Companies now have a legal obligation to protect themselves and their employees by encouraging the exposure of genuine wrongdoing.
Whistleblowers are often thought of as malicious. Take the recent case of a senior executive who worked for a company supplying goods to a Government department. Having been made redundant the man was seriously aggrieved. In revenge he contacted the press alleging that invoices from his former company were routinely being "padded".
The accusations were found to be completely without foundation by both an Employment Appeal Tribunal and an Industrial Tribunal but extensive damage had already been done. As a result of the allegations parliamentary questions were tabled and a police investigation mounted. Furthermore, the Government department cancelled its order with the company. The financial loss was severe, to say nothing of the damage to the company's reputation.
What happens, though, when employees are aware of genuine wrongdoing within a company? Are they obliged to make it public and how should they go about it? At the heart of the issue is the confidence that the employee has in the system of reporting. After all where is the incentive to blow the whistle if the employee risks losing his/her job in the process?
From 1 January 1999, the Public Interest Disclosure Act will protect workers from being dismissed or victimised for making a "protected disclosure". To apply, the disclosures must be made in good faith and use of internal procedures is encouraged before any claim is made outside of the company.
If employees are subsequently victimised they are now able to make a claim to an Employment Tribunal. There will be no financial cap on awards, with settlements based solely on loss suffered.
In order to protect themselves against such an action, employers should ensure that appropriate internal procedures are in place.
Sue Nickson, Head of Employment at Hammond Suddards, explains: "It is vital that companies have clearly understood procedures in place. From an employer's point of view it is essential that wrongdoing is uncovered. In order for that to happen employees must be made to feel that they can disclose information without fear of negative consequences.
This legislation will be very beneficial to business if it serves as a catalyst for the setting up of correct internal procedures."
For further information please contact Liat Shimron, e-mail: Click Contact Link , 7 Devonshire Square, Cutlers Gardens, London EC2M 4YH, UK, Tel: + 44 171 655 1000
This article was first published in the March 1999 Hammond Suddards Commercial Dispute Resolution Newsletter
The information and opinions contained in this article are provided by Hammond Suddards. They should not be applied to any particular set of facts without appropriate legal or other professional advice.
Whistleblowers are often thought of as malicious. Take the recent case of a senior executive who worked for a company supplying goods to a Government department. Having been made redundant the man was seriously aggrieved. In revenge he contacted the press alleging that invoices from his former company were routinely being "padded".
The accusations were found to be completely without foundation by both an Employment Appeal Tribunal and an Industrial Tribunal but extensive damage had already been done. As a result of the allegations parliamentary questions were tabled and a police investigation mounted. Furthermore, the Government department cancelled its order with the company. The financial loss was severe, to say nothing of the damage to the company's reputation.
What happens, though, when employees are aware of genuine wrongdoing within a company? Are they obliged to make it public and how should they go about it? At the heart of the issue is the confidence that the employee has in the system of reporting. After all where is the incentive to blow the whistle if the employee risks losing his/her job in the process?
From 1 January 1999, the Public Interest Disclosure Act will protect workers from being dismissed or victimised for making a "protected disclosure". To apply, the disclosures must be made in good faith and use of internal procedures is encouraged before any claim is made outside of the company.
If employees are subsequently victimised they are now able to make a claim to an Employment Tribunal. There will be no financial cap on awards, with settlements based solely on loss suffered.
In order to protect themselves against such an action, employers should ensure that appropriate internal procedures are in place.
Sue Nickson, Head of Employment at Hammond Suddards, explains: "It is vital that companies have clearly understood procedures in place. From an employer's point of view it is essential that wrongdoing is uncovered. In order for that to happen employees must be made to feel that they can disclose information without fear of negative consequences.
This legislation will be very beneficial to business if it serves as a catalyst for the setting up of correct internal procedures."
For further information please contact Liat Shimron, e-mail: Click Contact Link , 7 Devonshire Square, Cutlers Gardens, London EC2M 4YH, UK, Tel: + 44 171 655 1000
This article was first published in the March 1999 Hammond Suddards Commercial Dispute Resolution Newsletter
The information and opinions contained in this article are provided by Hammond Suddards. They should not be applied to any particular set of facts without appropriate legal or other professional advice.
