Mills & Reeve: HR Law Live

Keeping tabs on whistleblowing

Public policy on whistleblowing seems to be moving into a new phase. After extensive changes to the legislation designed to protect individuals in 2013 (see our briefing for a summary) the Government is now placing increasing emphasis on how organisations respond when information about malpractice is disclosed to them.

The health sector provides the most newsworthy examples of this trend. The review by Sir Robert Francis into whistleblowing in the NHS published last month includes 20 groups of recommendations, including the appointment of “Freedom to Speak Up Guardians” in all NHS organisations (see our posting here for further details). A few weeks later a report led by Kate Lampard set out the general lessons to be learnt from the individual Jimmy Savile sex abuse investigations at various NHS hospitals. Among other things, it looked into how changes could be made so that staff felt more comfortable about raising concerns.

While the NHS has caught most of the headlines, there are signs that other sectors are aware of the need to grapple with similar issues. The FCA and the PRA have recently published a consultation on a new set of rules for dealing with whistleblowing that will apply a range of organisations in the financial sector including banks, building societies, credit unions and insurers. The National Audit Office has also published a report on the role of prescribed persons – ie the regulatory bodies with whom individuals may raise concerns about wrongdoing and still maintain protection under the whistleblowing legislation. It concludes that more could be done within the existing legal framework to better support whistleblowers and to learn from the concerns they raise.

Linked to these developments, there are two relatively minor changes to the underlying legislation in the pipeline. Firstly, the Small Business, Enterprise and Employment Bill, which will shortly complete its passage through Parliament, includes a power to make regulations requiring prescribed persons to produce an annual report on disclosures made to them. In its response to the Francis report, the Government has also promised to extend the scope of the whistleblowing legislation so that it protects applicants for posts in the NHS from victimisation, as well as current and former post-holders. There appear to be no plans to extend this principle more widely, which would put give whistleblowers applying for jobs a similar level of protection to that conferred on victims of discrimination under the Equality Act.

EAT endorses generous approach to scope of whistleblowing protection

An Employment Appeal Tribunal decision has demonstrated how individuals can be protected against victimisation for making protected disclosures even if they do not qualify as workers or employees. In this case a health and safety adviser was entitled to bring a whistleblowing claim even though he had no contractual relationship with either the end-user or the agency which supplied his services.

The EAT was looking at a pretty elaborate provision of the Employment Rights Act which extends the protection of our whistleblowing legislation to a number of categories of people who would not otherwise qualify as workers. This includes people who are introduced or supplied by third parties in circumstances where the terms on which they are engaged are “in practice substantially determined” by either the third party or the person for whom he or she works. The EAT emphasised that the use of the words “in practice” meant that employment tribunals should look beyond the contractual documents to the way in which the relationship has arisen and has been governed.

So in this instance, the fact that the claimant’s services were engaged via a personal service company, which in turn contracted with the employment agency, did not prevent him from bringing a claim. Even though his name was not mentioned in the agreement between the agency and the end-user, it was clear from the surrounding circumstances that he was in effect being introduced as an individual to do the work. It was also clear that the user of the service in practice determined the terms upon which he was engaged – for example by requiring him to report to a named individual.

This case goes further than previous case law on contract workers who blow the whistle, and comes just a month after the Supreme Court’s ruling that members of limited liability partnerships are protected. While the Government has recently ruled out any major extension to the scope of our whistleblowing legislation, our courts seem increasingly willing to interpret its existing provisions in a way that is generous to would-be whistleblowers.

Proposals for whistleblowing and zero-hours contracts revealed

The Government has unveiled a further raft of employment law changes in the Small Business, Enterprise and Employment Bill, published earlier this week. As well as provisions on whistleblowing and zero-hours contracts, it contains a number of other employment measures announced earlier this month in the Queen's Speech.

The Government’s consultation on zero-hours contracts last year attracted over 36,000 responses. That is perhaps the reason why the Government has not published a full response and has dealt with it by a press release. As widely expected, a clause has been included in the Bill to make exclusivity clauses unenforceable against the worker. The provisions in the Bill itself are quite limited, though it does confer authority to impose additional requirements by secondary legislation.

The Bill is also a vehicle for carrying forward the Government’s whistleblowing proposals in its recently published response to consultation. As with zero-hours, the measures in the Bill are not as comprehensive as many had hoped. The Government has decided against further legislation to widen the scope of existing protection for whistleblowers, with the minor exception of extending its coverage to student nurses. Instead it plans to encourage culture change by publishing more comprehensive guidance. There is, however, a relatively modest provision in the Bill so that the statutory bodies responsible for receiving disclosures can be required to publish an annual report of the disclosures made to them.

Other employment measures in the Bill include:

• increasing the maximum financial penalty for failing to pay the national minimum wage to £20,000 per worker;
• imposing fines on employers who fail to pay tribunal awards or sums due following ACAS-conciliated settlements; and
• making public sector exit payments repayable in certain circumstances.

Supreme Court says LLP members can be workers too

The Supreme Court has decided that the Court of Appeal was wrong to conclude that members of limited liability partnerships could not also be workers. This closes what would otherwise have been a loophole in our whistleblowing legislation.

The key reason for the divergence in judicial views was a difference of opinion about the correct interpretation of a relatively obscure provision of the Limited Liability Partnerships Act.  In effect, the majority of the Supreme Court, unlike the Court of Appeal, thought they were free to decide whether or not the claimant was a worker without worrying about what her status would have been under an old-style partnership.

The Supreme Court agreed with the Employment Appeal Tribunal that the key ingredients for a non-employee worker were present. Ms Bates van Winkelhof was a junior equity partner in a firm of solicitors, entitled to a fixed share of the profits. She was an integral part of the business and could not market her services to anyone else. It did not matter that she was not in a “subordinate” position to the LLP as this was not always essential to attain worker status, particularly for professional jobs where there was necessarily a high degree of autonomy.

This decision will be significant not only to LLP members, but to other individuals working for organisations in professional jobs under arrangements which do not confer employment status.

The claimant can now proceed with her whistleblowing claim against the partnership. The firm also ran a preliminary point on the territorial scope of her claims, given that they arose while she was working in Tanzania. However, that argument was dismissed by the Court of Appeal and was not appealed to the Supreme Court (see our previous posting here).

Protected disclosure can be pieced together from series of e-mails

The EAT has upheld an employment tribunal decision which took a broad view of the definition of a protected disclosure. That meant that a worker was not precluded from bringing a whistleblowing claim because he was unable to point to a single document which set out the totality of his concerns.

The dispute arose against the background of the exceptionally cold winter of 2010. The claimant’s job involved supervising a national network of sales managers who had to drive around the country to visit customers. In late November, at the beginning of the first cold snap of the winter, he e-mailed the health and safety manager asking for guidance about driving in the snow and whether a risk assessment had been done. This was followed later the same day by a further e-mail re-iterating his request for formal guidance and pointing out that it was dangerous on the roads. Finally, about a week later he e-mailed a member of the HR department asking for a policy statement. In this latest e-mail he pointed out that he had himself been out on the snowy roads and knew how dangerous it could be. He said that as a manager he was responsible for the health and safety of his staff. This last e-mail also mentioned other concerns including about loss of pay if his staff were unable to travel.

The employer argued that the whistleblowing claim should be struck out because none of these e-mails, taken on their own, amounted to a protected disclosure. The EAT has decided that the employment judge was correct to allow the claim to proceed to a full hearing. It said that the e-mails could be read as a whole, even though they did not all go to the same person. In addition, that fact the information about the dangers of driving in the snow was mixed in with other topics did not matter. Finally arguments that the information disclosed was not specific enough were dismissed.

This case demonstrates that protected disclosures can arrive in many forms, and can even be spread across a number of different documents. Attempts to shut out claims based on a narrow view of the statutory definition are not likely to be successful. When disciplining or dismissing workers, employers need to be particularly alert to the possibility that protected disclosures may have been made.

Employment law: looking back over 2013 and forward to 2014

To mark the year’s turning point, we have taken 10 core employment law topics and examined what has happened to them in 2013 which is likely to be of continuing significance for employers. We also get out our crystal ball and look at what is likely to change in the course of 2014.

If we had to select three key issues to keep track of in 2014 our choice would be:

• The Court of Appeal’s decision in the Woolworths litigation, which will clarify whether or not redundancies need to be aggregated across an employer’s entire operation for collective consultation purposes.
• The launch of ACAS’ pre-issue conciliation scheme in April.
• The emerging case law about the calculation of statutory holiday pay, including decision of the European Court of Justice expected later in 2014, which it is hoped will clarify how commission should be treated.

The briefing is available on our website here.

Commission calls for better protection for whistleblowers

Last week’s report from the Whistleblowing Commission has called for significantly improved protection for whistleblowers and the adoption of a statutory code of practice.

The absence of protection for job applicants is the most obvious gap that the Commission has asked the Government to fill. It would also like the statutory provisions to be simplified to make them easier to apply, as well being amended to cover an even wider range of workers.

The Commission thinks regulators could do more to encourage the adoption of effective whistleblowing policies, though it has stopped short of calling for them to be compulsory for all businesses. The best illustration of the change in culture likely to be required if its proposals are adopted comes from the draft code of practice attached to the report. The code would not only stipulate the content of policies, but require regular audits of their effectiveness. Details of the outcome of these audits would need to be published in an organisation’s annual report.

Many of the Commission’s recommendations coincide with the issues already canvassed in the Government’s call for evidence which closed on 1 November. There is clearly the political will to build on the changes to the law introduced in June. It will be interesting to see  what further measures the Government is prepared to embrace.

 

June employment law changes

Here is a quick reminder of the main changes to employment law that will take effect tomorrow, 25 June:

• A major overhaul of the protection for whistleblowers, including the introduction of a public interest requirement for protected disclosures, and imposing vicarious liability on employers (see our briefing here for more details).
• The removal of the two-year qualifying period from unfair dismissal complaints where the main reason for dismissal is the employee’s political opinions or affiliation.
• The abolition of the Agricultural Wages Board.

Changes already announced for later in the Summer include the introduction of fees in employment tribunals, and a major overhaul of their rules of procedure. Both these changes will take place on 29 July.

Court of Appeal clarifies territorial scope of Equality Act

Last week’s Court of Appeal decision has confirmed that a sex discrimination claim could be brought by a partner in a legal firm arising out of work she had been doing in Tanzania. However it ruled out a whistleblowing claim on the grounds that she did not satisfy the statutory definition of worker.

The wider interest of the case derives from the comments made by the Court of Appeal about two recent Supreme Court cases where similar questions arose about the scope of the Employment Rights Act. It has clarified that where the claimant is living or working at least part of the time in the UK, it is only necessary for there to be a “sufficiently strong” connection with the UK to make it a claim that Parliament would have regarded as “appropriate” to be dealt here. On the other hand where the claimant is a true expatriate – ie living and working wholly abroad – then there would have to be “exceptional factors” which would displace the “territorial pull of the place of work”.

Putting it another way, while it will ultimately be a matter for the employment tribunal to decide, it should not be too hard for an international commuter to bring proceedings in the UK even if the claim arises out of an incident that happened abroad. Someone working partly in the UK and partly abroad for an employer based in the UK will probably be able to make an even stronger case to launch domestic proceedings.

In this case the fact that claimant was a member of an English LLP, was paid mainly from London and did some of her work there, was regarded as a sufficiently strong connection with the UK. This was despite her spending most of her working time in Tanzania. Furthermore it is implicit in the Court of Appeal’s reasoning that the same considerations apply whether one is dealing with a claim for unfair dismissal or for discrimination under the Equality Act.

The denial of worker status to the claimant in this case did not defeat her claim for sex discrimination because she had a separate right to bring proceedings as a LLP member under the Equality Act. However, subject to any appeal, it makes it clear that LLP membership and worker status are mutually exclusive.

Court of Appeal reveals gap in whistleblowing protection

The intervention of the whistleblowing charity Public Concern at Work has failed to persuade the Court of Appeal to plug what it sees as a gap in the legislation designed to protect whistleblowers. NHS Manchester v Fecitt is about the not uncommon situation which arises where a small group raises concerns about a co-worker, and as a result is cold-shouldered by other colleagues. The Court of Appeal had to assess how far an employer must go to protect the whistleblower in this situation.

There is nothing explicit in the legislation to impose personal liability on employees who victimise whistleblowers, or to deem employers to be liable in this situation. The Court of Appeal said that without such provision, an employer was not liable merely because of the actions of its employees. However it was perfectly possible that in harassing a whistleblower, a worker could commit some other kind of legal wrong for which the employer could be made liable. Equally, deliberately allowing this kind of behaviour to go unchecked could be sufficient to amount to a deliberate failure to act on the part of the employer, which would be enough to make it liable in its own right.

So it would be a mistake to see this decision as an employer’s charter. However it has highlighted one area in which the whistleblowing legislation offers less protection to wronged employees than the corresponding provisions of the Equality Act. It will be interesting to see whether the Government, which has recently announced plans to strengthen protection for whistleblowers in the NHS, acts to address this discrepancy.