‘Whistleblowing’: UK and European developments

A recent UK Court of Appeal decision provides an opportunity for a quick update on European whistleblowing.

The UK case – the public interest requirement

UK law protects employees who blow the whistle. The protection is against detriment suffered as a result of the disclosure. As damages are unlimited the cost to the employer can be significant. Protection is given when:

  • information is disclosed correctly which the worker reasonably believes is true;
  • the disclosure is ‘in the public interest’; and
  • the information concerns one or more of the following:
    o a criminal offence;
    o breach of any legal obligation;
    o a miscarriage of justice;
    o danger to the health and safety of someone;
    o damage to the environment; or
    o the concealment of any information regarding the above.

The question in the recent UK case was, what counts as ‘in the public interest’?  The disclosure related to a wrongful manipulation of the employer’s accounts which had the effect of reducing the bonus payable to about 100 employees.

The company argued that whistleblowing protection was not available as the disclosure was an entirely private matter between the company and the 100 affected employees and therefore not in the ‘public interest’.

The court disagreed – finding that the disclosure was in the public interest. The matter disclosed did not always have to extend beyond the company in question. Each decision would always depend on the facts but relevant factors included how many people were affected, the prominence of the entity in the wrong (the UK employer here is a well-known and respected high street brand), whether the wrongdoing was deliberate or accidental and whether it was significant or trivial.

UK branches of overseas banks

Meanwhile, the UK Financial Conduct Authority whistleblowing rules already in place for UK banks and insurers will, from September 7th, be extended to the UK branches of overseas (EEA and third country) banks (but not insurers). In essence employers must set up whistleblowing channels for the UK employees and communicate them to employees (in the handbook or equivalent); inform them of FCA and Prudential Regulation Authority whistleblowing services and have a whistleblowing champion at senior level.

The FCA says it has no current plans to offer disclosure incentives (in addition to protection), as is the case in the US.

European Union

EU Member States currently have a patchwork of different approaches to whistleblowing and, given its totalitarian history, some ambivalence on the subject. Only a few States have comprehensive and clear disclosure protection. Meanwhile, the European Commission (EC) recognises the value of whistleblowing as a safeguard of the public interest particularly against fraud generally, organised crime and corruption.

The EC has therefore recently completed an impact assessment and public consultation the objective of which is to ‘ensure overall effective whistleblower protection across the EU’. The Commission implementation plan following the assessment and consultation is expected in the fourth quarter of 2017.

Whistleblowing incentives

However, with awards for qualifying disclosures now up to USD30M (the record so far), if you are looking for a career as a whistleblower, there is no question. Head for the US.