Whistleblowing in the spotlight

The spotlight has fallen on whistleblowing in recent months, in part following the Chancellor's announcement of greater powers for the Financial Services Authority (FSA). The move was prompted by the fall in the HBOS share price which was caused by the circulation of false rumours. Alistair Darling has now said the FSA will be able to offer immunity from prosecution to those who blow the whistle on those responsible for market abuse.

According to research by accountancy firm Grant Thornton, the majority of whistleblowing employees in the UK will encounter difficulties as only 40% of UK businesses have measures in place to accommodate those wanting to blow the whistle on malpractice.

Although it is not necessary to have a whistleblowing policy, there are many benefits to be reaped from doing so, not least that you assist individuals raise concerns through the appropriate internal channels and can clampdown on improper conduct quickly and with the minimum of disruption.

When drafting a policy, you should keep the following key principles in mind:

1. As always, you should involve staff in the process of drafting the policy to help ensure it is fit for purpose. The consultation process will also provide an opportunity to reiterate the importance you attach to its implementation.
2. The policy should state the person(s) to whom concerns should be addressed. That person (or persons) should then receive full training on the whistleblowing legislation which applies in your industry. This will help reduce the risk of unfair dismissal and victimisation claims.
3. The policy structure should enable concerns to be raised with someone at a level or part of the organisation that bypasses the person or area in which a problem may exist.
4. You may wish to set out examples of the kind of conduct or actions that you feel are unacceptable and which you would expect employees to report.
5. A clear procedure for investigation should be set out as employees will want to know what action will be taken should they make a disclosure.
6. The policy should make it clear that an employee wishing to make a disclosure in confidence will be protected, but they should also be made aware that there may be circumstances where the matter cannot be resolved without their identity being revealed (such as where their evidence is required in court/employment tribunal).
7. You can provide for disciplinary penalties where malicious allegations are made – but great care needs to be taken to operate any such provision fairly and reasonably!!
8. Do not forget to promote the policy - the more aware staff are of the internal policy, the less likely they are to take their concerns outwith the organisation, for example to the media. It should also help deter people from wrongdoing as their chances of getting caught are increased if colleagues know how to report wrongdoing.
9. Keep it simple - all employee policies should be easy to understand and operate.
10. Finally, however good the written policy, it needs to work (and be seen to be working!) in practice. Staff need to see that it is being taken seriously and that any response is quick and effective.

For further advice and guidance on whistleblowing policy and practice, contact any member of our Employment Team.