Whistleblowers at work 1: contract, confidentiality and the public interest

Whither the law?

Notwithstanding this growing recognition that whistleblowers can have a positive and constructive role to play within organisations, the paucity of legal protection available to employees who dare to raise concerns continues to sustain the "old" culture of fear, inertia and secrecy. The whistleblower may remain subject to harassment, other detrimental treatment and ultimately dismissal, and such legal protection as exists is - outside of the area of health and safety - piecemeal and, in many respects, ineffective.

In the first of two Guidance Notes on whistleblowing at work, we look at the way in which the contract of employment expressly or impliedly favours "fidelity" and "confidentiality" in employment, and the uncertain extent of any defence which may be open to employees alleging that the ultimate disclosure of information outside the undertaking was in the "public interest". We also consider the impact on the employees' contractual position of professional or employer codes of practice or guidance on disclosure.

The second part of the feature will examine the statutory influences on whistleblowers, including the law relating to unfair dismissal, the special health and safety measures, and provisions on victimisation on grounds of sex and race. It will also consider the Public Interest Disclosure Bill, which enjoyed strong all-party backbench support in the House of Commons. This Bill, which fell when it ran out of time in the 1995-96 parliamentary session, sought to introduce general protection for whistleblowers whose disclosure of information can be "justified in the public interest".

Contractual duties

It is recognised in law that there is a public and commercial interest in the protection of confidential information. An employer may wish to protect information which it believes to be confidential for a variety of reasons. These may include: the protection of trade secrets; the protection of the employer's commercial position in a competitive marketplace; protection of the employer's reputation; and the need to ensure that the employer fulfils duties of confidentiality which it may in turn owe to third parties (for example, clients or medical patients).

The agenda of employees or ex-employees, on the other hand, may on occasion run directly counter to the concerns of the employer. Thus, an employee may wish to take advantage of his or her access to information in order to compete with the employer, or to lay the groundwork for future competition. For present purposes, the "whistleblowing" employee may feel compelled to contact competent authorities, or ultimately the media, in order to disclose what he or she perceives to be wrongdoing, negligence or poor practice within their undertaking.

Confidential information may be protected either by express terms incorporated into the employment contract by employers, and/or by the general duties of fidelity and confidentiality which are implied into all such contracts by the courts.

Express "gagging" clauses

Express contractual terms prohibiting the disclosure of a wide range of "confidential" information are becoming increasingly common across a number of sectors of employment.

Such terms are not limited to senior employees, or to those with possible access to trade secrets or other commercially sensitive information. What have been colloquially called "gagging" clauses have been adopted, for example, by a number of NHS hospital trusts. A clause contained in contracts offered to nursing staff at one trust stated: "During the course of your employment you may see, hear or have access to information on matters of a confidential nature relating to the work of the hospital or to the health and personal affairs of patients and staff. Under no circumstances should such information be divulged or passed onto any unauthorised person(s) or organisations. Disciplinary action will be taken against any employee who contravenes this regulation." ⁷ In a similar vein, paragraph 72 of the "purple book", which governs terms and conditions of employment in local government, has for some time provided that "no officer shall communicate to the public the proceedings of any committee meeting, etc, nor the content of any document relating to the authority unless required by law or expressly authorised to do so."

Implied duties of confidentiality

During the High Court judgment in Attorney General v Guardian Newspapers Ltd (No.1) (Spycatcher (No.1)), Sir Nicolas Browne-Wilkinson observed that the "principles on which the law of confidential information is based have never been clarified and remain, to my mind, obscure". This lack of clarity has to some extent been reflected in employment cases, where the only certainty has been that employees are under an obligation to their employers not to disclose confidential information obtained by them in the course, and as a result of, their employment (Bents Brewery Co Ltd v Hogan). That obligation has, at various times, been said to arise out of the employee's position or status as such, or as a result of equitable duties of trust and confidence owed by the employee to the employer.

More recently, however, the courts have made it clear that, in the absence of any express term, an employee's obligations in respect of confidential information are the subject of implied terms in the contract of employment (Faccenda Chicken Ltd v Fowler and others). In these circumstances, an employee's obligations of confidentiality during employment are largely subsumed within the generally implied duty of good faith or fidelity. After employment has terminated, the ex-employee is bound by a continuing, but more restricted, implied duty of confidentiality . (Both of these duties are summarised in the adjacent box. Our focus in this article, however, remains on employees' rights and obligations during employment.)

Confidential information

What will amount to confidential information will vary from case to case, depending on the facts and circumstances. The following considerations are relevant to determining this question.

This must be distinguished from cases where the disclosure is made either by the employee (or other party) who is directly subject to the (express or implied) duty of confidentiality, or by or with the consent of a third party. It appears that this form of disclosure does not necessarily release the individual who owes the duty of confidence from his or her obligations. The courts may in these circumstances be prepared to intervene to prevent them, or others, from abusing their position (see, for example, Speed Seal Products Ltd v Paddington).

In the view of Lord Justice Donaldson, the report had started life as a "highly confidential document", but a stage was reached at which quite a large number of people, even if they originally received the report in circumstances in which they realised it was confidential, "would think that the seal of confidentiality had gone and that there was no reason why they should not show it to people outside the company". He nevertheless went on to comment that the decision would have been wholly different if the company had taken the simple precaution of stamping "confidential" on the document and making it clear that widespread distribution of information to the workforce did not mean that the report itself ceased to be confidential: "There is nothing to prevent the fullest communication between management and workforce under a seal of confidentiality."

Further, the simplicity of an idea does not prevent it being confidential. Novelty depends upon the thing itself, and not the quality of its constituent parts. Indeed, often the more striking the novelty, the more commonplace the components, although some degree of "originality" is necessary (Coco v A N Clark (Engineers) Ltd). There may, however, be information which, because of its "trivial" or "useless" character, can never be regarded as confidential (see the High Court decision in Faccenda and Lord Goff's view in Spycatcher (No.2)).

The Court outlined four elements which might be of some assistance in identifying confidential information:

-the information must be information the release of which the owner believes would be injurious to it, or of advantage to its rivals or others;

-the owner must believe that the information is confidential or secret - that is, that it is not already in the public domain;

-the owner's belief in the confidentiality of information must be reasonable; and

-the information must be judged in the light of the usage and practices of the particular industry or trade concerned.

Applying this guidance to the facts of the case, the Court thought that the following information was at least capable of being confidential: names and telex addresses of the company's manufacturers and suppliers; the negotiated prices paid by the company; the names of overseas buying agents through whom the company dealt; the company's new ranges, actual or proposed; information as to the requirements (such as styles) of the company's customers; details of current negotiations; negotiated prices paid by customers to the company; the company's samples; and the company's current fast-moving lines.

In the earlier decision in Bents Brewery Co Ltd v Hogan, the High Court found that the terms and conditions of employment of particular employees (pub managers) could not be treated as confidential information. Employees were consequently entitled to disclose such information to their trade union or to any person to whom they thought it was to their advantage so to do. However, information about the total wages bills and weekly sales of particular undertakings was confidential information the disclosure of which would constitute a breach of contract. This was information which the employees could only acquire as a result of, and in the course of, their employment, and was information of a confidential nature which the employers would not wish to be disclosed.

CONFLICTING PRESSURES

Both express and implied duties of fidelity and confidentiality must be considered in the light of other terms of the contract which may to some extent appear to conflict with the requirement to maintain confidences. These may on occasion derive from, or be supplemented by, professional or employer codes of conduct or practice dealing with internal procedures for raising concerns and outlining the circumstances in which external disclosure may be justified.

The potential legal status and impact of such employer codes or guidance is discussed, using the examples of the NHS, local government and the civil service, in the box on p.7. Immediately below we address the extent to which the implied duty of fidelity may itself require certain information known to the employee to be disclosed to the employer.

Disclosure to the employer

As part of their implied duty of fidelity, employees are under an obligation to disclose to their employers relevant and valuable information received by them in the course, or as a result, of their employment. The information does not have to be "confidential" (see, for example, Sanders v Parry - where the employee failed to disclose dissatisfaction with his employer, which had been expressed by a colleague and one of the employer's major customers), although it often will be. So, in Cranleigh Precision Engineering Ltd v Bryant, a senior technical and managerial employee acted in "grave dereliction" of his duty by concealing confidential information which he received from his employer's patent agents about the foreign invention of a product similar to that produced by the employer.

An employee is not, however, bound in all circumstances to inform his or her employer of any matter relating to the employer's affairs, and which may be of interest to the employer, regardless of the manner in which the employee obtained the information. In Macmillan Inc v Bishopsgate Investment Trust plc, for example, the High Court held that an employer had no contractual right to require one of its employees to disclose the transcripts of interviews which he had given to a company liquidator under the Insolvency Act 1986.

Disclosing wrongdoing?

As the last case indicates, the normal contract of employment is not a contract of "utmost good faith", and employees are consequently under no general duty to disclose their own wrongdoing or misconduct to their employer (Bell v Lever Brothers Ltd). (Note that company directors, on the other hand, are normally in a fiduciary position and, as a corollary to their equitable duty to account, will in certain circumstances be subject to just such a duty of disclosure (Horcal Ltd v Gatland).)

There is also no general duty to report a fellow employee's misconduct or breach of contract. Indeed, the courts have accepted that "the law would do industrial relations generally no great service if it held that such a duty did in fact exist in all cases" (Sybron Corporation v Rochem Ltd). Whether such a duty exists therefore depends upon the circumstances of each case and the relationship of employees to their employer and to one another. Where the duty does exist, it is not diminished by the fact that in making the disclosure the employee would "inevitably" incriminate himself or herself, and is not dependent upon the employee being questioned by the employer. It is consequently much more likely to be found to exist in the case of senior employees, and will be conditioned by their express managerial and administrative responsibilities (see Sybron and Swain v West (Butchers) Ltd). And the EAT has recently suggested that employees in the position of, for example, a local authority accountant are under a "high duty ... to report dishonesty in any form, and to persist if need be in ensuring that it is brought to the attention of those in authority and that appropriate action is taken" (Cornelius v London Borough of Hackney - to be discussed further in Whistleblowers at work 2: the statutory context ).

By way of contrast, in Distillers Company (Bottling Services) Ltd v Gardner, a manual employee was dismissed for not reporting the theft of whisky by colleagues. Upholding an industrial tribunal's conclusion that the dismissal was unfair, the EAT observed that if the employer had an overwhelming need to prevent misappropriation and misuse of alcohol by employees, "it would be reasonable to expect in their rules not merely a specific prohibition against misappropriation but a clear obligation placed upon employees who witness such behaviour to report it immediately. It is asking a lot of an employee to require him to report the misdemeanours of his colleagues, but if this is to be the rule it should be very clearly spelled out."

SANCTIONS AND REMEDIES

Employers have a variety of legal weapons at their disposal against whistleblowing employees (or ex-employees) who disclose or threaten to disclose confidential information in alleged breach of contract.

Disclosure or misuse of confidential information by an existing employee will normally constitute a breach of express or implied terms of the contract of employment, and may attract disciplinary proceedings. If the breach is sufficiently serious (that is, repudiatory) it will justify the employee's summary dismissal at common law. (On the potential for wrongful dismissal claims by employees, see below.)

These "solutions" do not, however, apply to ex-employees, and the employer's main concern is normally either to prevent disclosure taking place, minimise the consequences of disclosure, and/or to obtain recompense for loss or damage suffered as a result of disclosure. In brief, the main remedies available to employers include:

It should be noted, however, that injunctions are an equitable and discretionary remedy, and if a plaintiff comes to court with "unclean hands" no relief will be available. For example, in Hubbard v Vosper, at least one member of the Court of Appeal found evidence that the Church of Scientology had protected its secrets by "deplorable means", and that it could not therefore ask the Court for protection by way of injunction.

PUBLIC INTEREST DISCLOSURES

At common law, the employee who is dismissed or threatened with other legal action for allegedly disclosing confidential information may argue, amongst other things, that the information was not confidential, or had lost its quality of confidence as a result of publication. Alternatively, he or she may be able to claim that disclosure was, or would be, in the "public interest". If the employee is summarily dismissed, and can sustain any of these arguments, he or she will be able to bring an action for wrongful dismissal against the former employer. But even if the employee can establish a wrongful dismissal, it is highly unlikely that a court will order specific performance of the contract, or grant injunctive relief (to the employee) requiring the resumption of the employment relationship. He or she would normally be, at best, left with a remedy in damages limited to his or her proper notice period.

In relation to the public interest defence, any term in a contract of employment which expressly or impliedly has the effect of restricting public interest disclosures is likely to be unenforceable. According to Lord Justice Winn in Initial Services Ltd v Putterill, "the question whether or not a term properly to be implied in a contract is enforceable in law must be decided by asking whether it would have been enforceable had it been an express term." In Lord Justice Salmon's view in the same case, any term which prohibits an employee from disclosing a proposed or actual breach of statutory duty by an employer will probably be regarded by the courts as illegal on the ground that it is clearly contrary to the public interest.

It follows that if an employer attempts to prevent or deter an employee from making a public interest disclosure by, for example, threatening him or her with legal proceedings, the employee might be justified in saying, "I will leave and let the public know about it, so as to protect them." This view, expressed by Lord Denning in Initial Services, indicates that an employee who is threatened or otherwise penalised as the result of a proposed or actual public interest disclosure, may have the right to resign and complain of constructive dismissal (to be discussed further in Whistleblowers at work 2: the statutory context ).

"The obligation of confidentiality may in some circumstances be overborne. If the subject matter is something which is inimical to the public interest or threatens individual safety, a person in possession of knowledge of that subject matter cannot be obliged to conceal it although he acquired that knowledge in confidence."

(per Lord Justice Shaw in Schering Chemicals Ltd v Falkman Ltd and others)

"There is confidential information which the public may have a right to receive and others, in particular the media, may have a right and even a duty to publish, even if the information had been obtained in flagrant breach of confidence and irrespective of the motive of the informer."

(per Lord Justice Stephenson in Lion Laboratories Ltd v Evans and others)

Defining the public interest

The problem in this area lies in defining the public interest. Although the basis of the law's protection of confidential information is that there is a public interest that confidences should be preserved, that public interest may be outweighed by some other countervailing public interest which favours disclosure. This caveat applies to all types of confidential information, and will require a court to carry out a balancing operation between the competing interests (Spycatcher (No.2)).

Originally, it appeared that the public interest in disclosure of information was limited to the disclosure of "iniquity" or illegal acts (Gartside v Outram). The "iniquity" in Gartside involved a fraud perpetrated by a business on a number of its customers, and disclosed to those customers by one of its employees. In Initial Services, however, Lord Denning made it clear that the defence of disclosure in the public interest was not confined to cases where an employer has been guilty of a crime or fraud: "It extends to any misconduct of such a nature that it ought in the public interest to be disclosed to others." Similarly, the defence was not limited only to the proposed commission of a crime or civil wrong: "The exception should extend to crimes, frauds and misdeeds, both those actually committed as well as those in contemplation, provided always ... that the disclosure is justified in the public interest."

On the facts of Initial Services, Lord Denning said that it was arguable that information which a company should have placed on a public register under the Restrictive Trade Practices Act 1956 "was not within the realm of confidence" to which an employer could hold an employee. In addition, it was at least arguable that it was in the public interest that allegedly misleading advertising material as to the reason for price rises should have been disclosed to the public via the media.

It is consequently clear that there may be a public interest in the disclosure of matters, carried out or contemplated, in breach of the national security or of the law (including statutory duty and fraud), or otherwise destructive of the nation or its people (including matters medically dangerous to the public), and other misdeeds of similar gravity (Beloff v Pressdram Ltd). And in Schering Chemicals Ltd v Falkman and Elstein, Lord Justice Shaw accepted that the obligation of confidentiality could be overborne "if the subject matter is something which is inimical to the public interest or threatens individual safety". But he concluded that no such consideration existed in the case in question because the drug at the centre of the action had been withdrawn from the market. Neither the public nor any individual stood in need of protection from its use at that point in time.

Just cause or excuse

In Fraser v Evans, Lord Denning commented that the term "iniquity" (as used in Gartside v Outram) did not express a principle. It was, he said, "merely an instance of just cause or excuse for breaking confidence. There are some things which may be required to be disclosed in the public interest, in which event no confidence can be prayed in aid to keep them secret."

This broader concept of "just cause or excuse" has been cited with approval in a number of subsequent cases. Perhaps the most instructive of these is Lion Laboratories Ltd v Evans. Lion Laboratories Ltd sought, and initially obtained, an interlocutory injunction preventing two ex-employees and a national newspaper from disclosing or making use of admittedly confidential information which raised doubts about the reliability of an instrument called the "Lion Intoximeter". This instrument was one of two devices approved by the Home Office for breath-testing car drivers under road traffic legislation.

Allowing an appeal against the injunction, the Court of Appeal noted the public interest in preserving the right of organisations, as of individuals, to protect confidential information. On the other hand, said Lord Justice Stephenson, there was confidential information which the public may have a right to receive, and which others, in particular the media, may have a right and even a duty to publish, "even if the information has been unlawfully obtained in flagrant breach of confidence and irrespective of the motive of the informer". But, the Court warned, "there is a wide difference between what is interesting to the public and what it is in the public interest to make known ... the public are interested in many private matters which are no real concern of theirs and which the public have no pressing need to know."

The Court nevertheless concluded that those who sought to rely on the public interest defence did not necessarily have to point to serious misdeeds or misconduct on the part of the plaintiffs. Although the defence would normally arise in cases where such wrongdoing was alleged, it was "not an essential ingredient of this defence that the plaintiffs should have been guilty of iniquitous conduct". In the present case, said the Court, the issue raised by the defendants was "a serious question concerning a matter which affects the life, and even the liberty, of an unascertainable number of Her Majesty's subjects." Despite the fact that there was no evidence that any member of the public had been wrongly convicted of a drink-driving offence on the basis of intoximeter evidence, the accuracy of the device was a matter of "grave public concern".

Disclosure to appropriate recipient

The Court in Lion Laboratories stressed, however, that in many cases the public interest might best be served by an informer giving confidential information not to the press, but to the police or to some other responsible body. This reflects Lord Denning's statement in Initial Services v Putterill, that disclosure must be made "to one who has a proper interest in receiving it". This will normally mean disclosure to relevant authorities, although there may be cases where the misdeed is of such a character that the public interest may demand, or at least excuse, broader publication. The requirement of more limited disclosure was endorsed by the House of Lords in Spycatcher (No.2), where Lord Goff noted that an allegation of wrongdoing in the security services was a "classic case" in which limited disclosure would be required, since there were "a number of proper avenues of complaint". More recently, the High Court suggested that disclosure must be made "to a limited and specific extent ... only to persons who had a reasonable need to make use of it" (Hellewell v Chief Constable of Derbyshire).

The importance of disclosure to an appropriate authority was underlined in Re a company's application. There the company was subject to the regulatory scheme imposed by the Financial Investment Management and Brokers' Regulatory Authority (FIMBRA), pursuant to the provisions of the Financial Services Act 1986. In the course of a telephone conversation with one of the company's chief executives, an employee indicated his intention to communicate information to FIMBRA about alleged breaches of FIMBRA regulations by the company, and to the Inland Revenue in relation to alleged breaches of the Taxes Acts. The company alleged that this was an attempt at blackmail.

The High Court, however, concluded that "it would be contrary to the public interest for employees of financial services companies who thought that they ought to place before FIMBRA information of possible breaches of the regulatory system, or information about possible fiscal irregularities before the Inland Revenue, to be inhibited from so doing by the consequence that they might become involved in legal proceedings in which the court would conduct an investigation with them as the defendants into the substance of the information they were minded to communicate."

The employee's undoubted duty of confidence did not extend so as to bar disclosures to FIMBRA and the Inland Revenue of matters that it was within the province of those authorities to investigate. The Court accordingly varied an interlocutory injunction so as to exclude communications with the relevant authorities, and accepted undertakings that the defendant would not reveal to anyone other than his legal advisers the fact that he had communicated with those authorities.

And, in W v Edgell, the Court of Appeal concluded that: "Where a man has committed multiple killings under the disability of serious mental illness, decisions which may lead directly or indirectly to his release from hospital should not be made unless a responsible authority is properly able to make an informed judgment that the risk of repetition is so small as to be acceptable. A consultant psychiatrist who becomes aware, even in the course of a confidential relationship, of information which leads him, in the exercise of what the court considers a sound professional judgment, to fear that such decisions may be made on the basis of inadequate information and with a real risk of consequent danger to the public is entitled to take such steps as are reasonable in all the circumstances to communicate the grounds of his concern to the responsible authorities."

In contrast, in X v Y, Mr Justice Rose concluded that the public interest in freedom of the press and discussion of issues surrounding HIV and AIDS was "substantially outweighed when measured against the public interests in relation to loyalty and confidentiality both generally and with particular reference to AIDS patients' hospital records". The records of hospital patients, particularly those suffering from such a condition, should, said the judge, be as confidential as the courts could properly keep them in order that the plaintiff health authority could "be free from suspicion" that it was "harbouring disloyal employees".

Motives of whistleblower

In Initial Services v Putterill, Lord Denning reserved judgment as to what the position would be if an employee disclosed information out of spite or malice or sold it to a newspaper for money or reward. But we have already seen that, in the Lion Laboratories case, Lord Justice Stephenson felt that the public interest might require the disclosure of information "irrespective of the motives of the informer". And in Re a company's application, Mr Justice Scott doubted whether the employee's duty of confidence extended to an obligation not to disclose information to the relevant authorities, even if that disclosure was motivated by malice or based upon fiction or invention. He went on to say that if the employee's allegations proved groundless, and he or she was motivated by malice, the employee would be "at serious risk of being found liable in damages for defamation or malicious falsehood".

Indeed, Lord Denning himself did not later appear to be influenced by the doubts which he had previously expressed. For example, in Woodward v Hutchins, he held that it was in the public interest that there should be truth in advertising and publicity: "The public should not be misled". The Court of Appeal consequently discharged an injunction against an ex-employee who had disclosed controversial information about the singer Tom Jones to the Daily Mirror. This was notwithstanding the fact that Lord Denning had "no doubt" that the informer had parted with the information "for a very considerable reward".

Mere allegation insufficient

The malicious whistleblower or publisher does not, however, have carte blanche. A mere allegation of iniquity or wrongdoing is not in itself sufficient to justify disclosures in the public interest. Even in interlocutory proceedings, it has been stated that a party wishing to publish confidential information "must do more than raise a plea of public interest: they must show legitimate ground for supposing it is in the public interest for it to be disclosed" (Lion Laboratories Ltd v Evans). In Spycatcher (No.2), Lord Keith expressed the general view that there should be "at least a prima facie case that the allegations have substance".

The standard of proof required may, however, differ, depending on the nature and extent of the proposed disclosure. So, in Re a company's application, Scott J pointed out that Lord Keith's statement was made "in the context of a disclosure threatened to the world at large, a disclosure which would have taken place in the national press. Where the disclosure threatened is no more than a disclosure to a recipient which has a duty to investigate matters within its remit, it is not ... for the court to investigate the substance of the proposed disclosure unless there is ground for supposing that the disclosure goes outside the remit of the intended recipient of the information."

Compliance with European Convention

Finally, it should be noted that the House of Lords has stated that there is no inconsistency between the right to freedom of expression - including the freedom to hold opinions and to receive and impart information and ideas without interference by public authority - contained in Article 10(1) of the European Convention on Human Rights, and the English common law principles set out in this feature (Spycatcher (No.2)).

Whistleblowers at work 1: main points to note

Protection of confidential information: general principles

In the Faccenda decision, the Court of Appeal set out the following general principles of law relating to the protection of confidential information in the employment context:

(a)The nature of the employment. Employment in a capacity where "confidential" material is habitually handled may impose a high obligation of confidentiality because the employee can be expected to realise its sensitive nature to a greater extent than if he or she were employed in a capacity where such material reaches the employee only occasionally or incidentally.

(b)The nature of the information itself. Information will only be protected if it can properly be classed as a trade secret or is material which, while not properly described as a trade secret, is in all the circumstances of such a highly confidential nature as to require the same protection as a trade secret.

(c)Whether the employer has impressed on the employee the confidentiality of the information. Thus, although the employer cannot prevent the use or disclosure of information merely by telling the employee that certain information is confidential, the employer's attitude towards the information "provides evidence which may assist in determining whether or not the information can properly be regarded as a trade secret".

(d)Whether the relevant information can easily be isolated from other information which the employee is free to disclose. Although the Court would not have regarded the "separability" of the information as conclusive, the fact that the alleged "confidential" information is part of a package and that the remainder of the package is not confidential "is likely to throw light on whether the information in question was really a trade secret".

Codes and Procedures: Some examples

The Civil Service

In direct response to recommendations made in the first report of the Nolan Committee, a new civil service code was introduced at the start of 1996. It contains the following provisions on confidentiality and disclosure, which we understand are incorporated into civil servants' employment contracts:

"10. Civil servants should not without authority disclose official information which has been communicated in confidence within Government, or received in confidence from others. Nothing in the Code should be taken as overriding existing statutory or common law obligations to keep confidential, or to disclose, certain information. They should not seek to frustrate or influence the policies, decisions or actions of Government by the unauthorised, improper or premature disclosure outside the Government of any information to which they have had access as civil servants."

11. Where a civil servant believes that he or she is being required to act in a way which:

He or she should report the matter in accordance with procedures laid down in departmental guidance or rules of conduct. A civil servant should also report to the appropriate authorities evidence of criminal or unlawful activity by others and may also report in accordance with departmental procedures if he or she becomes aware of other breaches of the code or is required to act in a way which, for him or her, raises a fundamental issue of conscience.

12. Where a civil servant has reported a matter covered in para. 11 in accordance with procedures ... and believes that the response does not represent a reasonable response to the grounds for his or her concern, he or she may report the matter in writing to the Civil Service Commissioners."

In order to give effect to these provisions, civil service departments and agencies have been required to establish clearly defined procedures for handling complaints, which should provide for "a nominated official" - outside the management line - "who can be approached in confidence in the first instance". These internal resolution procedures will normally involve the permanent head of department or agency chief executive, and departments and agencies should ensure that "staff feel confident to voice complaints, and are not penalised for raising concerns in accordance with procedures".⁸

The National Health Service

Many NHS staff are subject to professional codes and obligations, which may conflict with any strict contractual duty of confidentiality (such as that reproduced on p.4) owed to their immediate employer. The Code of professional conduct produced by the United Kingdom Central Council for Nursing, Midwifery and Health Visiting ("the UKCC") ⁹, for example, provides that relevant practitioners must protect all confidential information concerning patients and clients obtained in the course of professional practice and make disclosures only with consent, where required by the order of a court or where disclosure can be justified in the wider public interest (para. 10). They must also report to an appropriate person or authority:

The status of these provisions is unclear. When NHS staff were employed primarily by area and/or regional health authorities, it was thought that standard form health authority contracts might incorporate UKCC standards¹⁰. But this can no longer safely be assumed in respect of contracts with the hospital trusts which are now the dominant employers.

In addition, the NHS Management Executive has produced Guidance for NHS staff on relations with the public and the media¹¹. The stated purpose of the guidance is, amongst other things, to make plain that NHS staff "have a right and duty to raise with their employer any matters of concern they may have about health service issues concerned with the delivery of care or services to a patient or client in their authority, trust or unit" (para. 3(i)). NHS employers should, says the guidance, "ensure that local policies and procedures are introduced to allow these rights and duties to be fully and properly met" (para. 3(3)). Paragraph 6 provides that "under no circumstances" are employees who express their views about health service issues in accordance with the guidance "to be penalised in any way for doing so".

This guidance is not mandatory, and thus does not of itself automatically modify existing terms and conditions of employment. It also contains a strong reassertion of the importance of confidentiality, which may well conflict with parts of the UKCC code. For example, the NHS guidance states that "unauthorised disclosure of personal information about any patient or client will be regarded as a most serious matter which will always warrant disciplinary action" (para. 8). In relation to other confidential information, the guidance notes the possibility of public interest disclosures, and recognises that an employee who has exhausted internal procedures might, "as a last resort", consider disclosing his or her concern to the media. But, it warns, "such action, if entered into unjustifiably, could result in disciplinary action and might unreasonably undermine public confidence in the service" (para. 27).

Local government

The Local Government Management Board, which advises local authority employers, has produced a voluntary Code of conduct for local government employees¹². This includes the principle that "employees will be expected, through agreed procedures and without fear of recrimination, to bring to the attention of the appropriate level of management any deficiency in the provision of service. Employees must report to the appropriate manager any impropriety or breach of procedure" (para. 1(1)).

Recent research, however, indicates that only just over 20% of local authorities at present have any form of whistleblowing procedure, although 49% expect to have some such procedure in place within the next 12 months¹³.

Public Concern at Work

Established in October 1993, PCAW is an independent charity. Its main objectives are: "to promote good practice and compliance with the law in the public, private and voluntary sectors". To achieve those aims it focuses on "the accountability of those in charge and the responsibility of those at work", and its strategy includes:

CASE LIST

Attorney General v Guardian Newspapers Ltd (No.1) [1987] 3 All ER 316; (No.2) [1988] 3 All ER 545

Bell v Lever Brothers Ltd [1932] AC 161

Beloff v Pressdram Ltd [1973] 1 All ER 241

Bents Brewery Co Ltd v Hogan [1945] All ER 570

British Syphon Co Ltd v Homewood [1956] 2 All ER 897

Coco v A N Clark (Engineers) Ltd [1968] Fleet Street Reports 415

Cornelius v London Borough of Hackney 18.1.96 EAT 1061/94

Cranleigh Precision Engineering Ltd v Bryant [1964] 3 All ER 289

Distillers Company (Bottling Services) Ltd v Gardner [1982] IRLR 47

Dowson & Mason Ltd v Potter and others [1986] 2 All ER 418

Faccenda Chicken Ltd v Fowler and others (High Court) [1985] 1 All ER 724; (Court of Appeal) [1986] IRLR 69

Fraser v Evans [1969] 1 All ER 8

Gartside v Outram [1856] 26 LJ Ch 113

Hellewell v Chief Constable of Derbyshire [1995] 4 All ER 473

Horcal Ltd v Gatland [1983] IRLR 459

Hubbard v Vosper [1972] 1 All ER 1023

Initial Services Ltd v Putterill [1967] 3 All ER 145

Lion Laboratories Ltd v Evans [1984] 2 All ER 417

Macmillan Inc v Bishopsgate Investment Trust plc [1993] IRLR 393

O Mustad & Son v Allcock & Co Ltd and Dosen [1963] 3 All ER 416

Re a company's application [1989] IRLR 477

Saltman Engineering Co Ltd v Campbell Engineering Co Ltd [1963] 3 All ER 413

Sanders v Parry [1967] 2 All ER 803

Sanderson v Mirror Group Newpapers Ltd 22.5.86 EAT 138/86

Schering Chemicals Ltd v Falkman and Elstein [1981] 2 All ER 321

Speed Seal Products Ltd v Paddington [1986] 1 All ER 91

Sun Printers Ltd v Westminster Press Ltd [1982] IRLR 292

Swain v West (Butchers) Ltd [1936] 1 AER 224 & (CA) 3 All ER 261

Sybron Corporation v Rochem Ltd [1983] IRLR 253

Thomas Marshall (Exports) Ltd v Guinle [1978] IRLR 174

Triplex Safety Glass Co v Scorah [1938] 1 Ch 211

W v Edgell [1990] 1 All ER 835

Woodward v Hutchins [1977] 2 All ER 751

X v Y [1988] 2 All ER 648

¹ Court inquiry, Department of Transport, Ct no.8074, 1987, HMSO.

² Investigation into the Clapham Junction railway accident, November 1989, HMSO Cm 820.

³ Public inquiry into the Piper Alpha disaster, November 1990, HMSO Cm 1310. This led directly to specific legislation to protect employees undertaking health and safety functions or raising grievances. This is now contained in ss.44 and 100 of the Employment Rights Act 1996 (see Whistleblowers at work 2: the statutory context ).

⁴ Inquiry into the supervision of the Bank of Credit and Commerce International, 22 October 1992, HMSO, Cm 198. This inquiry has resulted in a number of Regulations imposing additional duties of disclosure on auditors in the banking, insurance, building society and financial services sectors (on these instruments, see pp.91-97 of the "Legal implications of disclosure in the public interest" (second edition) by Yvonne Cripps, 1994, Sweet and Maxwell).

⁵ First report of the committee on standards in public life, May 1995, HMSO Cm 2850-1.

⁶ Second report of the committee on standards in public life: local public spending bodies, May 1996, HMSO Cm 3270-1.

⁷ Example taken from "Whistleblow: nurses speak out", produced by the Royal College of Nursing, 1993.

⁸ See generally "The Government's response to the first report of the committee on standards in public life", July 1995, HMSO Cm 2931, and Cabinet Office press release No. OPS 271/95, 30.10.95.

⁹ 3rd edition, July 1992.

¹⁰ See "Pink's precedent" in Nursing Times, vol. 89, no.28, 14.7.93.

¹¹ June 1993.

¹² 1994.

¹³ "Raising concerns about financial malpractice and probity: a survey of whistleblowing procedures in local authorities", a report prepared for PCAW by David Lewis, November 1996.

¹⁴ Concerned employees (and others) can contact PCAW by telephoning 0171 404 6609.