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

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The polls are bad, but Jeremy Corbyn’s office has a secret weapon

How a shake-up of the leadership team has steadied nerves at the top of Labour. 

If polling had existed back in 1906, Jeremy Corbyn quipped at one recent strategy meeting, the Labour Party would never have got started.

As far as Labour’s direction is concerned, it is that meeting at four o’clock every Monday afternoon that matters. The people who attend it regularly are the Labour leader, his aides, the shadow home secretary, Diane Abbott, and the shadow chancellor, John McDonnell, as well as the party’s election co-ordinator, and their respective aides.

In recent weeks, the meetings have been stormy affairs, and not only because the numbers from the party’s own pollsters, BMG Research, mirror the uniformly bleak picture from the public polls. There is also concern over Karie Murphy, Corbyn’s office manager. Murphy is highly rated by Corbyn for having brought increased intensity and efficiency to the leader’s office. Corbyn often struggles to deliver bad news in person and appreciates that Murphy will intervene on his behalf.

Her intensity is not uniformly welcomed. “She could start a fight with her own reflection,” in the wry words of one friend. An argument with Jon Trickett – the Hemsworth MP whose unusual career trajectory took him from being a parliamentary aide to Peter Mandelson to the inner sanctum of Ed Miliband’s leadership and finally to the role of election co-ordinator for Corbyn – led to Trickett going on a two-week strike, recusing himself from vital meetings and avoiding any contact with Murphy.

That row eventually led to Trickett being stripped of his role and banished from the Monday meeting. Murphy had a similar turf war with the campaigns director, Simon Fletcher, which culminated in Fletcher resigning on 17 February. In a letter to staffers, he called on the party to “keep the promise” of Corbyn’s first leadership bid, a period when Fletcher was central and Murphy had yet to start working for the Labour leader.

All of which, in better political weather, would simply be part of the back-and-forth of office politics. However, set against the backdrop of unease about by-elections in Stoke-on-Trent Central and Copeland, and a series of unhelpful leaks, it adds to a sense of vulnerability around the leadership. One loyalist shadow cabinet minister calls it “the most dangerous time” for Corbyn since he was first elected leader.

Why the danger? Contrary to popular myth, the backbone of Jeremy Corbyn’s successive landslide victories was not a hard-pressed twentysomething, struggling to find a fixed job or to get a foot on the housing ladder. The shock troops of Corbynism, at least as far as the internal battle in the Labour Party went, were baby boomers. Many of them were either working in, or on early retirement from, a charity or the public sector, deeply concerned about the rightward drift of British politics and worried about the next generation.

Corbyn’s decision to whip Labour MPs in support of triggering Article 50 – the process whereby Britain will begin its exit from the European Union – was, in their eyes, a double heresy. The vote signalled acceptance that the forces of the Eurosceptic right had won on 23 June, and it conceded that visa-free travel, membership of the single market and freedom of movement are over.

None of this is automatically great news for Corbyn’s internal critics – not least because the vote on Article 50 is rare in being an issue that unites Corbyn with most Labour MPs. Yet it adds to the sense that his leadership has passed its best-before date.

Adding to the general malaise is a series of unhelpful leaks. There was a story in the Sunday Times on 12 February claiming that the leadership was road-testing possible replacements for Corbyn, and on 20 February the Mirror claimed that the Labour leadership had commissioned a poll to find out whether or not the leader should quit his post. These stories are hotly denied by the leader’s office. Some in Corbyn’s inner circle believe they are the work of Trickett, embittered at his demotion.

It is true that Corbyn is not enjoying the job as much as he once did. However, if the conversation shifts from the minutiae of Brexit to his natural terrain of the NHS and the continuing consequences of government cuts on education and the prisons service, he could quickly find himself relishing the role once more.

Corbyn retains two powerful cards. His newly energised office, under Karie Murphy, is one. Although her brisk approach has generated some public rows, the feeling in the leader’s office is that a chief of staff was needed, and Murphy has assumed that role. The media team has also grown sharper with the addition of David Prescott (son of John), Matt Zarb-Cousin and the former Momentum spokesman James Schneider.

Corbyn’s second asset is more unexpected. His rivals inside the party now fear rather than relish an immediate end to his leadership. A former shadow cabinet member splits his supporters into two groups: “idealists and ideologues – the first we can inspire and win over, the second have to be got rid of”. In their view, the idealists have not yet moved away from Corbyn enough to guarantee victory; the ideologues, for their part, will slink off as Corbyn puts the demands of his office above their interests, as he did over Article 50.

Although self-defeating panic has never been a rare commodity in the Labour Party, the settled view of Labour MPs is that their leader must be given time and space rather than hustled out of the door. There is an awareness, too, that MPs who are united in opposition to Corbyn are divided over many other issues.

So, while the inner circle’s Monday meetings might be fraught, and Labour’s current polling would have given Keir Hardie pause, Jeremy Corbyn is safe. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.

This article first appeared in the 24 February 2017 issue of the New Statesman, The world after Brexit