Policy Officer Laura Fatah represented Protect as a panellist at online event ‘To blow the whistle or not? A symposium on complicity and compliance in economic and social wrongdoing’ hosted by the University of York scholars James Killen, Zoë Porter, and whistleblower Ian Foxley. The event showcased the latest research in the field of whistleblowing and provided a platform to discuss ideas on whistleblower law reform.

Research findings were presented by James Killen and Ian Foxley, with insightful presentations from Kevin Hollinrake MP, Prof Emanuela Ceva and Dr Lorenzo Pasculli.

A key topic of debate for the panel –  which included Baroness Kramer, Prof John Blenkinsopp, Prof Emanuela Ceva, Prof Marianna Fotaki, Prof Kate Kenny, Dr Lorenzo Pasculli, Prof Iain Munro and Laura Fatah – was the Office of the Whistleblower Bill, put forward by Baroness Kramer as a private members bill in the House of Lords. Protect welcome Baroness Kramer’s expression of support for reform of the Public Interest Disclosure Act 1998; in addition to her Office for the Whistleblower bill.

Many agreed that the bill presented by Baroness Kramer was a welcome initiation bringing light on the need for legal reform. Panelists expressed a view that whistleblowers deserve better outcomes, and that the law can, and must, be improved to support this goal. Key issues raised in relation to the Office of the Whistleblower were its source of funding, how independence from government could be established and maintained, and the practicalities of which department such a body would be housed in.

Contributors spoke of the critical need for a cultural shift in how whistleblowers are perceived,  responded to, and treated. Prof John Blenkinsopp spoke of the ‘PR’ responses that companies so often have to whistleblowing situations, where an individual who speaks up may be hounded out of a career; when the easier, responsible, and far more effective approach would be for the company to thank the individual and rationally address the issue which they have raised.

Dr Lorenzo Pasculli spoke of the conflicting interests of the public versus those of corporations. Corporations are commercial entities which seek to make a profit above all else; whereas public interests include societal values and public safety. Combining Blenkinsopp’s and Pasculli’s findings, it is apparent that for corporations and companies to reach the point where they voluntarily embrace whistleblowing the commercial benefits of doing so must be clear, in addition to the potential risks of ignoring whistleblowers. Companies who do admit fault and seek to improve will fare far better in terms of consumer loyalty than those who deny any wrongdoing and instead seek to crush and attack whistleblowers.

This speaks to Prof Kate Kenny’s point that it is necessary to look beyond the law and view these issues in a wider economic and ideological context.  For laws to be more than merely ‘cardboard shields’, the bodies which enforce them must be properly funded and effectively overseen. Kenny illustrates that regulatory weakness is not inevitable: “History shows us that when regulatory authorities are well funded and have political support to effectively sanction (such as with the Savings and Loan crisis of the 1980s and 1990s in the US which resulted in over 800 prosecutions) they can become a true force for change and present a genuine deterrent to future wrongdoers.”

Protect are keen to continue collaborating with all contributors who participated in the event, to identify how improvements to the landscape for whistleblowers might best be achieved; to seek solutions and learn from examples of best practice internationally.

Watch the symposium


The Financial Regulators Complaints Commissioner (an independent body responsible for reviewing the conduct of financial regulators in the UK) this month published a number of recommendations for regulator the Financial Conduct Authority (FCA), in response to a whistleblower’s complaint about the FCA’s approach to their disclosure and how they had been treated.

Protect welcome the Commissioner’s recommendations as they mirror our own recommendations of how regulators should handle concerns raised by whistleblowers, as specified in our Better Regulators Guide and ongoing Legal Reform Campaign. Handling whistleblowers in an effective and supportive manner is essential for all regulatory bodies to properly deliver their public function, maintain their reputation and encourage further disclosures.

Protect published its Better Regulators Guide following a series of successful round tables with regulators and professional bodies to share and learn best practice with the overall aim of achieving a sea change in whistleblowing.

If whistleblowers are repeatedly mishandled the perception of trust will be damaged, leading to lower engagement from concerned workers and fewer sources of intelligence for regulators to act upon.

The Commissioner made the following observations:

  • I do consider that the fact that the FCA neither asked you any follow-up questions, nor engaged with you on this issue was a mistake

After receiving a disclosure, the whistleblower should firstly be asked if they wish to receive feedback. Whistleblowers should be provided with the opportunity to fully clarify the information given to the regulator for assurance that their concern has been understood and will be taken seriously.

Principle Three of Protect’s Better Regulators Guide states:

Offering the whistleblower an opportunity to comment on the regulator’s findings before publication may be appropriate. This may allow the whistleblower to identify any errors or issues which have not been raised in the report and ask further questions.

 

  • The FCA [should] consider whether 12-week updates are sufficient in all whistleblowing cases.

Whistleblowers should be provided with a time frame if an investigation is to take place following their disclosure. This is useful as it prevents dispute, uncertainty and alleviates anxiety for the whistleblower. Regardless of the length of time of the investigation or whether follow-up action has been taken, regulators should attempt to regularly provide whistleblowers with detailed updates .

Principle Three of Protect’s Better Regulators Guide states:

Ideally, a disclosure should be acknowledged (within 24 hours if possible). [It is best] if the regulator and the whistleblower can agree on a frequency of contact, e.g. once a month. This will be a key part of managing the relationship if the concerns are fed into an investigation that takes a long time to conclude. The whistleblower is less likely to approach another body, or even the media if they know when to expect a response.

Protect’s draft Whistleblowing Bill, as part of our Legal Reform Campaign includes a new clause, “Standards for Regulators”, which obligates feedback following a disclosure to be given within 3 months, or 6 months in duly justified cases.

 

  • Confidentiality has to be respected; but … whistleblowers – and the public more widely – need to have enough information to be assured that the regulator is doing its job.

Regulators should provide as much detail as possible to whistleblowers about the outcome of an investigation, balancing the interests of the whistleblower with the confidentiality of the accused. As the Commissioner commented, “the FCA needs to be as bold as it can be in disclosing information…to provide meaningful reassurance”. By providing an outcome report of the concerns, public confidence is instilled in the regulator, encouraging others to raise public interest concerns with the regulator in future.

As referenced in Principle Two of Protect’s Better Regulators Guide:

Confidentiality is the primary means by which a regulator can protect whistleblowers … breach of confidentiality could damage the reputation of a regulator or professional body … putting others off from coming forward in the future.

Principle Three of the Better Regulators Guide states:

Regulators and professional bodies should look for any information that can be provided to the whistleblower to reassure them and be open where there are restrictions (e.g. confidentiality or market sensitive then communicate this to the whistleblower) or where no further investigation is required.

Later in the year we intend to hold a webinar event for regulators covering these issues, more details on the event will follow soon.

It is crucial for regulators to follow good practice when whistleblowers approach them to ensure whistleblowers feel heard and that their concerns matter. We are pleased that the Commissioner’s recommendations were taken on board by the FCA and hope they are applied not just by the FCA but all regulators going forward.

By Nneka Egbuji

If you are a regulator or professional body who would like to know more about opportunities to engage with Protect and the Better Regulators Campaign, or find out more about our campaign for legal reform, please email Policy Officer Laura Fatah laura@protect-advice.org.uk


Covid-19 is exposing good and bad practice when it comes to sectors who put employee welfare first and foremost. Unsurprisingly, retail is not leading the way, as highlighted by the quite shocking reports of working conditions of Boohoo suppliers in Leicester.

As the UK’s whistleblowing charity, we advise workers from all sectors. At the start of the pandemic our Advice Line was getting calls largely from health and care workers over issues such as lack of PPE, and carers being forced to go into work when unwell, but the majority of our calls have been over furlough fraud from the retail and hospitality sector – industries we did not have much engagement with pre-Covid-19.  The two sectors have made up 21% of 510 calls we have received regarding Covid-19 related concerns. [1]

Labour Behind the Label, who campaign for workers’ rights in the clothing industry, in its recent  report Boo-hoo and Covid-29, People behind the profit  say they too have received reports from workers alleging furlough fraud, as well as low wages, modern slavery, illegal opening of factories during lockdown and illegal denial of wages and benefits in Boohoo and other e-retailers. Worryingly, the report also states: ‘We have also heard of workers – positive for COVID-19 – being required to work throughout their sickness in order to fulfil orders…..  We have heard of several incidents, whereby workers who had tested positive were told to come into work, and of managers telling workers not to tell anyone else about positive cases.’

Big retail companies with healthy profit margins are in a position where they should be setting standards in terms of best practice, including whistleblowing.  This would mean insisting on having whistleblowing arrangements. So why isn’t it happening?

Good whistleblowing arrangements should apply not just to the employer, but also to workers in their supply chains.  If supply chain workers are comfortable to raise concerns, companies will benefit from being better informed about risks within the chain itself.

Responding to concerns raised in the supply chain e.g. reporting breaches of minimum wages, and modern slavery incidents is difficult.  Organisations will have to weigh up discussing the issues with the supplier/s or (as in the case of modern slavery incident) reporting it to an external body such as the police.  A particular difficulty lies in how to protect an individual whistleblower who raises concerns with them. A manufacturer who has received concerns from a supply worker who is not a direct employee, may find they are limited in what they can do in response to a worker being victimised for speaking up. The response we would encourage is for the large retailer to no longer work with suppliers who they credibly believe bend the rules. But brand, reputation and even profit aside, retailers need to ask themselves if it is morally acceptable on a basic human rights issue for retail manufacturers to turn a blind eye? With the public becoming so aware of basic human rights issues, as seen with #MeToo, BLM, we should all care about the real cost of fast fashion.

Encouragingly, there are some good examples of best practice in the area of supply chains. Shift is a non-profit centre for business and human rights practice, that works in collaboration with the Global Social Compliance Programme (GSCP), a business-driven program for the continuous improvement of labour and environmental conditions in global supply chains.

In its report, From Audit to Innovation: Advancing Human Rights in Global Supply Chains, Shift identifies many best practice examples as below:

Both H&M and Marks & Spencer are working with suppliers in China and Bangladesh in order to develop their management systems to track and analyse employee working hours – which can then provide the data for further analysis, operational efficiencies, and reductions in those working hours to acceptable standards

One H&M manager describing most audit processes as a ‘game of hide and seek’, during which suppliers did everything possible to hide problems from the company. The company had grown quite discouraged by the results of its audit program: while audits were catching the small infractions, they were missing the bigger picture issues; the program was failing to produce improvements over time; and its supplier base seemed uncommitted to making those improvements. Driven by a desire to create greater transparency, ownership and commitment from its suppliers, H&M’s new system is based on a philosophy of continuous improvement. The company conducts fewer audits, but the audit of each supplier is much more in-depth, lasting 6 days. The end result of each audit is a jointly developed 18-24 month workplan, based on shared prioritization of issues for improvement. Rather than conducting periodic follow-up audits, H&M follows up on progress made on the workplan. Suppliers have reported to H&M that ‘they now feel listened to, rather than just accused’, and that they now feel they ‘get credit for what they are getting right, not just what they are doing wrong.

Labour Behind the Label want the Government to ‘recognise that it is not only unscrupulous suppliers but also the lack of regulation of pricing and purchasing practices.’

Protect are calling on the Government to press ahead with a new Single Enforcement Body (SEB). The Government have committed to a (SEB) to protect worker’s employment rights with the powers to enforce ‘the minimum wage, labour exploitation and modern slavery, along with holiday payments for vulnerable workers and safeguarding agency workers’ which was announced with a consultation last year, which Protect responded to. Currently, enforcement is piecemeal and can be ineffective, meaning that neither workers nor compliant employers are well served.

The SEB should be made a ‘prescribed person’, as many regulators already are, including the Care Quality Commission, the Financial Conduct Authority, and the National Audit Office among many others.[2] This would enable those raising whistleblowing concerns to be protected from unfair dismissal for approaching the SEB. This measure would help to increase workers’ confidence in raising concerns by giving them enhanced legal protection.

Legislation has not been introduced so far, but the SEB is part of as part of the Government’s Good Work Plan. Protect will continue to push for the SEB to be brought in.

[1] The data ran from start of lockdown 23rd March 2020-3th July 2020.

[2] 43F of the Employment Rights Act 1996.

By Andrew Pepper-Parsons


In March of this year, the Chancellor of the Exchequer Rishi Sunak announced the creation of the Coronavirus Job Retention Scheme (‘CJRS’). Protect’s Advice Line rapidly saw a spike in reports of “furlough fraud”, and, at the time of writing, handling nearly 300 calls with HMRC receiving 4,500 reports of fraud from whistleblowers[1].

This level of activity has thrown the question of rewards schemes for whistleblowers back into the arena, with some advocating that where a whistleblower speaks up about furlough fraud (or any public interest wrongdoing), they ought to receive a financial reward.[2]

The U.S. Securities and Exchange Commission (the SEC), an independent agency of the US Federal government operates such a scheme, under the Dodd-Frank Act 2010. However, whilst whistleblower rewards schemes may seem like an attractive proposition, the Dodd-Frank model is unworkable in most sectors, and inconsistent with the public interest served by the whistleblower’s disclosure. Indeed, for most whistleblowers, rewards are the last thing on their mind when they take the decision to speak up.[3]

The Dodd-Frank Model used by the SEC

 The SEC scheme is only available to tiny percentage of those who speak up.

 Only whistleblowers who provide:

  • Original information
  • Leading to successful enforcement action
  • Of over $1 million

May apply for an award of 10-30% of the sanction imposed.[4]

The reasoning behind this reward scheme is almost entirely a small number of large payouts; proponents point to the large payouts for big scandals as evidence of success.[5] Since 2011, the SEC recovered $2 billion because of whistleblower tips and, in 2019, it awarded approximately $60 million to eight individuals.[6]

However, it does not follow that reward schemes are a sensible legislative proposal simply because the SEC scheme sometimes results in headline- grabbing figures. Kevin LaCroix, an attorney and Executive Vice President of RT ProExec, has specifically highlighted the huge disconnection between the number of reports (5,212 during FY 2019) to the SEC and the small number of awards (eight during FY 2019). LaCroix goes on to say, ‘When I look at the fact that of the total number of reports the agency has received 99.98 percent have not resulted in awards makes me wonder whether this program is really worth it?’[7] This view is supported by  the FCA’s research into US financial incentives. The FCA concluded, ‘ Incentives in the US benefit only the small number whose information leads directly to successful enforcement action resulting in the imposition of fines (from which the incentives are paid). They provide nothing for the vast majority of whistleblowers. There is as yet no empirical evidence of incentives leading to an increase in the number or quality of disclosures received by the regulators’.[8]

The Size of the Catch

The whistleblowers who call Protect’s Advice Line are rarely raising concerns about fraud or financial mismanagement of such magnitude; but they often raise concerns about fraud which significantly impacts the public interest. Key public and voluntary organisations are often run on a shoestring, yet provide invaluable support for the communities they serve. For them, the difference between success and failure can be a just few thousand pounds. How can it be right that whistleblowers who raise valid and genuine concerns about fraud, which do not fall within the remit of the SEC reward scheme, be left disregarded and unacknowledged?

Whistleblowing of any concern can have immeasurable and difficult consequences for the individual. This is important, as if the reporting of less severe misconduct is made less attractive, there is a risk that disclosures could be delayed, manipulated or artificially inflated.[9]

Non-Financial Sectors left out in the cold

Little attention has been paid to how reward schemes could operate in any other sector than the financial. Blowing the whistle on financial wrongdoing often exposes a pool of money; from which a ’finder’s fee’ reward can be calculated. However, reporting wrongdoing in other sectors does not often generate funding, and does not provide a comparable source for rewards.

For example, a doctor who raises concerns about patient safety cannot point to any recovered sum of money from which they should be rewarded. How then is a reward to be calculated? The sacrifices of whistleblowers in non-financial sectors are just as real, and it is difficult to justify a scheme that excludes the hospital whistleblower, or the teacher who reports a safeguarding incident, or the factory worker who raises unsafe food practices.

 Awards vs. Compensation

Rewards schemes are not compensatory, as the reward is not based on any detriment suffered by the whistleblower. In the UK, detriment is addressed through the Employment Tribunal, where compensatory payments to the whistleblower can be uncapped.  If rewards schemes were compensatory this would create a dual-system and an unsatisfactory state of confusion. Efforts should be made to improve the efficiency and robustness of the Tribunal system, rather than focusing on ‘quick-fix’ solutions.

Under the Dodd-Frank Model, rewards are calculated based on the financial value of the information, not the damage the whistleblower suffers; or the value which the information has to the public interest. As such, these schemes do not put the whistleblower or the public at the heart of the process. Whistleblower Wendy Addison, who offers consultation and training to organisations, aptly describes this as treating whistleblowers as a “hired gun for the SEC”.[10]

Whistleblower reward schemes maybe appealing because for complex financial cases there is the opportunity of both their legal costs being paid and the whistleblower being adequately compensated.  Making it more attractive for lawyers to assist whistleblowers is positive, given the disparity of arms that claimants face in tribunal.  As costs are rarely awarded against the losing party in employment tribunals, whistleblowers may succeed in tribunal, but find their compensation swallowed up in legal fees.  Yet there are many sectors where the wrongdoing exposed by whistleblowers carries no financial fine (e.g. the Oxfam sexual exploitation whistleblowing scandal) where fines are not appropriate, therefore awards scheme have little value.  A better response to a lack of support for whistleblowers within the legal process is to provide them with access to funding, for example through legal aid.[11]

A fundamental principle of whistleblowing is upholding the public interest in every workplace, in every sector. The facilitation of rewards under the Dodd-Frank model does not reflect the value of the public interest, nor the harm suffered by the whistleblower – only the size of the catch they bring in.

Whistleblowers tell us the real reason they speak up is not driven by a cash reward incentive, but because it is the right thing to do and we should all be grateful this is the case.

By Protect Adviser Kyran Kanda, July 2020

[1] https://www.itv.com/news/2020-07-01/exclusive-4500-whistleblower-complaints-as-bosses-force-furloughed-staff-to-work

[2] https://challenge.globallegalhackathon.com/gallery/5ec8290d136ce600448b0dc4

[3] P.g.5 point 12, Financial Incentives for Whistleblowers, July 2014

[4] https://www.sec.gov/whistleblower

[5] https://fcpablog.com/2015/12/03/gordon-schnell-yes-we-need-whistleblower-rewards/#comment-1286

[6] A list of recent rewards can be found here https://www.sec.gov/news/pressreleases.

[7] https://www.dandodiary.com/2019/11/articles/whistleblowers/sec-whistleblower-reports-and-awards-continue-at-elevated-levels/

[8] https://www.fca.org.uk/publication/financial-incentives-for-whistleblowers.pdf

[9] https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2822313.

[10] http://www.speakout-speakup.org/blog/whistleblowers-need-radical-justice-not-radical-incentives/

[11] See Protect’s legal reform campaign: https://protect-advice.org.uk/campaign-for-a-new-whistleblowing-bill/


Protect with the support of Slater & Gordon Lawyers has launched Silence in the City 2 (SITC2 2020), a new report examining whether whistleblowing culture within financial services organisations has improved following the introduction of Whistleblowing Rules by the Financial Conduct Authority (FCA). This blog will examine what employers can learn from the research.

Background: Whistleblowing Rules in the Financial Services

Since 7 March 2016, FCA has required regulated organisations to take a number of steps to develop their whistleblowing arrangements. SYSC 18 (also known as “the Whistleblowing Rules”), sets out minimum requirements for firms in a number of areas including the form internal whistleblowing arrangements should take as well as providing non-binding guidance to aide in the implementation of the rules. This research examined whether rules have made it easier for whistleblowers to raise concerns, improved the response to the wrongdoing raised and whether whistleblowers are treated better in the process.

For background here is a summary of the relevant rules for this research:

  • The appointment of a whistleblowers’ champion to oversee the effectiveness of the whistleblowing arrangements (SYSC 18.4.4)
  • Introduction of internal whistleblowing arrangements to handle all types of reportable concerns
  • A requirement to provide training for all staff and for managers receiving concerns (SYSC 18.3)
  • Communication to UK-based employees about the FCA and PRA whistleblowing services (SYSC 18.3.6)

Protect and Slater & Gordon conducted Silence in the City in 2012 (SITC 2012) to uncover the true experience of whistleblowing in the financial services sector. Our new Silence in the City 2 report (SITC2 2020) examines the lived experience of 352 whistleblowers who approached Protect for advice between January 2017-2019. SITC2 2020 directly compares these findings to those of the SITC 2012 report and examines whether whistleblowing culture has improved post implementation of the Whistleblowing rules.

Culture Change

The research has shown some real culture change in the sector which includes:

  • Greater trust and use of internal whistleblowing arrangements: Use of internal arrangements (including disclosures to line managers, Whistleblowing Champion, Directors, Chief Executive) has increased by 15% since our research in 2012, jumping from 78% (from SITC 2012) to 93% (SITC 2 2020).
  • Increased awareness of internal arrangements: 93% of whistleblowers were aware of their employer’s whistleblowing policy and 78% said they had either used the policy or were considering using it. This may be indicative of training that firms are required to provide to staff on how and where to blow the whistle (SYSC)
  • Whistleblowers are more persistent in raising their concerns: We saw a 10% increase in individuals trying to raise their concerns a second time if needed.[1]

Another aspect of the research that should give firms pause for thought is the rise in discrimination and harassment concerns being raised through the whistleblowing channels. 19% of the disclosures made related to legal or regulatory breaches and discrimination or harassment issues which made up 5% of the concerns raised, in 2012 discrimination and harassment did not feature at all in the research. We believe this could be a result of the increased profile such issues now have thanks to the #MeToo movement and steps that the FCA has taken in treating sexual harassment as a conduct issue under the SMCR regime[2]. It also reflects a situation where it might be more effective to use whistleblowing arrangements rather than grievances where the whistleblower is either a witness to the behavior or if they are victim but part of a wider cultural problem in their organisation.

The Gap between policy and practice

While SITC2 2020 demonstrates that firms have taken steps to put in place whistleblowing arrangements, the findings clearly show the void between what is written in the policy and the response from the firm.

  • 7 out of 10 whistleblowers experienced some form of victimisation: this includes bullying and harassment from managers or co-workers, suspension, dismissal or resignation
  • Most employers took no action to resolve victimisation: the research also shows that when the victimisation was reported to the employer, over half took no action (58%) and almost a quarter rejected the complaint (24%)
  • A third of whistleblowing concerns raised were ignored: in 33% of cases, the whistleblowers stated that the wrongdoing they raised was ignored by the employer.

SITC2 2020 mirrors findings found in the US where a recent study by George Washington University and the University of Utah examined nearly two million whistleblower reports from internal whistleblower systems. Report author Kyle Welch said, “If you have more reports, it is a good sign. It is very easy to lower reports, just change the hotline phone number and don’t tell anyone. The question you should ask when you have more reports is: Do we have enough resources to investigate the volume of information we are getting?”  Welch also advises companies to “benchmark your system for the volume of reports you receive. The only way to know if you are receiving enough reports is to get a benchmark study to see how similar firms in your industry did over the same time.”[3]

By failing to properly engage with the victimisation of whistleblowers, some of the positive cultural change we have seen around the use and trust of internal whistleblowing arrangements has been greatly undermined.

Conclusion – 4 things firms should consider doing

The advent of the whistleblowing rules has brought about positive change in the financial services sector, but firms have a long way to go to meet best practice in handling whistleblowers. It is important that senior leaders, championing a firm’s whistleblowing arrangements, put themselves in the shoes of a whistleblower and think about the protection and support they would want as a whistleblower. As firms move to bridging the gap between policy and practice, there are for things that they can consider doing:

  • Treat complaints of victimisation seriously and consistently: adopt a zero-tolerance approach to the victimisation of whistleblowers and ensure that complaints are dealt with through a consistent process. In larger organisations, you may want to address all complaints of victimisation through one central function (e.g. the whistleblowing team or HR) to ensure consistency. Make sure managers across your organisation, HR, the Whistleblowing champions are trained and are aware of what constitutes victimisation.
  • Discrimination and harassment issues maybe raised via whistleblowing arrangements: HR departments and managers need to be aware that whistleblowers appear to be using whistleblowing arrangements to raise discrimination and harassment issues so they must be able to spot when there is a cultural problem within a department or where there is pattern of behavior from one particular individual.
  • Benchmark and review: following the Whistleblowing Rules will not ensure firms have effective whistleblowing arrangements, review and benchmarking of arrangements will show gaps in way whistleblowers are dealt with in the whistleblowing system. Protect has developed a Benchmark framework to help your organisation reach best practice when it comes to whistleblowing standards.
  • Being proactive in communicating to whistleblowers: Whistleblowers feel ignored, communicate and seek feedback from whistleblowers telling them what action has been taken on the concerns and asking they feel victimised for raising the concerns. Being proactive in communicating with whistleblowers is key.

 

 

[1] 20% raised their concerns a second time in SITC1 while it stands at 30% in SITC2.

[2] https://www.parliament.uk/documents/commons-committees/women-and-equalities/Correspondence/180928-FCA.pdf

[3] https://www.forbes.com/sites/josephbrazel/2020/06/11/study-provides-new-insights-about-internal-whistleblowing/


Local government procurement is big business, and in England alone costs the taxpayer £55 billion a year[1]. Even more staggering is the amount lost to fraud each year which is estimated to be between £275 million and £2.75 billion[2].

A recent report by the Ministry of Housing, Communities & Local Government Department, in line with the UK Anti-Corruption Strategy 2017 – 2022, highlights the huge impact whistleblowers have in identifying and deterring fraud, stating: The majority of cases of fraud and corruption relating to procurement come to light as a result of someone making a report or raising a concern”.

Fraud in public services isn’t just about money, it can mean that public safety is put at risk; or lead to the closure of vital services – when there simply isn’t enough funding to go around. Last year, 5% of the calls for advice received by Protect were in relation to concerns about local government.

The overarching recommendation from the report is that organisations should develop a compliant culture where whistleblowing is supported.

John Penrose MP states in the report foreword:

“The only constants are the need to bake in a counter fraud and corruption culture from top to bottom of every Council, so whistleblowers know they will be supported rather than victimised, and wrongdoers know there’s a good chance they’ll be caught and punished too.”

However, despite recognising that more must be done to support and protect those who raise concerns, the report is silent on what reforms to the Public Interest Disclosure Act 1998 could be considered to advance this objective.   The report states: “The Government continues to listen to stakeholders and will review the recent reforms once there is sufficient evidence of their impact.”

Protect say it will be difficult to gauge impact, when the recent reforms aren’t even enforced and Protect’s Policy Officer Laura Fatah said, “Victimisation of whistleblowers is rife, and individuals who speak up in the public interest must know they can rely on the law to protect them in times of need. Protect will continue to urge the government to reform the current legislation, highlighting the cracks that whistleblowers are falling through, and the desperate need for mandatory standards to be established for both employers and regulators.”

See full details of Protect’s legal reform campaign.

The report presents some interesting findings in relation to whistleblowing:

  • Of the 86 councils responding to the survey as part of this review, 23% reported having experienced cases of fraud and corruption within procurement in the 2017-2018 financial year
  • Whistleblowing and tip-offs: are often the source of procurement related cases. More needs to be done to encourage individuals to come forward, including from the supplier side
  • Many cases of fraud and corruption that impact procurement are discovered as a result of a whistle blower coming forward or someone raising a concern. If whistleblowing arrangements were strengthened across the board, this could encourage more individuals and business to come forward to raise their concerns
  • More needs to be done across the board to encourage individuals to come forward and to protect them from harm afterwards. Concerns may be raised by staff members, suppliers, or other individuals. To encourage reporting by these individuals, the channels available need to be accessible and both confidential and perceived to be confidential

The report found council’s particularly vulnerable to fraud and highlighted the following: 

  • Suppliers are often relied upon to provide progress reports and data to support their delivery against KPIs, sometimes self-certifying that results have been achieved and payment is due. Without appropriate oversight and monitoring by councils, this can be abused
  • The impact of deterrence needs to be taken into account, as without the threat of punitive action, council’s risk being perceived as a soft target
  • Often there is no incentive to take legal or civil action if funds have been recovered. This approach may present councils as a ‘soft touch’ where the worst sanctions is the return of funds by a supplier

If you are a local authority seeking to improve your whistleblowing arrangements and reduce the risk of fraud, you can call our business team for a confidential consultation on 020 31172520, pressing option 2, or via email business@protect-advice.org.uk

[1] National Procurement Strategy for Local Government in England 2018, LGA, page 5 https://www.local.gov.uk/national-procurement-strategy-local-government-england-2018

[2] Cabinet Office Cross-Government Fraud Landscape Annual Report 2018 https://www.gov.uk/government/publications/cross-government-fraud-landscape-annual-report-2018

 

 


With World Whistleblowers Day  here (Tuesday, 23 June), the Business Support team at Protect has been reflecting on the work of employers who are commendably continuing to strive to achieve a strong and positive speak-up culture, and how those with best practice policies could use this national focus day to signpost employees to their arrangements.

Originally created by a group of NGOs working as part of the South East Europe Coalition on Whistleblower Protection in 2019, World Whistleblowers Day was created to raise global public awareness in combating corruption.

The day is about the important role of whistleblowers in combating corruption and maintaining national security.

In these times of flux, when expectations and duties of organisations towards all their stakeholders have been constantly shifting, it is more important than ever for employers to demonstrate support for anyone who would raise a concern about wrongdoing or malpractice within their workplace.

New and very different practices and ways of working may lead to problems which employers cannot afford to miss.

Mass remote working could produce opportunities for data breaches, new reporting methods may lead to mis-reporting of finances, and new working environments may create health and safety hazards or safeguarding issues.

We have already seen so many examples of whistleblowers raising life and death issues from a medical point of view – the Wuhan doctor who raised the alarm about the virus, and health and care workers coming forward about PPE shortages.

The Protect Advice Line has been busier than ever, with 40% of our calls being Covid-19 related. Calls to us are usually from individuals who do not know where to turn, or who don’t feel confident following the procedure set out by their workplace. This could be evidence of mistrust, but could also be a sign that organisations are just not communicating their guidelines and attitude towards whistleblowing as well as they could be.

The value of speaking up to stop harm has never been clearer, and it could benefit businesses greatly to demonstrate that their support for staff by talking about World Whistleblowers Day.

Employers regularly ask us how they can talk to employees about whistleblowing without creating alarm, or suggesting problems which may not exist. World Whistleblowers Day is a great opportunity to create a positive conversation around the arrangements they have in place, and why they are so important.

Here are some top tips from our Business Support team on how to use World Whistleblowers Day to increase levels of staff engagement on the subject of speaking up:

  • Circulate your policy with a word from your chief executive. Don’t have a policy yet? Contact us and we’ll help you write one
  • Appoint a whistleblowing champion who will flag fly for your arrangements and monitor the effectiveness of your whistleblowing arrangements. Remember to communicate their details in your staff newsletter/ on your intranet
  • Test employee confidence on whistleblowing by creating a survey, listening exercises or hosting focus groups. Our team can help you with these things if you wanted to explore options that are right for you
  • Train your staff – especially department heads and line managers who may be the first point of call for all kinds of queries and concerns
  • Create ‘FAQs’ and ‘How to’ guides for staff and people managers which bring your policy to life and clearly show who the best person to contact would be

Please tell us if and how you recognise World Whistleblowers Day so that we might build case studies of employers who are leading the way with making sure that malpractice and wrongdoing is avoided, or resolved quickly, and that whistleblowers are encouraged and protected.

By Stella Sutcliffe, Business Support Manager at Protect


Far too often is bullying a prevalent concern in the workplace, which places a strain on workplace culture and leaves employees stressed. In the wake of a Cabinet Office investigation into the bullying behaviour of Home Secretary Priti Patel that is set to be concluded this week, the former Home Office permanent secretary Sir Philip Rutnam has recently lodged an employment tribunal claim under the Public Interest Disclosure Act 1998 (PIDA) to argue that he was constructively dismissed for whistleblowing about the Home Secretary’s alleged behaviour.  This case underlines the negative impact a bullying culture can have on an organisation and raises important questions about when a bullying issue crosses over from HR issue into whistleblowing.

Is bullying protected by the whistleblowing protection

The tribunal case will be closely watched by legal commentators as it is expected that Rutnam’s case will consider whether concerns in relation to bullying are covered by the PIDA and the “public interest test”. While it is often assumed that there is a rigid division between whistleblowing concerns and individual HR issues such as bullying, the reality is there is significant overlap between the two. An overly rigid approach to dealing with cases by employers may mean that concerns that should be handled as whistleblowing are incorrectly dealt with as grievances. In short if an employer deals with bullying as purely a complaint between two members of staff they may miss a situation where a damaging culture of bullying exists.

On Protect’s Advice Line 5% of our cases from last year ,137 from a sample of size of 2796, were bullying whistleblowing cases where the concern was based on a culture of bullying, rather than just an isolated incident. This means it may not be effective for employers to just investigate through a grievance or HR mechanisms as it’s a matter that concerns a whole team, department or even a whole workforce, rather than just an individual’s contractual rights.

The role of regulators in a bullying culture

Some regulators such as the Financial Conduct Authority (FCA) have taken an interest in cultural issues like bullying as a way to gauge the overall whistleblowing culture of a bank or insurance firm. In its “Dear CEO Letter” the FCA stated that “that poor culture in organisations…can lead directly to harm to consumers, market participants, employees and markets”. This approach has been adopted by other regulators of professionals where culture and bullying conduct by individuals could impact consumers or an individual’s fitness and practice. Other regulators should be taking a similar approach to the FCA by viewing culture as being integral to internal whistleblowing arrangements in the organisations they regulate and introducing rules or standard for such arrangements. This is Principles 5 of the Protect’s guide for regulators, the Principles for Recommended Practice: Better Regulators”.

Other indicators that make bullying a whistleblowing issue

Other indicators for when concerns about bullying may engage the public interest is if it concerns a large number of employees and/or if it affects their rights in a significant way, such as high numbers of work-related stress. Additionally, a culture of bullying may have a wider impact on the public and to the services that the organisation provides. For instance, in a health setting this may affect the quality of care that is being provided by a team which in turn creates patient safety concerns, which would engage the public interest and should warrant a separate investigation.

For the well-being of staff and for the delivery of services, it is important for employers to understand when cultural issues in the workplace become a whistleblowing matter, and that they can identify this from complaints and grievances made by employees and act appropriately.

What Should Employers should be looking out for?

  • Spot trends from whistleblowing concerns and grievances – This will help you identify, investigate and resolve concerns in an effective way and help you make organisation-wide changes to resolve systemic issues.
  • Consider the impact of bullying issues on service delivery – The impact of workplace bullying may be felt by your organisation, its customers or the general public. Make sure that you ascertain the impact of bullying issues so that you are able to better investigate and resolve them.
  • Create and maintain a healthy speak-up culture – Make sure employees feel empowered to come forward to raise concerns. Clearly set out the difference between whistleblowing and grievances in your whistleblowing policy and make sure that managers are properly supported in triaging difficult issues around bullying culture.

 

Being vigilant to trends or repeat incidents from multiple complaints or grievances e.g. harassment (#MeToo).  This again will alert an employer when a grievance issue has an additional whistleblowing element. Fostering a healthy workplace culture is key to minimising bullying as a concern within itself, as well as the knock-on effects that it may have on wider wrongdoing.

By Burcak Dikman


In the UK, certain regulators are recognised as ‘prescribed persons’ by the government, for example the Care Quality Commission and the Health and Safety Executive. Being a ‘prescribed person’ means that an organisation can be approached to receive and handle specific concerns, as listed online.

This matters for whistleblowers, as making a disclosure of information (i.e. blowing the whistle) to a prescribed person is an act which carries stronger legal protection than disclosing information to a body which is not ‘prescribed’.

The Prescribed Persons (Reports on Disclosures of Information) Regulations 2017, passed on 1 April 2017, imposed new rules: a duty on prescribed persons to publish annual reports on the whistleblowing disclosures they have received by 1 October each year.

Prescribed persons have a duty to report:

  • The number of disclosures received from whistleblowers
  • How many of these disclosures lead to a regulatory response/action
  • What action was taken, and the operational impact of this (e.g. if the information from the disclosure helped the prescribed person to perform it’s regulatory function)
  • A summary of the prescribed persons own functions and objectives

The Department for Business, Energy and Industrial Strategy (BEIS)

BEIS, who collate all the reports each January, have stated:

“The aim of this duty is to increase transparency … and to raise confidence among whistleblowers that their disclosures are taken seriously. Producing reports … will go some way to assure individuals who blow the whistle that action is taken in respect of their disclosures.”

However, BEIS also confirm:

“In collating these reports, BEIS has not assessed them for compliance with the duty. The legal obligation falls on the prescribed person to meet the annual reporting duty requirement.”

The Problem

The danger of introducing a duty and not even assessing compliance, far from enforcing it, is that this can bring the opposite of the desired effect – and reduce confidence in the regulatory system.

Our records show that almost three years on from the introduction of the regulations, almost a third of prescribed persons (32%) are not fully compliant with the reporting duty, and one in 20 have not published any of the information required by the duty. However, when prescribed persons do not comply with the duty to report, the government take no action for this breach of their duties; and it appears there are no plans to change this.

Without enforcement of the duty, how can confidence be built from the reports being published; how can a whistleblower be sure their concerns won’t be ignored, when over a third of all those prescribed don’t provide all the information that they are required to by law.

Protect are campaigning for a new law, which would enable whistleblowers to hold regulators to account if their concerns are ignored, or if their confidentiality is breached. Our new law would create a requirements for regulators to uphold set standards when it comes to handling and responding to whistleblowers. An oversight body, a Whistleblowing Commissioner, would be established, which would have powers to issue penalties if these standards are breached.

By Laura Fatah


The Covid-19 crisis has given rise to fast changing laws and regulations, and new loopholes and opportunities for fraud have emerged. Within a few weeks of the furlough scheme’s introduction, Protect has seen a rising trend in calls from whistleblowers concerned their employer is acting unlawfully.

Whistleblowers will be vital in policing this scheme to ensure that tax payers are not defrauded out of vital public funds.

Here is a summary of some of the cases (with changed names)  from the Advice Line:

Being asked to come back and work as a “volunteer”

The majority of the cases we have received to our Advice Line have focused on situations where workers have either been asked or told to go back to work even though they are part of the job retention scheme.

Craig works for a small company where all the staff have been furloughed. He and other staff have been asked to carry on working for the company as “volunteers”, so the work will be unpaid. Craig has raised this as part of a group of concerned colleagues, but his managers have responded to say that such arrangements are legitimate and that they took legal advice.

Some of our cases show whistleblowers being aware that their employer is breaching the rules across the company

We have also seen cases where whistleblowers have become aware of actions or plans to breach the Furlough rules that doesn’t involve themselves personally being affected.

Timothy works in the finance department of a small company.  During his work organising the company accounts he notices that he and 5 other members of staff (including a director) have been placed on furlough leave.  All the staff on the scheme are still working for the company.  Timothy raised his concerns with his line manager, the Finance Director. The response was to remove Timothy from the scheme, but the line manager refused to remove anyone else as he felt bodies such as HMRC would not have the resources to prosecute all those companies that breached the rules.

Dismissal, victimisation or threats when the concerns is raised

Worryingly, yet unsurprisingly we have seen whistleblowers threatened, victimised or dismissed once they have raised their concerns.

Some have been threatened with dismissal if they object to their employers plans:

Eloise is a senior manager working in financial services.  The Chief executive sent an email to all directors saying that staff will be furloughed (this is around 30 people) despite the fact that all staff are working from home and that as the staff work manly from sales commission which falls outside of the scheme. Eloise raised her concerns with the Chief Executive who threatened her with dismissal if she objected to the plan.

Other whistleblowers have been dismissed after voicing their concerns.

Mohammad was furloughed by his employer but was then asked to carry on working.  When Mohammad refused to work as it went against the Government guidelines his employer threatened him with dismissal.  A few days later Mohammad received a letter making him redundant as the company lacked the cash flow to pay his wages.

What a concerned worker can do if concerned:

Check the Government Guidance

Though the guidance has changed many times it is a good resource to look at what the Government have produced for workers, and what they expect from employers. This will give any concerned worker an idea of whether what the employer is doing breaches this or not.

Consider raising it first internally

Raising the concerns externally

If you do not feel that internal channels will be effective, or if you have already raised the concern internally, you can contact HMRC on their Fraud Reporting website via their online form.  You can also contact Protect for advice through our online form or by calling 020 3117 2520.