Employment Contracts

by Kate Russell

The Public Interest Disclosure Act 1998

The act provides protection for ‘whistleblowers’ – employees who are dismissed or victimised as a result of making a qualifying disclosure. In addition to employees, it covers trainees, agency staff, contractors, home workers, police officers and every professional in the NHS. The usual employment law restrictions on minimum length of service and age do not apply.

This means that the disclosure must, in the reasonable belief of the person making it, show that one of the following conditions applies.

  • A criminal offence has been committed, is being committed or is likely to be committed.
  • A person has failed, is failing or is likely to fail to comply with any legal obligation to which he is subject.
  • A miscarriage of justice has occurred, is occurring or is likely to occur.
  • The health and safety of the individual has been, is being or is likely to be endangered.
  • The environment has been, is being or is likely to be endangered.
  • Information tending to show any matter falling within one of the above has been, is being or is likely to be concealed.

In June 2013, four changes came into effect protecting whistleblowers in the workplace.

Removal of the requirement for good faith

The Public Interest Disclosure Act originally required protected disclosures to be made ‘in good faith.’ Many employees made disclosures of matters that were in the public interest but failed in their unfair dismissal claims because their employers were able to show that the employee’s primary motive was to discredit the employer. The ‘good faith’ requirement came under much scrutiny and from June 2013, this requirement does not apply. The employee’s motive in making the disclosure is still relevant, as any compensation awarded to the employee can be reduced by up to 25 percent if the disclosure has been made in bad faith.

Public interest

The employee must now have a reasonable belief that a disclosure is ‘made in the public interest.’ The change in the legal test is intended to address the loophole that that allowed employees to submit a claim about their employer’s breach of their individual contracts of employment or failure to follow due process as protected disclosures. These claims would no longer succeed unless they also give rise to an issue that is in the public interest. There is no prescribed test for what is in the public interest, but the expectation is that it will be rare that breaches of the employer’s legal obligations (for example financial irregularity, discrimination, health and safety, environmental and criminal issues) are not in the public interest. However, there is likely to be a ‘triviality’ threshold in practice.

Vicarious liability

The Act now provides that workers should not be subjected to a detriment at the hands of a co-worker, for example, in a case where an employee has made a disclosure about a colleague’s unlawful conduct. An employer can therefore be liable for the co-worker’s actions, whether or not the employer is aware of or approves the conduct in question. The test will be whether the co-worker’s actions were in the course of his employment. Assuming that existing case law relating to tortious conduct is followed, the detriment in question should be in connection with what the co-worker is employed to do. For example, if the co-worker is the employee’s line manager and the detriment occurs in the course of the employee’s performance review, it clearly would be covered.

An employer will have a defence to any claim about a worker’s conduct if the organisation can demonstrate that it ‘took all reasonable steps’ to prevent the worker from ‘doing that thing’ or ‘doing anything of that description.’ To benefit from this defence, employers must introduce and proactively implement effective whistleblowing policies identifying what amounts to a protected disclosure, the action to be taken when a disclosure is made and the potential disciplinary sanctions for the victimisation of workers for making such a disclosure.

Individual liability

A co-worker can now be individually liable for subjecting a colleague to a detriment. The worker will have a defence if his actions are in reliance on a statement by the employer that the detriment does not contravene the Act and it is reasonable for the co-worker to rely on the employer’s statement.