The Public Interest Disclosure Act 1998 (the 'Act') came into force more than ten years ago in order to ensure that workers are not discouraged from blowing the whistle. New employment tribunal rules introduced this year widen the potential for alleged wrong-doing to come to the attention of Ofsted.
The Act protects employees and workers who have made a protected disclosure (blown the whistle) in the workplace about information concerning one of six relevant failures: (i) a criminal offence (ii) a risk to health and safety (iii) miscarriages of justice (iv) failure to comply with a legal obligation (v) damage to the environment (vi) concealment of information relating to any of those matters. This would certainly cover practices that put the safety or well-being of children at risk.
Q: What is the effect of the Act?
The Act is a powerful piece of employment rights legislation. A worker who claims they have been dismissed as a result of whistle blowing does not need the usual 12 months service in order to bring a claim for unfair (or constructive) dismissal. Also, any compensation awarded will be unlimited and not subject to the statutory cap for unfair dismissal claims (currently £65,300).
However, employees will only be protected if (a) they have a reasonable belief that the information disclosed relates to one of the relevant failures; (b) the disclosure is made to a prescribed person (either the employer or a third party defined under the Act); and (c) the disclosure is made in good faith.
Q: What extra powers have been given to employment tribunals by the new rules?
Prior to April 2010, the employment tribunals had no power to take action in respect of such allegations. However, on 6 April 2010, the Government introduced new employment tribunal rules - the Employment Tribunals (Constitution and Rules of Procedure Amendment) Regulations 2010. Under these regulations, tribunals have the power to forward the whole, or extracts, of the tribunal claim form (ET1) to Ofsted (or the relevant regulator for those working outside the early years sector) if they contain allegations of whistle blowing.
The ET1 has been amended so that the claimant can tick a box to give consent to the tribunal to pass details of the claim to the regulator. Where the claimant does not consent and has not ticked the box, the details of the claim will not be forwarded. The reasons for not ticking the box will, of course, vary. For example, a claimant who has notified the regulator directly will not need to tick the box.
Q: Is whistle blowing really that common?
Last year there were 1,700 employment claims involving whistle blowing allegations.
Q: Who decides whether to pass a whistle blowing allegation to Ofsted?
Where a claim involves whistle blowing and the claimant has given consent to refer the matter to a regulator, the claim form will be passed to a centralised team of administrators in the Employment Tribunal Service to process. Once the referral has been made, letters will be sent by the tribunal to the parties in the claim to confirm exactly what has been passed on and to whom.
Q: Will the changes affect the way in which claims are dealt with by the employment tribunal?
The Government's view is that the new rules will have no impact on employment tribunal litigation. However, the report of the regulator will inevitably find its way into the tribunal hearing bundle if it is available before the hearing. A report confirming malpractice or concealment by the employer will make it difficult for the tribunal to find that the worker has not suffered a detriment. Conversely, a report that suggests the complaint was ill-founded may make it difficult for the claimant to convince the tribunal that the disclosure was made in good faith.
The tribunal may well find that the whistle blowing claim was malicious or vexatious, and dismiss it. And if the consent box has not been ticked and no individual referral to the regulator has been made, the employer may find it easier to argue 'bad faith' on the part of the claimant.
Q: Will the changes increase the likelihood that matters settle?
Prior to 6 April 2010, claimants sometimes added whistle blowing claims to claim forms as a means of increasing awards of compensation beyond the statutory cap or defeating the one-year rule in unfair dismissal claims.
Now there is a further risk that claimants will use the new rules to negotiate higher settlements with employers who are reluctant to have their business affairs investigated by a regulatory body. Maybe there is a risk to the employer that other matters will be unearthed during the investigation, or that the regulator may target them for future investigations. There is also a risk to the employer's reputation. More employers may be inclined to settle cases quickly, often before the claim is issued in the tribunal, so that such matters may escape investigation.
A further concern for employers is that allegations will be in the hands of the regulators before the tribunal has tested whether the allegation was made in good faith or if there was a genuine belief in its truth. Furthermore, even where the claim is dismissed or struck out, the regulators are no doubt at liberty to continue with the investigation.
Q: What action should employers take?
It is essential for employers to have a robust whistle blowing procedure in place and to thoroughly investigate allegations so that there is no doubt in the whistle blower's mind that their complaints are being taken seriously. This may keep the worker from feeling compelled to report matters to the regulators. Employers will have to balance the time and costs of investigating spurious allegations with the risk of being investigated by Ofsted, which could result in a negative report or unearth matters that the employer was not even aware of.
Rob Collier is a partner at Veale Wasbrough Vizards and heads the Early Years Team (0117 3145472 or rcollier@vwv.co.uk
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