What will whistleblower reform mean for businesses?

A new law protects whistleblowers.

Government reforms to UK laws protecting whistleblowers came into effect last week, shielding employees for disclosures they believe to be in the public interest and closing a legislative loophole which had allowed disputes over employment contracts to be protected

Legislation has been in place since 1999 to afford protection to employees and some workers who blow the whistle on improper or illegal activities in the workplace. Protection is afforded to those who disclose information that they reasonably believe shows wrongdoing (eg the commission of a criminal offence or breach of a legal obligation), when that disclosure is made to a permitted category of person, such as the worker’s employer. Importantly, and although this was not specified in the legislation, the protection implied that the disclosure should be made in the public interest.

However, both the legal profession and employers were surprised when the courts decided to afford whistle-blower protection to employees who complained about breaches of their own employment contracts. The UK government sought to address this apparent loophole by passing legislation to refine the scope of whistle-blower protection.

The law was amended by the Enterprise and Regulatory Reform Act 2013, with relevant aspects applying to disclosures made on or after the 25th.

Disclosures are now only protected in cases where a worker or employee discloses information which they reasonably believe to be in the public interest. The important distinction is that the disclosure does not need to be in the public interest, but that the whistle-blower must have a reasonable belief that it is. The whistleblower will also no longer be required to make the disclosure in good faith, although they may find it very difficult to satisfy the new "public interest" test if they are making a disclosure in bad faith. However, if a disclosure which satisfies the "public interest" test is made in bad faith, for example, if an employee is motivated by malice rather than a desire to right a wrong, then the Employment Tribunal can reduce any compensation awarded to a whistle-blower by up to 25 per cent.

The legislation does not define the "public interest", and it will fall to the courts to debate and define what constitutes the “public interest” in this context. Employees may consider (and hold a reasonable belief) that disclosing information concerning breaches of their own employment contract is in the “public interest”, intending to ensure that similar breaches do not happen to other employees. If the courts interpret the definition broadly, it may undermine the purpose of the changes.

Conversely, to take a very narrow approach to the definition could reduce the effectiveness of any whistleblower protection.

It is also automatically unfair for an employee to be dismissed where the reason or principal reason for the dismissal is that he or she has made a protected disclosure, even in cases where there are other issues, such as with the employee’s conduct or performance, and they are protected from being subjected to any detriment because they have made a protected disclosure. Furthermore, protection against unfair dismissal applies to whistle-blowers regardless of whether or not they have completed the two years’ service which is normally necessary to bring an unfair dismissal claim against an employer.

The protection given to whistle-blowers also removes the normal, statutory cap on compensation for unfair dismissal that can be awarded if their claim is successful. In addition, the government has made it clear that protection extends to retaliation or detrimental treatment of whistle-blowers at the hands of their colleagues, as well as their employer.

In an environment where businesses are facing increasing regulation, such as in financial services and since the introduction of the Bribery Act 2010, whistleblowing may become more prevalent and should be encouraged as an important means of monitoring compliance. The recent changes help to restore the focus of the legislation on issues which have implications for the public as a whole, while providing protection for whistle-blowers. It will be interesting to watch how the courts develop this area of law.

This piece first appeared on economia.

James Cox is a partner at Gibson, Dunn & Crutcher.

A new law protects whistleblowers. Photograph: Getty Images

This is a news story from economia.

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Inside a shaken city: "I just want to be anywhere that’s not Manchester”

The morning after the bombing of the Manchester Arena has left the city's residents jumpy.

On Tuesday morning, the streets in Manchester city centre were eerily silent.

The commuter hub of Victoria Station - which backs onto the arena - was closed as police combed the area for clues, and despite Mayor Andy Burnham’s line of "business as usual", it looked like people were staying away.

Manchester Arena is the second largest indoor concert venue in Europe. With a capacity crowd of 18,000, on Monday night the venue was packed with young people from around the country - at least 22 of whom will never come home. At around 10.33pm, a suicide bomber detonated his device near the exit. Among the dead was an eight-year-old girl. Many more victims remain in hospital. 

Those Mancunians who were not alerted by the sirens woke to the news of their city's worst terrorist attack. Still, as the day went on, the city’s hubbub soon returned and, by lunchtime, there were shoppers and workers milling around Exchange Square and the town hall.

Tourists snapped images of the Albert Square building in the sunshine, and some even asked police for photographs like any other day.

But throughout the morning there were rumours and speculation about further incidents - the Arndale Centre was closed for a period after 11.40am while swathes of police descended, shutting off the main city centre thoroughfare of Market Street.

Corporation Street - closed off at Exchange Square - was at the centre of the city’s IRA blast. A postbox which survived the 1996 bombing stood in the foreground while officers stood guard, police tape fluttering around cordoned-off spaces.

It’s true that the streets of Manchester have known horror before, but not like this.

I spoke to students Beth and Melissa who were in the bustling centre when they saw people running from two different directions.

They vanished and ducked into River Island, when an alert came over the tannoy, and a staff member herded them through the back door onto the street.

“There were so many police stood outside the Arndale, it was so frightening,” Melissa told me.

“We thought it will be fine, it’ll be safe after last night. There were police everywhere walking in, and we felt like it would be fine.”

Beth said that they had planned a day of shopping, and weren’t put off by the attack.

“We heard about the arena this morning but we decided to come into the city, we were watching it all these morning, but you can’t let this stop you.”

They remembered the 1996 Arndale bombing, but added: “we were too young to really understand”.

And even now they’re older, they still did not really understand what had happened to the city.

“Theres nowhere to go, where’s safe? I just want to go home,” Melissa said. “I just want to be anywhere that’s not Manchester.”

Manchester has seen this sort of thing before - but so long ago that the stunned city dwellers are at a loss. In a city which feels under siege, no one is quite sure how anyone can keep us safe from an unknown threat

“We saw armed police on the streets - there were loads just then," Melissa said. "I trust them to keep us safe.”

But other observers were less comforted by the sign of firearms.

Ben, who I encountered standing outside an office block on Corporation Street watching the police, was not too forthcoming, except to say “They don’t know what they’re looking for, do they?” as I passed.

The spirit of the city is often invoked, and ahead of a vigil tonight in Albert Square, there will be solidarity and strength from the capital of the North.

But the community values which Mancunians hold dear are shaken to the core by what has happened here.

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