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UK HR E-briefing - New whistleblowing protection on the horizon for the EU

  • United Kingdom
  • Employment law - HR E-Brief

24-04-2018

“Whistleblowing”, the colloquial term given to the act of speaking out and disclosing serious wrongdoing by an employer, has attracted high-profile media attention and legal review in recent years. It is also recognised as having played a critical role in revealing many of the worst examples of crime, environmental breaches, financial impropriety and other corporate misdemeanours in recent years. 

Legal protection for individuals who “blow the whistle” varies enormously around the world, including within the EU where only a handful of countries provide express rights for those who encounter employer reprisal. To address this inconsistency, the European Commission has published a draft Directive aimed at setting minimum standards of employment protection across member states for the first time.

Key employment provisions of the proposed Whistleblowing Directive
Types of disclosure the Directive aims to protect:

  • not just breaches of EU law but deliberate avoidance strategies on the part of an employer, for example tax evasion;
  • disclosure must be “in the public interest” and facts must be believed to be true;
  • legal protection will ordinarily require workers to raise concerns internally (unless there is good reason not to do so).

Types of protection for whistleblowers (“reporting persons”):

  • penalties and other sanctions against employers who dismiss, harass or impose other detriments on reporting persons who make legitimate disclosures;
  • access to interim relief (i.e. a compensation award before legal action is concluded, to alleviate financial hardship during prolonged litigation);
  • a legal presumption that detrimental treatment of a reporting person arises as a result of disclosure (i.e. reversal of the burden of proof);
  • preservation of a reporting person’s anonymity;
  • protection against litigation for breach of contract/ confidentiality;
  • a requirement for all public sector employers and many in the private sector (with the exception of small or micro employers outside of the financial services sector) to have clear, accessible reporting mechanisms which facilitate the disclosure of reporting persons’ concerns;
  • a requirement for employers (or external authorities to whom disclosures are made) to provide feedback to reporting persons regarding developments or progress within three months.    

General Comments

The proposed Directive adopts the term “reporting persons” throughout to describe whistleblowers. This is a significant departure from the terminology applied by many member states who have already introduced their own whistleblowing laws, and for whom the term “worker” is widely adopted. In the UK, for example, whilst a broader definition of worker applies in the context of whistleblowing than in other legal contexts, this falls well short of protecting individuals such as consultants, contractors, suppliers and the array of individuals potentially protected by the Directive. Furthermore, protected reporting persons cannot contract out of the above protections and any non-disclosure agreement purporting to do so will be invalid.

Interestingly, “retaliation” under the Directive includes any threatened, as well as actual, acts or omissions by the employer which are prompted by a disclosure and which cause or may cause unjustified detriment to the reporting person. Again, this protection is more extensive than the existing UK provision which protects against actual detriment.

Depending upon the wording of the final draft of the Directive and how the UK Government then decides to respond, an interesting challenge may lie ahead in terms of how UK law approaches the question of remedies. Frequently, litigation over a whistleblowing complaint is indicative a of a breakdown in relations and the principal remedy available to the individual will be financial compensation. However, the proposed Directive makes clear that, to comply with its terms, the legal remedies provided by national laws must not discourage potential future whistleblowers. The example given in this context is where national law offers compensation instead of reinstatement as a remedy in cases of dismissal, an outcome of which might encourage systematic pay-offs by employers and deter would-be whistleblowers who do not wish to jeopardise their employment. 

Whilst the inevitable focus of the Directive is upon the new protection mechanisms and provisions it aims to introduce, it is worth mentioning that the Directive also preserves employer rights when it comes to false accusations. Any person who suffers prejudice, whether directly or indirectly, as a consequence of the reporting or disclosure of inaccurate or misleading information will still retain the protection and the remedies available under general law and be able to seek compensation where an inaccurate or misleading report or disclosure was made deliberately and knowingly.

Next steps
The draft Directive will now need to be put to the Council of Ministers and the European Parliament before progressing further. It is likely to be several months, therefore, before the Directive will be approved and some 18 to 24 months until it will need to be implemented in individual member states.   

Likely implications for the UK
In all likelihood, the UK will have left the EU before the new Directive is in force and, subject to  transitional arrangements, may not be legally obliged to implement its terms. If it does transpire that the UK is no legal obligation to apply the Directive, the UK Government will need to choose whether it will be appropriate to make changes to our law in any event. There are many reasons why it might want to do so, to align the UK with other member states in this regard. However, there may also be a degree of resistance to making the changes that seem likely to be needed, such as extending the scope of protected persons and the remedies available, when UK whistleblowing law, in the form of Public Disclosures Act 1998, has been in existence in advanced form for over 20 years, where most other European countries have had none. 

For further information on current whistleblowing laws around the globe, see our whistleblowing brochure and global survey.