Whistle blowing is the term used when an employees raises a concern about a possible fraud, crime, danger or other serious risk that could threaten customers, colleagues, shareholders, the public or the organisation’s own reputation.
In this article, we explain why your business needs a whistle blowing policy and why, instead of having a ‘kill-joy’ reputation, if implement properly, a whistle blowing policy can protect your business against numerous risks.
Whistle blowing low down
As an early warning system, whistle blowing can help alert employers to risks such as:
A danger in the workplace;
Fraud in, on or by the organisation;
Miss-selling or price fixing;
Offering, taking or soliciting bribes;
Dumping damaging material in the environment;
Misreporting performance data.
Risk comes with the running and management if every business. Any early warning system such as a whistle blowing policy should be welcomed. Whenever such a situation arises, the first people to know of the risk will usually be those who work in or for you. Yet while these are the people best placed to raise the concern before damage is done, they often fear they have the most to lose if they do speak up.
Research for the Institute of Business Ethics1 has shown that while one in four employees are aware of misconduct at work, more than half (52%) of those stay silent.
If you can encourage employees to speak up, you will be better able to:
Deter wrongdoing;
Dick up potential problems early;
Enable critical information to get to the people who need to know and can address the issue;
Demonstrate to stakeholders, regulators and the courts that they are accountable and well managed;
Reduce the risk of anonymous and malicious leaks;
Minimise costs and compensation from accidents, investigations, litigation and regulatory inspections; and
Maintain and enhance the businesses’ reputation.
In essence, a whistle blowing system promotes staff being able to by-pass the direct management line because that may well be the area about which their concerns arise, and that they should be able to go outside the organisation if they feel the overall management is engaged in an improper course.”
Good policies
A good whistle blowing policy:
Provides examples distinguishing whistle blowing from grievances;
Gives employees the option to raise a whistle blowing concern outside of line management;
Provides access to an independent helpline offering confidential advice;
Offers employees a right to confidentiality when raising their concern;
Explains when and how a concern may safely be raised outside the organisation (e.g. with a regulator)
Whistle blowing or grievance?
Whistle blowing is where an employee has a concern about danger or illegality that has a public interest aspect to it: usually because it threatens others (e.g. customers, shareholders or the public). A grievance or private complaint is, by contrast, a dispute about the employee’s own employment position and has no additional public interest dimension. Unless the organisation’s arrangements make this distinction clear, it cannot assume or expect that its employees will understand the difference and act accordingly.
Avoiding troublemakers
You are probably concerned that encouraging whistleblowers will boost the office goodie two shoes to whinge and complain. Not so. Good whistle blowing arrangements will have the opposite effect by providing the great majority of the workforce with a safe alternative to silence. If, however, an organisation’s approach is to treat whistleblowers as troublemakers, the chances are that (a) any troublemakers among its workforce will assume the policy has been designed for them, and (b) the workplace culture will be one where troublemakers can flourish. Rather than have a legalistic policy, it is much better to develop and write it for the majority of staff: for people who might discuss their concern with a family member or close friend but who, in the absence of an open workplace culture, would be unlikely to have the confidence to raise it with their manager or someone senior in the organisation.
Do I have to have a policy?
The Public Interest Disclosure Act (PIDA) is known in the UK as the whistle blowing law. The Act provides that employers should not victimise any worker who blows the whistle in one of the ways set out in the legislation. There is no statutory requirement in the Public Interest Disclosure Act (PIDA) for organisations to have a whistle blowing policy.
The Government expects public bodies to have a policy in place and the whistle blowing schemes in local authorities and NHS bodies in England are assessed regularly as part of their external audit and review. Under the Combined Code on Corporate Governance, companies listed in the UK are obliged to have whistle blowing arrangements or explain why they do not.
Note, under PIDA, the adequacy of an organisation’s whistle blowing arrangements is one of the factors that tribunals and courts look at when they consider whether a wider public disclosure (say to the media, an MP or a consumer or citizen group) is protected under the legislation.
What about small organisations?
A small organisation’s whistle blowing arrangements are best determined by its structure, its culture and the nature of the risks it faces. There is no “one size fits all” approach to this issue. For many small organisations, where the person in charge of the organisation knows the workforce by name, there will often be no need to introduce a procedural or complicated whistle blowing policy. Rather, in such organisations, it will be enough if those in charge give an unambiguous statement that it is safe and accepted for staff to speak up if they have a whistle blowing concern and that employees are reminded of this and given an opportunity to discuss the arrangements at staff meetings annually.
In small organisations there will often be additional reasons to make clear:
The difference between a whistle blowing concern and a private complaint;
That employees and managers understand their role and that managers should not feel undermined if they are by-passed;
The difficulty of maintaining confidentiality;
The benefits of an independent helpline;
How an employee can make an external disclosure.
The whistle blowing policy
Does the policy have to use the word “whistle blowing”?
The term “Whistle blowing” has negative connotations so is often avoided. Whistle blowing is still confused with the anonymous informing (often on neighbours) that occurred and occurs under totalitarian regimes.
Confidentiality
While openness is the ideal, in practice some staff will have good reason to feel anxious about identifying themselves at the outset. A whistle blowing policy should ensure they can also approach someone confidentially. This means that their name will not be revealed without their consent, unless required by law.
Where confidentiality is promised, the organisation should make clear to the employee that, even though his or her name will not be mentioned, it cannot guarantee that others will not try to deduce (correctly or otherwise) their identity. Where the employee has already voiced the concern to colleagues or their manager, it is worth pointing out that others may assume they are the source of any disclosure made higher up in the organisation. This is another example of why open whistle blowing is the best approach. Often when an employee understands this, he or she will say that they do not want to invoke or retain confidentiality and will raise the concern openly.
Anonymous informing
Whistle blowing policies should not actively encourage or solicit employees to raise concerns anonymously (where the employee does not identify him or herself at any stage to anyone). This is because anonymity makes it difficult to investigate the concern and to deter misuse and impossible to liaise with the employee (to seek clarification or more information, to assure them or to give them feedback).
Should employees be required to blow the whistle?
Organisations should not make it a requirement that employees blow the whistle as such a duty is unlikely to bolster staff confidence in the arrangements or help foster or embed a more open and accountable culture. If the organisation decides itself to make whistle blowing a duty then the law is likely to say that it is unfair if that duty is not enforced consistently. This would likely mean that whenever an employee does correctly blow the whistle, the organisation would be expected to see if there are colleagues who have failed to do so and consider taking action against them. Finally, such a duty is difficult to operate in a pragmatic way as some staff may feel obliged to report each and every infraction they see or suspect.
There are some statutory obligations on certain employees to report specific concerns. Examples include duties under the Proceeds of Crime Act 2002 on money laundering, on pension fund trustees under the Pension Act 2004 and on “approved persons” under the financial services legislation. Where such duties exist, they should be made clear to the specific staff involved and, if necessary, be dealt with in a distinct policy.
If by chance you find some error of law or fact in any Net Lawman information page, do please tell us. We should also welcome your suggestions for new subjects for information pages. These notes:
Do not provide a complete or authoritative statement of the law;
Do not constitute legal advice by Net Lawman;
Do not create a contractual relationship;
Do not form part of any other advice, whether paid or free.
