TaxPersonal TaxLaw to protect whistleblowers

Law to protect whistleblowers

New Act will defend and offer unlimited compensation to whistleblowers in both the private and public sectors.

Far-reaching legislation to protect and compensate whistleblowers in both the public and private sectors will take effect in July, trade secretary Stephen Byers has announced.

The decision to enact new laws comes just months after the high-profile disclosures of fraud and mismanagement at the European Commission by Dutch auditor Paul van Buitenen. His revelations led to the resignation of the entire European Commission.

The Act outlaws victimisation of people who blow the whistle and introduces sanctions against the cover up of serious malpractice – including crimes, civil offences, miscarriages of justice and dangers to health and safety or the environment.

Employees from company directors, senior professionals and civil servants to trainees are covered, though whistleblowers must have an honest and reasonable suspicion that malpractice has occurred.

The Act also offers protection for external disclosures to prescribed bodies like the Inland Revenue, the Financial Services Authority and the Health and Safety Executive. Wider disclosures to the police and the media are protected where they are reasonable and not done for personal gain.

Employees who are victimised or dismissed in breach of the Act can bring a claim for compensation. All awards will be uncapped and based on losses suffered. Sacked employees can also apply for an interim order to keep their job. And gagging clauses that conflict with the Act will become void.

‘This is the most far-reaching whistleblowing Bill in the world,’ said Guy Dehn, director of Public Concern at Work, which helps organisations introduce whistleblowing policies. ‘The full force of the Act will be felt in the City and in boardrooms, as even the highly paid will be fully protected when they blow the whistle. Companies should review their arrangements for whistleblowing, and check that their contracts comply.’

Byers said: ‘There is a litany of cases in which people were unable to expose wrong-doing at their place of work with tragic consequences. It is appropriate to delimit the level of compensation to which an individual is entitled.’

See Leader, 15 April

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