A Shift in the UK’s Regulatory Position on Whistleblowing and Job Applicants
Introduction
The UK’s Serious Fraud Office (“SFO”) hires Nick Ephgrave as its new director to run the agency. Mr Ephgrave is the first non-lawyer to be seen heading the agency, drawing from a policing background. His recent speech at the Royal United Services Institute[1] was seen as hinting at possible shifts for the regulatory agency. The move to push incentivisation for whistleblowers and the use of covert tactics is amongst Ephgrave's plans to reform the investigative strategy of the SFO.[2] This article comments on the current status quo of whistleblowing laws within the UK jurisdiction and provides a preliminary view of the significance of the hire.
Overview
Referred to as ‘whistleblowing’, the act is essentially the making of ‘protected disclosures’ by workers against their company. These rights protect against dismissal, selection for redundancy, and being subjected to a detriment, such as the refusal of a pay increase, promotion, or other forms of victimization. The legal basis is found in the Employment Rights Act 1996 (“ERA”), as amended by the Public Interest Disclosure Act 1998. The objective is to provide a safe legal route for any workers and employees to inform against their companies regarding various types of malpractice. This exists separately from the employee’s normal duty of confidentiality.
Legal Policy Review in Retrospect
The SFO has been criticised for its ineffective prosecution of significant fraud cases, and the reforms introduced by Ephgrave are perceived as efforts to tackle these issues. The current regulatory system has three primary challenges: first, an unclear and inconsistent definition of whistleblowing; second, a prevalent fear of retaliation; and third, the absence of adequate measures to protect whistleblowers who face retaliation. In the past, an independent commission in 2013 attempted to call for reform and comment on recommendations, including issuing a code of practice to guide courts and tribunals adjudicating whistleblowing cases.[3] Other recommendations include simplifying the current legislation by outlining a non-exhaustive list of the categories of wrongdoing; and extending the scope of legislative protection to job applicants, partners (including LLP partners), volunteers, interns, and all categories of workers listed under the Equality Act 2010.
However, in response to the government, most of the recommendations envisaged both by the commission and the public were not meaningfully adopted to reflect the change in sentiment. The status quo now, as it is maintained, is somewhat lacking and unproductive. The only changes since the consultation period are a set of Code of Practice with no statutory force in 2015;[4] and a review in 2018 which ultimately ended on the basis that the ‘response rate from business was insufficient to reach conclusions.’[5] Since then, the campaign for new whistleblowing legislation has found itself in an uneasy position, with constant discourse among the legislative and academic spheres.
One of the notable changes that Ephgrave is proposing is to pay whistleblowers. It has been argued that this approach could lead to people making false or malicious allegations to receive a reward. Nonetheless, Ephgrave is of the opinion that the advantages of compensating whistleblowers outweigh the potential risks. He believes in the approach of incentivizing individuals to report instances of fraud and corruption. Ephgrave is also proposing to use more covert tactics in the SFO’s investigations. This could include things like wiretaps, surveillance, and undercover operations. Ephgrave believes that these tactics will help the SFO to gather more evidence and build stronger cases against fraudsters. The proposed SFO’s rework to whistleblowing and covert tactics will likely be met with resistance from some quarters. Ephgrave is resolved to continue with his changes, convinced that these will enhance the SFO's efficacy in combating fraud and corruption.
On job applicants
It is perhaps interesting to note that this area of law has been long contested for lagging behind employment reality. One example is its stance on the legal identity of job applicants. The ERA functions intending to protect workers from being dismissed or discriminated against for making a protected disclosure. Consequently, it logically follows that local authority applicants should also receive similar benefits under Part IVA of the ERA. However, rather surprisingly, in the recent case of Sullivan v Isle of Wight Council, [6] the court answered no to that question. The ratio of Sullivan followed that of the earlier decided case of Gilham v Ministry of Justice, [7] where the court concluded that extending the protection of Part IV of the ERA would violate Articles 10[8] and 14 rights[9]. The fundamental dispute here is the roles of the Courts and Parliament in giving effect to convention rights to ensure the law reflects societal changes. Adding to the complications, in the same judgment, the dicta by Lord Rodger also raised questions about the duties of courts in interpreting and giving effect to legislation in a way that ‘goes with the grain of the legislation.’[10] It follows that in the decided case, the arguments for making analogous provisions to guarantee the protection of rights, and the duties of the courts to interpret matters of public law and governance, are equally valid and well-founded.[11]
Conclusion
Borrowing investigative techniques from other regulatory authorities is not uncommon. However, caution must be given to the ripple effects that it has on the UK’s employment landscape and litigious trends in employment disputes. The particular focus on job applicants also represents a wider calling for a complete redraft of the ERA on whistleblowing. The reluctance of courts to interpret legislation as broadly as possible is a continuing debate on the comparative functions between the Judiciary and the Parliament. On a preliminary view, the status quo on whistleblowing is unresolved. The next few months moving forward are critical times for the SFO as they underlie the very success or failure of Ephgrave's proposed reforms.
Cases:
Gilham v Ministry of Justice [2019] UKSC 44.
Sullivan v Isle of Wight Council [2024] EAT 3.
Table of Legislation:
European Convention on Human Rights.
Employment Rights Act 1996.
Public Interest Disclosure Act 1998.
Bibliography:
Department for Business, Energy & Industrial Strategy and Department for Business and Trade, ‘Whistleblowing: Guidance and Code of Practice for Employers’ (GOV.UK, 20 March 2015) <https://www.gov.uk/government/publications/whistleblowing-guidance-and-code-of-practice-for-employers> accessed 19 February 2024.
Department for Business, Energy & Industrial Strategy and J Margot, ‘Government Agrees to Extend Legal Protections for Whistleblowers in Children’s Social Care Sector’ (GOV.UK, 8 November 2016) <https://www.gov.uk/government/news/government-agrees-to-extend-legal-protections-for-whistleblowers-in-childrens-social-care-sector> accessed 19 February 2024.
Department for Business, Innovation & Skills. ‘Whistleblowing Framework: Call for Evidence’ (GOV.UK, 12 July 2013) <https://www.gov.uk/government/calls-for-evidence/whistleblowing-framework-call-for-evidence> accessed 23 February 2024.
‘Director Ephgrave’ Speech at RUSI 13 February 2024’ (Serious Fraud Office, 13 February 2024) <https://www.sfo.gov.uk/2024/02/13/director-ephgrave-speech-at-rusi-13-february-2024/> accessed 15 February 2024.
D Nicholas, ‘Whistleblowing and Job Applicants’ (Law Gazette. 9 February 2024) <https://www.lawgazette.co.uk/legal-updates/whistleblowing-and-job-applicants/5118723.article> accessed 23 February 2024.
R Suzy, ‘UK SFO Director Pushes to Pay Whistleblowers and Use Covert Tactics’ (Financial Times, 13 February 2024) <https://www.ft.com/content/eea97af4-3041-4e8f-8f45-25777f530a56> accessed 15 February 2024.
[1] ‘Director Ephgrave’ Speech at RUSI 13 February 2024’ (Serious Fraud Office, 13 February 2024) <https://www.sfo.gov.uk/2024/02/13/director-ephgrave-speech-at-rusi-13-february-2024/> accessed 15 February 2024.
[2] Suzy Ring, ‘UK SFO Director Pushes to Pay Whistleblowers and Use Covert Tactics’ (Financial Times, 13 February 2024) <https://www.ft.com/content/eea97af4-3041-4e8f-8f45-25777f530a56> accessed 15 February 2024.
[3] Department for Business, Innovation & Skills. ‘Whistleblowing Framework: Call for Evidence’ (GOV.UK, 12 July 2013) <https://www.gov.uk/government/calls-for-evidence/whistleblowing-framework-call-for-evidence> accessed 23 February 2024.
[4] Department for Business, Energy & Industrial Strategy and Department for Business and Trade, ‘Whistleblowing: Guidance and Code of Practice for Employers’ (GOV.UK, 20 March 2015) <https://www.gov.uk/government/publications/whistleblowing-guidance-and-code-of-practice-for-employers> accessed 19 February 2024.
[5] Department for Business, Energy & Industrial Strategy and J Margot, ‘Government Agrees to Extend Legal Protections for Whistleblowers in Children’s Social Care Sector’ (GOV.UK, 8 November 2016) <https://www.gov.uk/government/news/government-agrees-to-extend-legal-protections-for-whistleblowers-in-childrens-social-care-sector> accessed 19 February 2024.
[6] [2024] EAT 3.
[7] [2019] UKSC 44.
[8] ECHR Article 10 protects your right to hold your own opinions.
[9] ECHR Article 14 requires that all of the rights and freedoms set out in the Human Rights Act must be protected and applied without discrimination.
[10] Gilham (n 6), [122].
[11] Nicholas Dobson, ‘Whistleblowing and Job Applicants’ (Law Gazette, 9 February 2024) <https://www.lawgazette.co.uk/legal-updates/whistleblowing-and-job-applicants/5118723.article> accessed 23 February 2024.
