As part of our summer 2024 employment trends series, we look at developments in whistleblower protection.
Increased protection for whistleblowers
There is an increasing global trend towards strengthening legal protection for whistleblowers to help encourage the reporting of wrongdoing. In the UK, this has historically meant protection against dismissal and detriment for whistleblowers. There have been calls to extend these protections and to simplify the process. In its Plan to Make Work Pay, Labour committed to strengthening protection for whistleblowers, including by updating protection for women who report sexual harassment at work.
Global influence
All EU member states had to implement the EU Whistleblowing Directive which applies to companies with 250 or more employees from 17 December 2021 and to those with 50 or more employees from 17 December 2023. The Directive differs from UK law in several key respects, in particular:
- The Directive mandates that companies establish channels and procedures for internal reporting and follow-up, as well as for external reporting to competent authorities. This is not currently a requirement under UK law.
- Whilst UK law provides protection against dismissal and detrimental treatment as a result of making a protected disclosure where that disclosure was made in the public interest, the Directive provides for a wider range of protections against retaliation. These include suspension of the retaliatory act, support measures for whistleblowers (such as legal aid and psychological support) and penalties for those who hinder reporting, retaliate against whistleblowers or fail to keep the whistleblower’s identity confidential.
- Disclosures protected under the Directive are broader than those under UK law, extending to disclosures about specific issues such as public procurement, financial services, product and transport safety, environmental protection, public health and consumer protection.
Whilst the Directive is not binding on the UK following Brexit, its influence will still be felt by UK employers. Multinational companies may wish to harmonise their policies and procedures, so that whistleblowers in the UK are treated in the same way as those in Europe. Others may look to the Directive as best practice and incorporate it into their internal policies.
Regulatory focus
Various regulators in the UK (such as the FCA and the PRA) have placed an increased emphasis on the importance of whistleblowing processes as part of good corporate governance and compliance. This includes requirements for companies to appoint a whistleblowers’ champion and to put in place effective whistleblowing policies. Following survey results published by the FCA in 2023, which indicated significant dissatisfaction from whistleblowers as to the ways in which complaints raised with the regulator had been handled, the FCA has taken steps this year to review its approach. For example, it proposes to make public announcements at an early stage when it launches an investigation into a regulated firm in order to improve transparency.
