CIPD - Whistleblowing

Employee relations

Revised March 2008

This factsheet gives introductory guidance. It:

outlines the legislation concerning whistleblowing
gives guidance on procedure
includes the CIPD viewpoint.

What is ‘whistleblowing’?

Most people will have heard of 'whistleblowing' from the high-profile cases reported in the media. Put at its simplest, whistleblowing occurs when an employee or worker provides certain types of information, usually to the employer or a regulator, which has come to their attention through work. The whistleblower is usually not directly, personally affected by the danger or illegality. Whistleblowing occurs when a worker raises a concern about danger or illegality that affects others, for example members of the public.

The legal position

The key piece of whistleblowing legislation is the Public Interest Disclosure Act 1998 (PIDA) which applies to almost all workers and employees who ordinarily work in Great Britain. Other relevant Acts and Statutory Instruments include:

Police Reform Act 2002
Employment Rights Act 1996
Employment Rights Act 1996
Management of Health and Safety at Work Regulations 1999 (SI 1999/3242)
Public Interest Disclosure (Compensation) Order 1999 (SI 1999/1548)
Public Interest Disclosure (Prescribed Persons) Order 1999 (SI 1999/1549)
Public Interest Disclosure (Prescribed Persons) (Amendment) Order 2003 (SI 2003/1993)
Public Interest Disclosure (Prescribed Persons) (Amendment) Order 2004 (SI 2004/3265)
Public Interest Disclosure (Prescribed Persons) (Amendment) Order 2005 (SI 2005/2464).

Various whistleblowing guidance is available, for example from the Department for Business, Enterprise and Regulatory Reform (BERR) and the charity Public Concern at Work (see Useful contacts below).

CIPD members can find out more on the legal aspects, including the protection the law gives to whistleblowers, from our FAQ on Whistleblowing in the Employment Law at Work area of our website.

Go to our Whistleblowing FAQ

What are the benefits to employers in having a whistleblowing procedure?

Both employers and employees may have a lot at stake when whistleblowing occurs. Where malpractice is shown to have occurred, this may reflect badly on management systems, or on individual managers. Whistleblowers may fear that management will be tempted to 'shoot the messenger'. A clear procedure for raising issues will help to reduce the risk that serious concerns are mishandled, whether by the employee or by the organisation. But it is also important for workers to understand that there will be no adverse repercussions for raising cases with their employers.

The accounting scandals at Enron and Societe Generale have underlined the damage that fraud and business malpractice can cause. They also highlight the need for organisations to ensure that whistleblowing procedures are in place and supported by the management culture. Business ethics are increasingly seen as an issue that can build or destroy a company's reputation. If public trust is withheld, the business consequences can be extremely serious.

Many organisations have reported a positive benefit from their whistleblowing procedures¹. For example, the Treasury’s Annual Fraud Reports record a marked increase in the number of Whitehall frauds discovered and stopped by staff raising concerns following the introduction of whistle blowing policies since the PIDA came into force. The cost-benefit analysis section of the Financial Services Authority’s policy paper² concludes that respondents all agreed that the costs in implementing or reassessing whistleblowing procedures were minimal. The benefits were described by one respondent as hard to quantify, but significant for the business of any regulated firm. One respondent stated that it was ‘easy to see that effective in-house whistleblowing arrangements are a benefit to both firms and consumers’.

The existence of a procedure, together with evidence that the employer was concerned to deal effectively with any malpractice, will make it less likely that a tribunal will find that an employee was behaving reasonably by making disclosures to an outside body or person. The employer will usually be the best person to investigate and, if necessary, put matters right. An internal procedure will also help to forestall the serious damage to an employer's business or reputation that can occur as a result of public disclosures.

What should a whistleblowing procedure contain?

Employers should make clear to employees what to do if they come across malpractice in the workplace. This should encourage employees to inform someone with the ability to do something about the problem. Guidance will need to reflect the circumstances of individual employers, but should make clear that:

the kinds of actions targeted by the legislation are unacceptable and the employer attaches importance to identifying and remedying malpractice (specific examples of unacceptable behaviour might usefully be included).
employees should inform their line manager immediately if they become aware that any of the specified actions is happening (or has happened, or is likely to happen).
in more serious cases (eg if the allegation is about the actions of their line manager), the employee should feel able to raise the issue with a more senior manager, bypassing lower levels of management.
whistleblowers can ask for their concerns to be treated in confidence and such wishes will be respected.
employees will not be penalised for informing management about any of the specified actions.

It is preferable to deal with whistleblowing separately, rather than as an extension to or part of an existing grievance procedure, while cross referencing procedures on discipline and grievances. This is partly because the scale of risk to the organisation and to the employee will generally be significantly greater in whistleblowing cases than with other matters. In addition, the whistleblower may have no grievance in relation to their terms and conditions, or indeed in relation to the employer (it may, for example, relate to the conduct of a contractor).

Many companies have codes of behaviour or ethical standards with which employees are expected to comply. Such codes can help to reinforce whistleblowing policies and might be cross-referenced in written guidance on whistleblowing.

How should the procedure be implemented?

A procedure is useful only insofar as it is followed. One problem is the reluctance many employees feel to 'snitch' on colleagues. Despite often showing great courage and determination, whistleblowers are not necessarily popular with their colleagues, particularly where the disclosure threatens people’s jobs. HR managers have a duty to support whistleblowers that act in good faith and it is in the long-term interests of the organisation that they should do so.

Managers may need training to ensure that matters brought to their attention are resolved in line with the policy and in a way which will cause least damage to the organisation. Policies need to have the full support of directors and senior managers and be communicated to all employees.

Managers notified of a concern:

have a responsibility to ensure that concerns raised are taken seriously
where appropriate, should investigate properly and make an objective assessment of the concern
should keep the employee advised of progress
have a responsibility to ensure that the action necessary to resolve a concern is taken.

Employers may wish to specify alternative means for employees to register concerns within the organisation where they do not wish to approach their line manager. This could be eg a telephone 'hotline', and/or a designated manager or officer reporting to the most senior person in the organisation.

Confidentiality clauses which are often found in the contract of employment or staff handbook may need to be qualified to take into account workers' rights under the Act. Following the US Sarbanes-Oxley Act, which applies to EU-based affiliates of publicly held US companies, there has been an increase in anonymous reporting hotlines for employees, The European Commission has recommended that companies should not encourage anonymous reporting since whistleblowing schemes require the processing of personal data and are subject to data protection rules.

CIPD viewpoint

CIPD welcomes the legislation, which offers useful support for employers' efforts to ensure compliance with legal and ethical standards. Workers who have serious concerns that such standards are not being met deserve effective legal protection. Employers should have a simple policy that is supported from the top of the organisation and is clearly promoted to employees.

Organisations benefit commercially from adherence to good business practice. Public sector and voluntary organisations are often highly vulnerable to accusations of unprofessional or unethical behaviour. A statement of the behaviour expected of all employees will provide a helpful framework against which individuals will be encouraged to report behaviour that fails to match up to the standard.

A climate of open communication, supported by a clear procedure for dealing with concerns, can help to reduce misconduct and ensure that any such concerns are dealt with expeditiously.

Useful contacts

Employees who have serious concerns may feel the need to seek advice, for example from a recognised trade union or independent legal adviser.

Advice can also be obtained from:

Department for Business, Enterprise and Regulatory Reform

Public Concern at Work

References

BENTLEY, R. (2006) Blowing the whistle. Employers' Law. April. pp12-13.
FINANCIAL SERVICES AUTHORITY (2002) Whistleblowing, the FSA & the financial services industry. Policy paper. London: FSA. Available at: http://www.fsa.gov.uk/pages/Library/Policy/CP/2001/
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Whistleblowing