How should employers prepare themselves for the shift in the system as the Office of the Whistleblower Bill enters its second reading? Francesca Titus explains.
Whistleblowing may be a hot issue for the government and regulatory agencies, but it isn’t on all business radars.
The whistleblowing system is likely to undergo significant changes this year. In addition, the challenges and complexities facing businesses of all sizes are expected to increase.
The Office of the Whistleblower Bill, which is scheduled for its second reading, will be examined by policymakers to determine whether it’s possible to reward whistleblowers financially.
What is a Whistleblower?
Whistleblowing today is when someone reports wrongdoings at work which affect others, and it is done in the public’s interest. This is legally known as “making disclosures in the public interest”.
Whistleblowing laws allow “qualifying disclosures”, which include criminal allegations such as fraud, health-and-safety breaches, environmental damage and breach of legal obligations.
Most people are protected by law if they disclose protected information and receive whistleblower protection.
The disclosure qualifies as a protected disclosure if it is reported to the appropriate person or authority.
The list of people and organizations that are to be contacted is long, ranging from Bank of England and HMRC, the Financial Conduct Authority and Children’s Commissioner, up to the Environment Agency and Environment Agency. The full list can be found on the government’s website.
Financial incentives
The enforcement agencies are actively looking for whistleblowers. In fact, both the Competition and Markets Authority and HMRC have the capability to pay whistleblowers.
The FCA offers a whistleblowing hotline, and recently showed support for financial rewards to encourage whistleblowers.
The Serious Fraud Office stated last year that it was only interested in hearing about corporate self-reporting and whistleblowers. It did not want to hear from individuals who had been victims of financial crimes.
Nick Ephgrave has described his vision for rewarding whistleblowers.
He spoke about the success of whistleblowing in the United States of America, and he sees whistleblowers in the SFO’s fight against crime as an effective weapon.
The Office of the Whistleblower Act
After many failed attempts, a Private Members’ Bill is now progressing through the House of Commons on whistleblowing.
The main objectives of the Office of the Whistleblower are to create an independent Office of the Whistleblower, which will protect whistleblowers. It also aims to implement standards in the management of cases involving whistleblowing.
The Bill was introduced because whistleblowers in the UK are currently governed by employment law.
The whistleblower’s remedy is usually a redress in an employment tribunal. This tribunal will look at the loss of income and job-related losses that the individual has experienced, but not necessarily the reputational and social damage they have suffered as a consequence of speaking up.
The Bill aims to rectify this. A report by the All-Party Parliamentary Group on Whistleblowing concluded that the current law “failed” to protect whistleblowers and the public from harm.
The creation of the Office will change how organisations handle whistleblowers, who may prefer to report their cases there instead of internally.
Many organisations must now ensure that they have robust protections within their organisation for those who wish to disclose information. They will also need to review existing policies and procedures.
The Bill covers nine types of protected disclosures. The protected disclosures can range from a criminal offense or a regulatory violation to mismanagement or abuse of public funds.
The Bill defines a ‘whistleblower as someone who has made, made or is planning to make an protected disclosure, or is perceived by relevant persons to have made, made or be making a protected revelation’.
The Bill proposes to allow protected disclosures to be made to a “relevant person” such as an employer, regulator, or public authority, but also to the OWB.
The Bill’s second reading will be held in July of this year.
Inability to prevent offenses
By the autumn of this year, three pieces legislation will be in place to hold companies accountable if they profit off corporate crimes committed by their employees and third parties.
The failure to prevent bribery, failure to stop tax evasion and fraud are already in the law books.
The law enforcement agencies are interested in investigating whistleblowers for these types of crimes that occur at the core of an organisation.
What can business prepare for?
Although there is no legislation that requires all companies to have whistleblowing policies (although there are rules specific for listed companies and companies in the financial service sector), it’s best practice to develop and implement a robust policy, with clear procedures and publicising it widely.
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