The Public Interest Disclosure Act 1998 ('PIDA'): Legal implications and definitions

(Originally published in February 2002 by the BBA in their publication "Whistle While You Work: Key Issues for Implementing PIDA and Putting in Place a Whistleblowing Policy")

PIDA provides protection against victimisation or dismissal of workers who report malpractices in the workplace. In this section we give a general guide to the main provisions of PIDA, explaining how the protection is granted. We will deal with this by answering four questions:

· who is protected?

· what kind of disclosures are protected?

· has the individual followed the correct disclosure procedure? and

· how is the worker protected?

Who is protected?

PIDA uses the term “worker”. A “worker” includes any employee but goes far wider than this. It covers independent contractors providing services but not services provided by individuals through their own profession or business. It also covers agency workers, home workers and various persons engaged in the NHS.

What kind of disclosures are protected?

The disclosures which qualify for protection are those which, in the reasonable belief of the worker making the disclosure, tend to show one or more of:

· the commission of a criminal offence;

· the breach of a legal obligation;

· a miscarriage of justice;

· danger to the health and safety of any individual;

· damage to the environment;

· concealment of any of the above.

The disclosure will also qualify if the individual reasonably believes that any of these matters are likely to occur in the future. It should be noted that it is immaterial whether the relevant failure occurred in the United Kingdom or elsewhere. Therefore UK workers in multi-national companies are protected where senior management is based outside the United Kingdom.

What disclosure procedure should the worker follow to enable the worker to obtain protection?

PIDA sets out a number of different ways in which a qualifying disclosure may be made. These fall broadly into 4 categories:

· to the employer or responsible person;

· to a Government Minster;

· to a prescribed regulator;

· wider disclosures.

To the employer or responsible person

The only requirement for a qualifying disclosure to an employer is that the worker must make the disclosure in good faith. This means that it must be made honestly and will be protected even though it is made without due care or negligently.

PIDA does not require an employer to institute formal procedures for the making of disclosure by employees. However, it recognises that if an employer institutes such a procedure the worker is protected if he or she follows the set procedure.

To a Government Minister

This applies where the individual is employed in a Government appointed organisation, for instance an NHS Trust. The worker is required to make the disclosure in good faith.

To a prescribed regulator

The relevant prescribed regulators for these purposes include the Financial Services Authority, the Director General of Fair Trading, the Director of the Serious Fraud Office and the Secretary of State for Trade & Industry. The list of regulators is prescribed by statutory instrument. The list set out above is not complete but these are the most relevant for financial institutions.

The worker must make the disclosure in good faith; the worker should also have a reasonable belief that the relevant failure is within the regulators’ remit and that the information disclosed is substantially true.

Wider disclosures

There are two classifications of wider disclosure:

· those which relate to an exceptionally serious failure;

· other wider disclosures.

If the disclosure fulfils the requirements set out below, the range of people to whom disclosure may be made is very wide. It may include media, the Police, MPs or a non prescribed regulator. In order to fall within a protected wider disclosure, in the case of an exceptionally serious failure, the worker must act in good faith; have a reasonable belief that the information is substantially true; not make the disclosure for personal gain; and it must be reasonable in all the circumstances to make the disclosure.

In the case of other wider disclosures which are not exceptionally serious, the same requirements apply but in addition the worker must show that it is not appropriate to make the disclosure to his employer because there is a reasonable belief that the worker will be subjected to a detriment, if he makes the disclosure to him, or that there is risk of destruction of information if he makes the disclosure to him, or that there has been previous disclosure of substantially the same information to an employer or prescribed regulator.

How is the worker protected?

Once a disclosure has been made by a worker which complies with the conditions set out above, there are several important consequences.

First, any dismissal of the worker as a consequence of having made the disclosure will be deemed to be an unfair dismissal, allowing the worker to obtain compensation for unfair dismissal. It should be noted that there is no financial limit on the amount of compensation for unfair dismissal in circumstances where there has been a dismissal as a result of a protected disclosure.

Secondly, a worker has a right not to be subjected to a “detriment” by any act by his employer as a result of having made a protected disclosure. “Detriment” is very wide and means any act which puts the worker at a disadvantage. By way of example it would include refusing promotion, being disciplined, being singled out for relocation or any other act which puts the worker at a disadvantage. It may also go as far as including the threat of a detriment.

The third consequence relates to the question of confidentiality. Any clause in an agreement between a worker and an employer which prevents the worker from making a protected disclosure is of no effect. By making a potential disclosure a worker will not be in breach of any implied duty of confidentiality.

European countries and the European Convention on Human Rights

The UK is ahead of other European countries in enacting PIDA since most European countries have not enacted any specific whistleblowing legislation. Article 8 (the right to privacy) and Article 10 (freedom of expression) of the European Convention on Human Rights have some relevance in determining the position of an employee following the making of a disclosure. The European Court of Human Rights is generally reluctant to interfere with issues in the workplace. Issues of confidentiality or privacy will therefore be determined in EU countries in accordance with the local law of that country. Where an employee’s actions in making a disclosure have been proportionate, the courts of EU countries may also consider the issue in the context of the right of the worker to freedom of expression.

Conclusion

The Act gives considerable protection to workers in the UK and will cause a shift in attitudes by employers. In particular employers should be advised to avoid any attempt to suppress evidence of malpractice and to adopt a clear procedure for workers to report their knowledge or suspicions of any of those matters set out above which qualify for protection.

For further information please contact Tony Marks at [email protected] or on +44 (0)20 7367 2508 or Simon Jefferys at [email protected] or on +44 (0)20 7367 3421