disclosure if it is made by a person to whom the information has been disclosed in the course of obtaining legal advice (s.43B(4) - see also s.43D below ).

PROTECTED DISCLOSURES

As we indicated in our introduction, a qualifying disclosure is regarded as a "protected disclosure" only if it is made in accordance with any of ss.43C-H of the ERA. Varying conditions are imposed, depending upon the recipient of the disclosure and, in particular, on whether disclosure is made within the workplace or externally.

Disclosure to employer

Under s.43C, a qualifying disclosure will be a protected disclosure "if the worker makes the disclosure in good faith":

A disclosure will be made in good faith if it is, in fact, made honestly, even though it may be made negligently or without due care. In principle, it would seem that a disclosure will be made to the employer if it is made to a person senior to the worker making it, who has express or implied management responsibility over the worker. In the words of Lord Borrie⁵: "... as soon as the [worker] talks to someone who is a senior person - a line manager or someone in line management - [that person] is part of the organisation of the employer and a disclosure to him, or talking to him, is a disclosure within new s.43C." Merely making a disclosure to a colleague of similar status will, therefore, probably be insufficient to trigger protection.

It also seems clear that effective disclosure must actually be made, or at least attempted. In this context, Lord Haskel observed that a disclosure made to the employer or via internal procedures is likely to get through, rather than be merely attempted. But, he said, "even if the worker passes information on internally and it does not reach the right person who is responsible for dealing with such matters, it seems to me that a tribunal is likely to find that the [worker] has disclosed to the employer and is protected, provided that he acted in good faith."⁶ Nevertheless, merely expressing an intention to disclose information or proposing so to do will almost certainly be ineffective and unprotected.

By analogy with the Court of Appeal's decision in Mennell v Newell & Wright (Transport Contractors) Ltd⁷ (dealing with the assertion of statutory rights under s.104 of the ERA), workers will probably need to be able at least to "identify when, where, to whom or in what terms" any alleged disclosure took place. On the other hand, it is worth noting at this point that it is generally provided under the new provisions that "disclosure" of information includes bringing the recipient's attention to information of which he or she is already aware (see s.43L(3) of the ERA).

Disclosure to persons other than a worker's employer within the meaning of s.43C(1)(b) could, it is submitted, include an agency-employed nurse who raises a concern about a relevant failure with the care home in which he or she works rather than with the agency; a worker raising a concern with contractors or subcontractors working in or for his or her employer's undertaking, or on the same site or project; a worker employed by a contractor or subcontractor who raises a concern with the principal; and a worker in a firm of auditors who raises a concern with a client.

Authorised procedures

While s.43C(2) does not of itself require employers to establish whistleblowing or other appropriate procedures, the structure of the provisions taken as a whole encourages it (see especially our sections "Other external disclosures" and "Reasonableness " below).

It was suggested by Lord Haskel⁸ that such procedures could build on existing grievance procedures, "or it may be more appropriate to designate a senior manager, the company's lawyer or an auditor as the person with whom concerns should be raised". This view is reflected in the Government's guide, which states: "An existing company procedure may suffice, or such procedures could perhaps be adapted, for example to facilitate confidential disclosures by workers. Internal procedures that are simple to use, readily accessible and which workers are encouraged to use are more likely to result in disclosure of concerns to the employer first, rather than externally. Employers will wish to consider the best way to secure trust and confidence in such procedures to ensure that they will be used, perhaps by involving the workforce, or their representatives."

This last observation emphasises the fact that trade unions have been accorded no express role within the statutory framework on public interest disclosures. Both the Government and the Bill's sponsors nevertheless consistently expressed the view during parliamentary debate⁹ that unions (at least where they are recognised by the employer) can have a valuable role to play in at least framing relevant procedures, "and in many cases it will be appropriate for them to have a formal role so that disclosure to them would be covered by s.43C(2)".

Disclosure to legal adviser

By virtue of s.43D, a qualifying disclosure made "in the course of obtaining legal advice" will be protected, whether or not it is made in good faith. This is the only circumstance in which the good faith requirement does not apply. The legal adviser (assuming the disclosure could be subject to a claim of legal professional privilege) may not, however, of his or her own volition make any further protected disclosure of information obtained under this provision (see s.43B(4) above ).

Section 43D protection will probably cover disclosure by a worker for the purpose of obtaining legal advice from his or her union's solicitor or legal advisers. Lord Haskel pointed out that unions can organise themselves in various ways to ensure that individuals have protection if they discuss confidential matters. He observed that one union had set up a "whistleblowers' legal hotline", while others have general enquiry points for legal advice. "Disclosures made to union-based legal advisers in these ways will", he surmised, "of course be protected under s.43D."¹⁰ Broadly concurring with that view, Lord Borrie referred to a union offering telephone legal advice through its national legal office, and opined that disclosures made in such circumstances - "that is, the detailed asking for and giving of advice" - are fully protected.¹¹

Disclosure to Ministers

Where a worker is employed by a person appointed under any enactment by a Minister, or a body any of whose members are so appointed, a qualifying disclosure may be made "in good faith to a Minister of the Crown" (s.43E of the ERA).

This provision protects, for example, workers employed by most government quangos and other non-departmental government bodies against victimisation or dismissal by the employer if they make a qualifying disclosure directly to the sponsoring (or relevant) government department or to a Minister. It will similarly cover such disclosures made by, amongst others, workers employed by the utility regulators, "next-step" government agencies and NHS trusts. Concerns do not have to be raised with the employer before disclosure under s.43E is made.

Disclosure to "prescribed persons"

The main outlet for a disclosure of information outside the workplace for most workers, however, is provided by s.43F of the ERA. Under this provision, a qualifying disclosure is protected if it is made in good faith to one of the prescribed persons listed in the Public Interest Disclosure (Prescribed Persons) Order 1999¹² ("the 1999 Order"), and:

In these circumstances, a worker will be able to go directly to a prescribed person, whether or not he or she has first raised the matter internally with his or her employer. If, however, the matter has previously been raised internally, the reasonableness of his or her belief in the truth of the information disclosed or any allegation contained therein will necessarily be informed by any response that may have been received from the employer.

Other external disclosures

By virtue of s.43G(1)(a)-(e), any more general external qualifying disclosures (except those relating to "exceptionally serious" failures - see below ) will be protected only where:

The conditions contained in s.43G(2)(a)-(c) are:

Reasonableness

In determining the question of the reasonableness of a disclosure under s.43G(1)(e) above, regard must be had, in particular, to:

It will be observed that this list is indicative, rather than exhaustive, of the factors relevant to reasonableness.

The reference to the identity of the recipient ensures, for example, that cognisance will be taken of something akin to the common law public interest requirement that the disclosure of confidential information should in principle be made to an appropriate recipient - that is, a person who "has a proper interest in receiving it" (see Initial Services Ltd v Putterill¹³ - see generally Whistleblowers at work 1: contract, confidentiality and the public interest). It has been established that, in many cases, the public interest will best be served by making any external disclosure in the first instance not to the press or other parts of the media, but to the police or some other responsible body (see Lion Laboratories Ltd v Evans¹⁴). Such other responsible bodies or persons are many and varied and could include, depending on the circumstances: a professional body that has responsibility for standards and conduct in a particular field (the example given in the Government's guide); a worker's trade union; a non-prescribed regulator; a Member of Parliament; or company shareholders.

"Exceptionally serious" failures

As a consequence of s.43H, a number of the requirements relating to general external disclosures discussed above, in particular the conditions laid down by s.43G(2), do not apply to the disclosure of information relating to "exceptionally serious" failures. In this situation, a qualifying disclosure will be protected where:

The Government's guide asserts that under s.43H(1)(d) "the relevant failure must be exceptionally serious. This will be a matter of fact, and not simply a matter of the worker reasonably believing it to be exceptionally serious." If this view is correct, a worker will be deprived of protection if he or she is in fact mistaken about the existence or seriousness of the failure, no matter how honestly or honourably he or she has behaved. In contrast, we would submit that, referring generally back to s.43B (above ), provided that the worker has reasonable grounds to sustain his or her belief in the relevant failure, he or she should retain protection if that failure would be objectively judged to be exceptionally serious on the basis of the worker's knowledge at the time of disclosure.

It has been suggested that the sexual abuse of a minor would be such an exceptionally serious matter within s.43H¹⁵, and that a worker who disclosed the failure directly to the police would be protected. This would accord with the operation of the provision as envisaged by the Government during the Committee stage of the Bill in the House of Commons¹⁶: "The Government firmly believe[s] that where exceptionally serious matters are at stake, workers should not be deterred from raising them. It is important that they should do so, and that they should not be put off by concerns that a tribunal might hold that they should have delayed their disclosure or made it in some other way. That does not mean that people should be protected when they act wholly unreasonably: for example, by going straight to the press when there would clearly have been some other less damaging way to resolve matters."

"Gagging" clauses outlawed

By virtue of s.43J of the ERA, any provision in an agreement between a worker and his or her employer (whether or not the worker's contract), including an agreement to refrain from instituting or continuing any proceedings under the ERA or any proceedings for breach of contract, is void "in so far as it purports to preclude the worker from making a protected disclosure" [our emphasis].

To the extent stated, this provision precludes the application or enforcement of "gagging clauses" in contracts and secrecy or confidentiality clauses in settlement agreements (including compromise agreements or ACAS conciliated settlement of complaints themselves based on the new provisions). In the latter case, for example, an employee dismissed for making a protected disclosure to his or her employer could not lawfully be prevented by such a clause from making a further protected disclosure of the same or similar information to a prescribed regulator and, in the circumstances set out in ss.43G and 43H above, possibly more widely.

VICTIMISATION AND UNFAIR DISMISSAL

By virtue of s.47B of the ERA, a worker has the right not to be subjected to any detriment by any act, or any deliberate failure to act, by his or her employer on the ground that he or she has made a protected disclosure. This provision governs claims of detrimental treatment short of dismissal or termination of contract for all workers as now defined in the ERA, and cases involving the termination of the contracts of workers other than "employees" (see box).

It also, for the present, applies exceptionally to an employee under a fixed-term contract for a year or more who has agreed in writing to waive his or her unfair dismissal rights. In this case alone, the dismissal of an employee is treated as a "detriment" (s.47B(2) - note that this subsection is to be repealed with the removal of the unfair dismissal waiver provisions by the Employment Relations Bill ("the ERB") currently before Parliament).

In all other cases, the dismissal of an employee (irrespective of length of service or age) by his or her employer will be regarded as automatically unfair for the purposes of the provisions of Part X of the ERA, if the reason or principal reason for dismissal (or selection for redundancy) is that the employee made a protected disclosure (see ss.103A and 105(6A)).

Note: Workers have directly enforceable employment protection rights only against their employer, irrespective of whether disclosure is made to a third party. The employer's actions must be on the grounds or by reason of that disclosure if any claim is to be sustained.

Meaning of "detriment"

The term "detriment" under s.47B probably means no more than "putting [the worker] under a disadvantage" (see, for example, the sex discrimination case of Ministry of Defence v Jeremiah¹⁷). Detriment may be caused by "any act, or any deliberate failure to act" by the employer. This covers positive acts such as, for example, reprimands or disciplinary measures or the transfer of a worker to less satisfying work. It also clearly covers a failure or omission to consider an employee for a pay rise, overtime working, promotion or any other benefit (whether contractual or otherwise), or the deliberate denial of benefits or advantages (including the opportunity to work) afforded to others.

Further, it is strongly arguable that "detriment" includes the threat of a detriment. This would accord with the approach taken to the existing provisions on action short of dismissal on grounds of trade union membership or activities. There, for example, the threat of disciplinary action has been held to amount to "action" taken against employees (see Grogan v British Railways Board¹⁸). And, during debates on the Bill, Lord Haskel said¹⁹ that it seemed to him that "the notion of detriment includes being threatened ... An employee who has made a disclosure to the employer could be threatened with relocation to a remote branch of a company ... where promotion prospects are poorer. That kind of threat is a detriment and even though the worker can be assured that the employer could not lawfully carry out the threat, the fear of the threat may well amount to detrimental action. Any threat which puts a worker at a disadvantage constitutes in itself detrimental action."

Claims of detrimental treatment

A worker may complain to an employment tribunal "that [he or she] has been subjected to a detriment in contravention of s.47B" (s.48(1A) of the ERA). Such a complaint must be made within three months of the date of the act or failure to act to which the complaint relates or, where that act or failure to act is part of a series of similar acts or failures, the last of them (s.48(2)). If the tribunal is of the opinion that it was not reasonably practicable for the worker to present a complaint within the three-month period, it may hear a complaint within such further period as it considers reasonable (s.48(3)).

Where an act extends over a period, the "date of the act" means the last day of that period, and a deliberate failure to act is to be treated as being done when it was decided on by an employer. In the absence of evidence to the contrary, an employer shall be taken to decide on a failure to act when it does an act which is inconsistent with doing the failed act or, if it has done no such inconsistent act, when the period expires within which it might reasonably have been expected to do the failed act if it was to be done (s.48(4)).

The rather tortuous wording on a deliberate failure to act means merely that if, for example, a worker claims that he or she was denied promotion because he or she has made a protected disclosure, the time limit runs either from the point at which the employer promotes another candidate, or from the expiry of the period within which the employer might reasonably have been expected to make an appointment.

On a complaint alleging a breach of s.47B, the burden of proof is placed expressly on the employer to show, on the balance of probabilities, the ground on which any act, or deliberate failure to act, was done (s.48(2) of the ERA). This means that the employer must show both the reasons for doing any act as may be proved to have caused detriment, and that such reasons did not form one of the prohibited statutory grounds (see Barton v The London Borough of Wandsworth²⁰, considering s.48(2) in the context of the health and safety victimisation provisions).

Remedies for detriment

Where a tribunal finds a complaint of detrimental treatment well founded, it must make a declaration and may award compensation to the worker in respect of the act or failure to act complained of (see s.49(1) of the ERA).

Compensation will be an amount (with no upper limit) which the tribunal considers "just and equitable in all the circumstances" having regard to the infringement to which the complaint relates, and to any loss sustained which is attributable to the act or failure which infringed the worker's rights (s.49(2)). This loss will include expenses reasonably incurred by the worker in consequence of the act or failure complained of, and the loss of any benefit which the worker might reasonably have expected to have had but for that act or failure (s.49(3)) and, presumably, injury to feelings (for example, for the stress engendered by the situation - see Brassington v Cauldon Wholesale Ltd²¹).

In ascertaining the worker's loss, a tribunal will apply the same rule concerning the duty of a person to mitigate his or her loss as applies in common law damages claims (s.49(4)). Where a tribunal finds that the act or failure complained of was to any extent caused or contributed to by any action of the worker, it has the discretion to reduce the amount of compensation by such proportion as it considers just and equitable having regard to that finding (s.49(5)). The employment tribunal in Barton indicated that a reduction could legitimately be made under the latter provision if it was proved, for example, that the allegedly aggressive or confrontational "manner" in which the employee (or worker) had made his complaints to managers "contributed substantially to what happened". This should act as a warning to workers to make protected disclosures to their employers in a reasonable manner. It also seems at least possible that tribunals would consider the manner in which information was obtained under this heading.

Unfair dismissal complaints

An unfair dismissal complaint by an employee based on the protected disclosure provisions must be brought within the normal three-month time limit from the effective date of termination of employment. This period may be extended in the usual way if the tribunal is satisfied that it was not reasonably practicable for the complainant to present the complaint in time (s.111(2) of the ERA).

The burden of proving the reason for dismissal will differ depending upon whether or not the employee can establish the requisite continuity of employment. If the employee has been employed for one year or more, the normal burden of proof will apply. The employer will therefore have to show the reason, or principal reason, for dismissal, and that this was an admissible reason within s.98(1)(b) or (2). According to the Court of Appeal, the "evidential burden" will then pass to the employee to "produce some evidence that casts doubt on the employer's reason" (Maund v Penwith District Council²²). Once that evidential burden is discharged, the onus remains with the employer to prove its alleged reason. It should be borne in mind that even if the employer ultimately discharges its burden and establishes an admissible non-protected disclosure reason, this merely prevents a finding of automatically unfair dismissal. The tribunal will still have to consider the reasonableness of the dismissal under the general principles laid down in s.98(4).

An employee with less than one year's continuous employment will need to establish the jurisdiction of the tribunal to hear his or her complaint. The burden of proof will consequently rest with the employee to establish, on a balance of probabilities, that the reason, or principal reason, for dismissal was that he or she made a protected disclosure (Smith v Hayle Town Council²³).

Employees should be aware generally that the manner in which they make a disclosure might not only affect compensation, but could remove them from protection altogether. In Ballinger v Viatel UK Ltd²⁴, the EAT recently upheld an employment tribunal's decision that an employee was dismissed not because he had asserted a statutory right under s.104 of the ERA, but because of the way in which he had asserted it and the gratuitous rudeness used. This took the form of abusing the employer's e-mail policy and system by using offensive language within e-mails and by "copying in" senior managers.

Note: Section 237 of the Trade Union and Labour Relations (Consolidation) Act 1992 is amended to ensure that the withdrawal of unfair dismissal rights from employees who are selectively dismissed while taking part in an unofficial strike or other unofficial industrial action does not apply if it is shown that the reason or principal reason for an employee's dismissal was that he or she had made a protected disclosure. This further protection is not, however, expressly extended to such dismissals which occur under the pretext of allegedly non-selective dismissals during official strikes or other industrial action under s.238 of that Act.

Remedies for unfair dismissal

If an employee is successful in a protected disclosure complaint under s.103A or 105(6A), in principle the normal unfair dismissal remedies - that is, reinstatement, re-engagement or monetary compensation - are available. These remedies are, however, specially modified in the following ways:

If, however, the employer fails to attend the hearing of the application for interim relief, or states that it is unwilling to reinstate or re-engage the employee, the tribunal must make an order for the continuation of the contract of employment from the date of termination until the date of determination or settlement. In the case of a re-engagement order, the tribunal must ask the employee if he or she is willing to accept the job on the terms specified by the employer. Where the employee refuses the job offered, the tribunal will order continuation of the contract only if it is of the opinion that the employee's refusal is reasonable. An order for the continuation of contract is an order that the contract of employment remains in force "for the purposes of pay or of any other benefit derived from the employment, seniority, pension rights and other similar matters", and for the purpose of determining the employee's continuity of employment.

Note: The "higher" additional award will become the norm in all cases of failure to re-employ on the enactment of the ERB, which will also abolish the special awards that at present apply in certain circumstances.

References

¹ The Public Interest Disclosure Act 1998 (Commencement) Order 1999 (SI No.1547 (C.45)), available from the Stationery Office, price £1.

² June 1999, available free, from DTI Publications Orderline, tel: 0870 1502 500.

³ 5.6.98, Hansard (HL Committee of the whole House), col. 616.

⁴ ibid.

⁵ 5.6.98, Hansard (HL Committee), col. 635.

⁶ ibid.

⁷ [1997] IRLR 519.

⁸ 11.5.98, Hansard (HL Second Reading), col. 901.

⁹ See, for example, 19.6.98, Hansard (HL Report), col. 1801.

¹⁰ ibid.

¹¹ 19.6.98, Hansard (HL Report), col. 1803.

¹² SI No.1549, available from the Stationery Office, price £2.

¹³ [1967] 3 All ER 145.

¹⁴ [1984] 2 All ER 417.

¹⁵ 11.5.98, Hansard (HL Second Reading), col. 891.

¹⁶ 11.3.98, Parliamentary Debates (HC Official Report - Standing Committee D), col. 10.

¹⁷ [1979] IRLR 436.

¹⁸ 17.1.78 EAT 505/77.

¹⁹ 5.6.98, Hansard (HL Committee), col. 634.

²⁰ 12.7.95 COIT 11268/94.

²¹ [1977] IRLR 479.

²² [1984] IRLR 24.

²³ [1978] IRLR 413.

²⁴ 15.3.99 EAT 1323/98.

²⁵ See reg. 3(b) of the Public Interest Disclosure (Compensation) Regulations 1999 (SI No.1548 - "the Compensation Regulations"), available from the Stationery Office, price £1.50.

²⁶ See reg. 3(a) of the Compensation Regulations.

Definition of "worker"

The ERA as amended gives protection for present purposes to:

It specifically excludes:

²⁷ In excluding the police from the protection of the 1998 Act, the Government promised that police regulations would be reviewed and, if necessary, amended "to ensure the same level of protection" in relation to public interest disclosures as that to be enjoyed by other workers (11.3.98, Parliamentary Debates (HC Official Report - Standing Committee D), cols. 17-18). We understand that relevant changes were made with effect from 1 April 1999 in the Police (Conduct) Regulations 1999 (SI No.730 - see in particular para. 6 of the Code of Conduct for police officers appended to the Regulations) and new Home Office "Guidance on police unsatisfactory performance, complaints and misconduct procedures" (see in particular paras. 234-236). These amendments appear to operate solely in the realm of internal police conduct and discipline, and would not seem to offer any free-standing equivalent legal protection against victimisation for whistleblowers.

²⁸ As set out in The Public Interest Disclosure (Prescribed Persons) Order 1999. Contact addresses and telephone numbers for the persons prescribed can be found in appendix 1 to the DTI "Guide to the Public Interest Disclosure Act 1998"2 and are reproduced on the Eclipse web site.

²⁹ This provision will cover, for example, the Data Protection Commissioner, who will take over substantially the same functions currently carried out by the Data Protection Registrar, when the Data Protection Act 1998 comes into force.

Public concern at work

Established in October 1993, Public Concern at Work ("PCAW") is a leading independent charity whose main objectives are: "to promote compliance with the law and good practice in the public, private and voluntary sectors". In practical terms, PCAW focuses the responsibility of workers to raise concerns about malpractice and the responsibility of those in charge to investigate and remedy such issues".

Its strategy for achieving its aims includes the provision of free and confidential legal and practical advice to workers and others concerned about malpractice and public dangers in the workplace, but who are unsure whether to blow the whistle or stay silent³⁰.

³⁰ PCAW can be contacted by telephoning 020 7404 6609. Information about a relevant failure disclosed in the course of obtaining such advice will amount to a protected disclosure for the purposes discussed in this feature (see above ).