Proposed EU Whistleblowing Protection
Whistleblowing regularly dominates the media headlines and recent examples include the Panama Papers and Cambridge Analytica. Evidently, whistle-blowers play an important role in the uncovering of unlawful activities which can hugely impact society.
“Whistleblowing” is the process under which workers and employees can report certain types of wrongdoing within an organisation. The wrongdoing which is disclosed must be in the public interest meaning it must affect the general public.
Whistle-blowers in the UK are protected under the Public Interest Disclosure Act 1998, which provides protection for workers and employees reporting wrongdoing against employers or third parties regarding victimisation or dismissal. Under the PIDA 1998, whether a whistle-blower qualifies for protection depends upon the following tests:
Have they made a qualifying disclosure?
- Disclosure information: the worker or employee must make a disclosure of information.
- Subject matter of the disclosure: The information must relate to one of six types of “relevant failure.”
- Reasonable belief: The worker or employee must have a reasonable belief that the information tends to show one of the relevant failures.
- In the public interest: The worker or employee must have a reasonable belief that the disclosure is in the public interest.
- Is it also a protected disclosure: it must qualify which depends on the identity of the person who “blew the whistle”.
It should be noted that the case law makes it clear that such disclosures can be protected whether they were made:
- During employment with the employer
- During employment with a previous employer
- After employment has terminated
- Before the PIDA 1998 came into force.
Under the common law, disclosures of wrongdoing in the public interest may override implied terms of an employment relationship such as mutual trust and confidence.
Whilst whistle-blowers in the UK are protected, protection varies greatly across other Member States of the European Union (“EU”). At present, only 10 EU Member States ensure whistle blowers are fully protected. Consequently, the EU has published a new Whistleblowing Directive (the “WD”) with a view to harmonising and setting minimum standards of protection across the member states.
The WD will ensure EU wide protection for whistleblowing on breaches of EU legislation in areas including financial services, money laundering, terrorist financing, product safety, transport safety, environmental protection, consumer protection, privacy and data protection.
Under the WD, companies with more than 50 employees or with an annual turnover of over 10 million euros will be required to have an internal procedure in place to deal with whistleblowing reports. This internal reporting procedure will be the first stage in a three tier process, followed by reporting to competent authorities and if no action is taken, public/media reporting in circumstances where there is imminent danger to the public interest or irreversible damage.
Of course, the UK is due to exit the EU on the 29 March 2019 and if passed, the WD would take effect after the UK leaves the EU due to the amount of time the implementation new legislation takes. However, the UK could still be required to implement the WD if it forms part of the core EU standards and has to be adopted in order to establish a trade deal.
If you would like more information on this article, please contact Millie Kempley, or you can give us a call on 0345 070 6000.