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Whistle blowing policies - why have them and what to put in them?
Whilst most employers have a staff handbook (or at the very least, a collection of core policies for staff), many have yet to put in place a specific policy about whistleblowing and what employees should do if they discover wrongdoing within their business.
The Public Interest Disclosure Act 1998 and the Employment Rights Act 1996 provide protection for workers and employees from detrimental treatment as a result of them raising their employer’s, or a third party’s; irregular activity or malpractice.
If an employee does suffer detrimental treatment because they blew the whistle, they can complain to the Employment Tribunal and seek compensation for the loss suffered. As with discrimination claims, there is no cap on the amount of compensation which can be awarded.
Why have a Whistleblowing policy?
Having a whistleblowing policy in place can be helpful for the following reasons:
- It gives employers an opportunity to educate staff and management and reinforces the standards expected in their organisation;
- Employees ought to make protected disclosures to a suitably trained manager who:
a. realises the seriousness of the situation;
b. can make sure allegations are investigated as appropriate; and
c. can take steps to limit the potential damage to the employer.
- A clear whistleblowing policy can protect a firm in the event a false or malicious accusation is made by a current or former employee. A whistleblowing policy can explain the consequences of when such an accusation is made;
- Having a whistleblowing policy in place communicates to staff that the employer takes any wrongdoing very seriously and is committed to identifying and remedying it;
- A clear whistleblowing policy encourages a culture where wrongdoing can be addressed quickly and potentially before any regulatory action or damage to reputation;
- A whistleblowing policy can also reinforce to staff the importance of their duty of confidentiality to their firm and clients.
It is therefore important that organisations realise the importance of having clear whistleblowing procedures in place and effectively communicated to staff at all levels. This is even more important for employers in the financial services sector.
The Senior Managers and Certification Regime (“SMCR”) which currently applies to banks, and which will be extended to other financial services employers in 2018, requires firms to take the following steps (and most of these should be recorded in the firm’s whistleblowing policy):
- appoint a Senior Manager as their whistleblowers’ champion;
- put in place internal whistleblowing arrangements able to handle all types of disclosure from all types of person;
- put text in settlement agreements explaining that workers have a legal right to blow the whistle;
- tell UK-based employees about the FCA and PRA whistleblowing services;
- present a report on whistleblowing to the board at least annually;
- inform the FCA if it loses an Employment Tribunal whistleblowing case; and
- require its appointed representatives and tied agents to tell their UK-based employees about the FCA whistleblowing service.
What should be in a Whistleblowing policy?
The whistleblowing charity, Public Concern at Work (PCAW), is dedicated to raising awareness in the importance of whistleblowing in both the public and private sector and how it can help combat fraud, corruption and other irregular activities. PCAW advise that organisations should continually review their whistleblowing policies and regularly communicate to staff the avenues open to them if they wish to make a disclosure.
PCAW recommend that a strong whistleblowing policy will make the following points clear:
- The organisation takes malpractice seriously providing example types of concerns to be raised and how to distinguish them from another grievance;
- That staff have the option to raise concerns outside of line management;
- That staff are enabled to access confidential advice from an independent body;
- That the organisation will respect the confidentiality of a member of staff raising a concern.
Whistle blowing policies ought to be tailored to the particular employer’s business and sector. For example, regulated businesses ought to address how breach of regulations should be dealt with and in what circumstances, if any, the employee should report to the regulatory. Also, employers who have a turnover of more than £36m ought to make sure that their whistleblowing policies cover anti-slavery and human trafficking within the supply chain and highlight it as an issue that should be flagged via this channel.
If you need any help drafting or reviewing a whistleblowing policy, contact a member of the Fox Williams HR law team