Enterprise and Regulatory Reform Bill

Memorandum submitted by Public Concern at Work (PCAW) (ERR 03)

Evidence of Cathy James – Public Concern at Work

Enterprise and Regulatory Reform Bill – Clause 14

I, Cathy James, will say as follows:

1. I am Chief Executive of Public Concern at Work ("PCaW") which is an independent charity and legal advice centre dealing exclusively with whistleblowing. I am making this statement to assist the Public Bill Committee for the Enterprise and Regulatory Reform Bill (ERRB) and specifically clause 14 which inserts a public interest test into the Public Interest Disclosure Act 1998 ("PIDA") - more on which below.

2. By way of background, PCaW was launched in 1993, following a series of disasters and scandals such as the Piper Alpha oil rig explosion, the Clapham Rail Disaster and the collapse of BCCI. When public inquiries were set up to look into what went wrong in each of these cases and others, it was found that staff had known about the problems or risks and had either been too scared to speak up, or had raised their concern only to be ignored or, worse, sacked. The founders of the charity were keen to assist those who have witnessed malpractice, wrongdoing or risk at work, as well as to promote whistleblowing as an instrument of accountability.

3. At the heart of what we do is our free, confidential and expert advice for workers who wish to raise a public concern (such as a danger to health and safety, fraud or other misconduct). The charity was also instrumental in setting up the legislative framework for the protection of whistleblowers in the UK - PIDA - which was inserted into the Employment Rights Act 1996. In addition, PCaW provides bespoke training and consultancy for organisations across the public, private and voluntary sectors. In recent years we have worked with a number of trades unions, professional bodies and regulators including the Financial Services Authority, the Serious Fraud Office, the NHS, Ofsted and the Nursing and Midwifery Council ("NMC").

4. As committee members will be aware, clause 14 of the ERRB introduces a public interest test into PIDA on the basis that this will overcome a legal loophole whereby individuals are able to claim protection under PIDA for raising a concern about their own personal employment contract. We are deeply concerned that this amendment is being undertaken without thorough public consultation, that the amendment suggested will not overcome the problem, that it will instead result in a field day for lawyers and that this is a missed opportunity for addressing problems which have arisen in the legal protection for whistleblowers.

5. We agree that the use of PIDA to raise concerns about private employment rights has watered down the public interest purpose of PIDA. The so called loophole arose in an interim employment tribunal case, Parkins v Sodexho [1] and there have been concerns that PIDA is being abused by City bankers who are using it to claim that raising concerns about their bonus payments are protected disclosures under PIDA [2] . This has led some to say that PIDA claims are being dominated by "pale, stale, males". This affects the reputation of this key piece of legislation and is a far cry from the original purpose of the legislation and the Parliamentary debates for the first and second bills.

6. The proposed amendment deals with the removal of the loophole by inserting a public interest test into the legislation so that any disclosure will not be protected unless it is believed to be made in the public interest by the concerned worker. I have set out the entire wording for the proposed amendment (and our suggested alternative amendments) in Annex A attached to this statement.

7. We agree that something has to be done to address this loophole but we find we cannot support the proposed amendment on three grounds:

The failure to consult

8. First, the amendment envisages including a public interest test in PIDA without considering the wider problems with the law and the need for a public consultation. The timing of an amendment to the law also does not seem prudent given the on-going Mid Staffordshire NHS Foundation and Leveson Inquiries, both of which will have important outcomes for the public interest and will likely have conclusions that will deal with whistleblowing. The failure to undertake a wider, comprehensive review, will be a ‘missed opportunity’ to address some of the legal loopholes that exist which include a gaping hole in protection if workers are victimised by co-workers for raising a concern (no vicarious liability mechanisms), making sure all workers are adequately covered, clarifying protection for GPs, and ensuring that workers who raise concerns with all statutory bodies including the police and professional regulators are readily protected. I have set out case studies and examples of these problems under the heading of ‘a missed opportunity’ below.

‘Field day’ for lawyers

9. Secondly, we are concerned that the proposed amendment will not address the legal loophole and will instead become a field day for lawyers who will spend time arguing whether or not something is in the public interest, increasing litigation, costing employers and the taxpayer more; all of which the Government has sought to address in recent consultations on employment law reforms.

10. As it currently stands PIDA identifies broad categories of public interest issues - criminal offences, dangers to the environment, miscarriages of justice, health and safety concerns and breaches of legal obligations. The amendment suggested in the ERRB requiring that individual whistleblowers consider what is and what is not in the public interest will not address the problem at hand. It is perfectly feasible that an individual, faced with unfair treatment by his employer relating to his own contractual terms could reasonably believe that raising such an issue would be in the public interest. Even though an employment tribunal might not agree, it would be reasonable for the individual to think that is the case and hence the issue at hand, namely the protection for individuals in these circumstances, might not actually be dealt with by the proposed amendment.

11. In addition, the public interest test imposed will cut across all the categories of wrongdoing which means, for example, when raising a concern about a criminal offence an individual would have to show that it is in the public interest. It is common sense that an individual who makes a disclosure about criminal offences, dangers to the environment, miscarriages of justice and dangers to health and safety, would believe the issue is in the public interest and so should not be subject to an additional public interest test.

12. The purpose of PIDA is to prevent disaster and to encourage workers to speak up when they have a suspicion. Issues that at one point seem trivial may in fact be indicative of underlying problems in an organisation and could be the tip of the iceberg. A public interest test may have the unintended consequences of focussing on how big the disaster is or was likely to be, and mean less focus on reporting early suspicions. Issues such as missed medication [3] or loose wiring [4] may seem relatively minor compared to a multi-million pound fraud such as that in the high profile Olympus case [5] but could be a matter of life and death.

13. We suggest the amendment set out in Annex A which would have the effect of dealing with the Parkins v Sodexho issue without imposing an additional barrier for the genuine whistleblower, as an alternative to the one presently proposed in the ERRB.

14. Committee members will note that we have also suggested as an alternative proposal, that if the public interest test is to be inserted into the legislation as proposed, then it should replace the good faith test in the legislation as a countervailing measure to ensure that the legislation continues to strike the right balance between the public interest, the interests of workers raising concerns and the interests of employers. Alternatively the public interest test is better used as an interpretative test for gauging good faith in the legislation. More on this proposal is set out below at paragraph 23 et seq.

A new barrier for honest whistleblowers

15. Thirdly, the perception will be that this test is a barrier to individual whistleblowers. When this is added to the fact that PIDA is little known and often misunderstood, we believe that the legislation will be undermined by this approach. It will also add to the idea promulgated in the media that if you are whistleblower, you will suffer and that the law is too complicated to protect you. In sectors such as health and care, where whistleblowing can save lives and taxpayers’ money, and where gagging clauses and hierarchical professions and workplaces impose real obstacles for the individual, such an amendment will be seen as another obstacle. The honest and reasonable whistleblower, faced with an increasingly complex piece of legislation to navigate should they be poorly treated, may choose not to speak up. This is a rather damning position, nearly two decades on from the Bristol Royal Infirmary Inquiry when the whistleblower, Dr Stephen Bolsin [6] , was forced to leave the UK to find work. It should be remembered that the law should encourage individuals to become whistleblowers. To do so it must be seen as providing clear, robust protection.

16. Furthermore, Parliament when it passed PIDA did not place a public interest test in the legislation, choosing instead to define the categories of wrongdoing under which disclosures in the Public Interest Disclosure Act should fit. Good faith was seen as the appropriate safeguard. Dame Janet Smith in her report on the Shipman inquiry commented that perhaps good faith should be replaced by a public interest test. If the public interest test is to be considered at all, it really should be considered in conjunction with the test of good faith and as an alternative not additional test. As I have said, I return to this issue later in this statement.

‘A missed opportunity’ to protect whistleblowers

17. The lack of consultation means that this will also be a missed opportunity to deal with some of the problems that have arisen since PIDA’s introduction over a decade ago. These problems include:

a) Vicarious Liability Loophole

18. This loophole has arisen in the context of three nurses from Manchester who raised a concern about a colleague lying about his qualifications. The nurses raised their concern within the service and the Primary Care Trust. Their concern was upheld. However, the nurses were subject to bullying and harassment from co-workers. One of the nurses received a telephone call threatening her daughter and to burn down her home [7] . The case proceeded as far as the Court of Appeal, which found that vicarious liability does not exist in PIDA, as it specifically does in discrimination law. Shortly after the publication of the judgment, Lord Howe, the Health Minister, agreed that this area needs to be reviewed [8] . From the experience on our advice line, harassment and bullying by co-workers is not uncommon and for there to be no protection in this area is extremely problematic, as it means whistleblowers could be facing a cardboard shield in terms of the protection afforded by PIDA. It surely cannot be right that an employer can fail to do enough to protect a whistleblower from victimisation and yet altogether escape liability. To overcome this problem, we suggest transposing the existing tests from the Equality Act 2010 (sections 109-112 and section 40) into PIDA. This would also build a defence into the legislation for employers, as if they can show that they took reasonable steps to prevent the victimisation, they would not be liable.

19. It is bad news for whistleblowers everywhere if whistleblowers who are bullied by fellow workers are not protected. It presents policy difficulties in educating workers how and when they should blow the whistle on serious issues affecting patient safety in health, or banking regulations for example, if one of their key fears, the reaction of colleagues, is not something that they are protected from under the law. This will act as a disincentive to any honest whistleblower. Another example of this is the case of Helene Donnelly, a nurse who gave evidence to the Mid Staffordshire Inquiry and spoke of the bullying she experienced by other staff. Surely no one would suggest she should not have been protected [9] ?

b) Widening the scope of PIDA to cover all GPs, student nurses, doctors, health care professionals, volunteers, NEDs (including public appointments) and prospective job applicants and all categories covered in the Equalities Act.

20. Recent employment law cases and media stories have highlighted the difficulties of the above groups such as students on vocational placements in health and care settings, all GPs (see Anne Milton’s answer to a Parliamentary question which highlighted the complicated nature of the protection of GPs at present [10] ), volunteers, non-executive directors (the reluctance of Royal Bank of Scotland non-executives to question Fred Goodwin [11] ), public appointments (the case of Kay Sheldon - a board member of the Care Quality Commission [12] ), members of LLPs (covered by the Equality Act 2010), priests (covered by the Equality Act 2010) and foster carers. We would suggest that all of these categories of workers should be included in the definition section of PIDA (section 43K).

21. The lack of protection for job applicants was highlighted in an Employment Tribunal Appeal case, BP v Elstone [13] , where an employee was protected from victimisation by his current employer, having raised a concern with his previous employer. The tribunal commented that had the claimant been a job applicant he would not have been protected. On our advice line, discrimination at pre-employment stage is a worry for workers considering whether and how to raise a concern. It can be daunting for an individual who has raised a genuine concern about a danger, risk or malpractice in the workplace and has left the organisation, to know what to say about why they left their last job. This presents a very difficult dilemma for a whistleblower who has raised an issue of public concern and it is important to build some protection into the system so that whistleblowers are not fearful in such situations. In research that we have conducted for the Older People’s Commissioner for Wales, we found that the second most common negative response from an employer was refusing to provide a good reference.

22. In order to overcome this problem we propose the definition of worker in section 43K of PIDA is extended to include: student nurses, doctors, healthcare professionals and social workers, General Practitioners in the health service, regardless of their contractual arrangements, volunteers and interns, Non-Executive Directors, Public Appointees, members of LLPs, Priests, Foster carers, job applicants, and all categories covered in the Equality Act 2010.

Tackling the good faith test

23. Dame Janet Smith in the Shipman Inquiry stated that good faith was a barrier to whistleblowers.

24. We have proposed three options for addressing the good faith point. Option (i) is to remove the test altogether. This option could sensibly be considered alongside the insertion of the public interest test as suggested in the current amendment proposal. This is something that was originally suggested by Dame Janet Smith in the Shipman Inquiry and so is a plausible option for this committee to consider. This suggestion would counterbalance the inclusion of the public interest test proposed in the ERRB. As stated above, I have included in Annex A the wording for such an amendment.

25. Our second suggested amendment includes a public interest test linked to the interpretation of the meaning of good faith. This means that the worker would have to show that the predominant motive for raising their concern is in the public interest. We would suggest that this is a more appropriate place for the public interest test to be inserted into PIDA, to assist the Employment Tribunal with the interpretation of good faith, rather than expecting the whistleblower to understand the meaning of the public interest and placing an additional hurdle on them before protection is available.

26. Our third suggested amendment to PIDA and the wording of the legislation relating to good faith clarifies that the purpose of PIDA protection is that wrongdoing can be addressed. This follows the approach taken by the Court of Appeal in Street v Derbyshire UWC [14] that (a) good faith means with the honest purpose of raising the concern so it can be addressed, but (b) that an ulterior predominant motive can negate good faith.

27. Our third suggested amendment clarifies this by stating that a predominant ulterior motive should only negate PIDA protection where it is malicious. This reflects the meaning the Government intended the term ‘in good faith’ in PIDA should have, as confirmed by the DTI in its comments of 31 August 2001 on the report into the Bristol Royal Infirmary that ‘in good faith’ in PIDA "simply means that the disclosure was made honestly, not maliciously." In clarifying the honesty of purpose on the face of the Act, this amendment helps reduce the risk that an employee might be tempted to make an internal disclosure to blackmail the employer by offering to keep the wrongdoing secret if he is given an undue benefit.

Extending the categories of wrongdoing

28. Gross waste, gross mismanagement and abuse of authority are not included in PIDA but are included in equivalent US legislation. At a time of austerity and the abolition of the Audit Commission, we suggest that these categories should be included, particularly as what may be deemed as a waste of money may not in fact be illegal but we would still hope that such concerns are raised. For example it could be a way to encourage workers to raise concerns about mass over-expenditure in public spending projects such as the waste of public money in the NHS IT system [15] . We suggest that this would be a more appropriate use of the public interest test in the legislation, by inserting a public interest category into the legislation to cover these types of wrongdoing which may not be covered by the other categories. This also ensures that PIDA evolves and covers serious ethical concerns that fall short of a breach of legal obligation.

Gagging clauses

29. Little attention has been paid to the provision in PIDA section 43J which outlaws any contractual clause that prevents workers from making a protected disclosure. The cases of Dr Kim Holt and Great Ormond Street Hospital, and former inspectors at the Care Quality Commission [16] giving evidence to the Mid Staffordshire Inquiry highlight the need for greater attention to be drawn to section 43J of PIDA and for there to be tougher enforcement. We recommend a positive requirement is placed on lawyers advising in the settlement of claims, that they advise claimants about their rights under the Public Interest Disclosure Act and the provisions of section 43J.

Disclosures to all statutory bodies are protected

30. PIDA identifies a list of prescribed regulators and protection is relatively easy for individuals who raise concerns with them. Given that statutory bodies are changing we would suggest that the specific provision in PIDA dealing with this point (section 43F) be widened to cover a disclosure to a relevant statutory body whether or not it is prescribed. An amendment along these lines has been suggested by the DTI (as was) as it is administratively cumbersome to have to prescribe new regulators. The amendment includes not only regulators such as the HSE or FSA but also the relevant local authority enforcement authorities. Given that there are changes to the regulatory activities in financial services, it may be prudent to allow this change and to ensure protection can flow seamlessly. This also means that individuals who raise concerns with professional regulators such as the Nursing and Midwifery Council, General Medical Council and the Health Professions Council would be more easily protected. More importantly this would be a smart way to deal with international criticism from the OECD that disclosures to the police have to satisfy higher tests than disclosures to prescribed regulators. We recommend that the power to prescribe persons should also be retained to ensure that there is clarity around the majority of regulators incorporated into the statutory framework and so that the law can develop where necessary (e.g. in 1997/8 the Minister Ian McCartney MP suggested union officials might be prescribed at some point).

31. I have attached at Annex B a short paper providing more detailed suggestions for amendments to PIDA in accordance with the previous paragraphs in this statement which complements Annex A and which I trust will be of assistance to the Committee. I hope that this short statement is of use to those considering clause 14 of the ERRB as it passes through parliament. I would be happy to provide further assistance as the committee sees fit and I do hope that those who consider the proposed amendment see the strength of our argument that now is the time to undertake a thorough consultation on PIDA to ensure it continues to provide a proper incentive for workers to blow the whistle on matters affecting the public interest.

.

ANNEX A

PCaW drafting proposals

THE PUBLIC INTEREST TEST

Through Clause 14 of the Enterprise and Regulatory Reform Bill, DBIS are proposing to remove the Parkin v Sodexho loophole in the following way:

Public interest test proposed by DBIS

Enterprise and Regulatory Reform Bill

14. Disclosures not protected unless believed to be made in the public interest

In section 43B of the Employment Rights Act 1996 (disclosures qualifying for

protection), in subsection (1), after "in the reasonable belief of the worker

making the disclosure," insert "is made in the public interest and".

The change would have the following effect:

Employment Rights Act 1996

43B.

(1) In this Part a "qualifying disclosure" means any disclosure of information which, in the reasonable belief of the worker making the disclosure is made in the public interest and tends to show one or more of the following-

(a) that a criminal offence has been committed, is being committed or is likely to be committed,

(b) that a person has failed, is failing or is likely to fail to comply with any legal obligation to which he is subject,

(c) that a miscarriage of justice has occurred, is occurring or is likely to occur,

(d) that the health or safety of any individual has been, is being or is likely to be

endangered,

(e) that the environment has been, is being or is likely to be damaged, or

(f) that information tending to show any matter falling within any one of the preceding paragraphs has been, is being or is likely to be deliberately concealed.

We suggest the amendment below, which would have the effect of dealing with the Parkins v Sodexho issue without imposing an additional barrier for the genuine whistleblower, as an alternative to the one presently suggested by DBIS:

PCaW suggested amendment:

Enterprise and Regulatory Reform Bill

14. Breach of a legal obligation relating to the worker’s private contractual rights owed solely to the worker. In section 43B of the Employment Rights Act 1996 (disclosures qualifying for protection), in subsection (1)(b), after "any legal obligation to which that person is subject," insert "other than a private contractual obligation which is owed solely to that worker".

43B. - (1) In this Part a "qualifying disclosure" means any disclosure of information which, in the reasonable belief of the worker making the disclosure, tends to show one or more of the following-

(a) that a criminal offence has been committed, is being committed or is likely to be committed,

(b) that a person has failed, is failing or is likely to fail to comply with any legal obligation to which that person is subject (other than a private contractual obligation which is owed solely to that worker),

(c) that a miscarriage of justice has occurred, is occurring or is likely to occur,

(d) that the health or safety of any individual has been, is being or is likely to be endangered,

(e) that the environment has been, is being or is likely to be damaged, or

(f) that information tending to show any matter falling within any one of the preceding paragraphs has been, is being or is likely to be deliberately concealed.

GOOD FAITH TEST

There are three options:

1. Remove the "good faith" test from 43C(1), 43E(b), 43F(a), 43G1(a) and 43H1(a)

PCaW suggested amendment:

Enterprise and Regulatory Reform Bill

14. Disclosures not protected unless believed to be made in the public interest

In section 43B of the Employment Rights Act 1996 (disclosures qualifying for

protection), in subsection (1), after "in the reasonable belief of the worker

making the disclosure," insert "is made in the public interest and". Remove the "good faith" from 43C(1), 43E(b), 43F(a), 43G1(a) and 43H1(a)

2. A disclosure is made "in good faith" where the purpose of the worker in making it is so that the relevant failure can be considered and addressed and he does so in the public interest.

PCaW suggested amendment:

Enterprise and Regulatory Reform Bill

14. In section 43L of the Employment Rights Act 1996 (Other interpretative provisions), insert:

4) A disclosure is made "in good faith" where the purpose of the worker in making it is so that the relevant failure can be considered and addressed and he does so in the public interest.

3. The ‘good faith’ test should be satisfied where the purpose of the disclosure is that the concern can be assessed and addressed. PIDA protection should only be lost if there is a predominant ulterior motive which is dishonest or malicious.

PCaW suggested amendment:

Enterprise and Regulatory Reform Bill

14. In section 43L of the Employment Rights Act 1996 (Other interpretative provisions), insert:

(4) A disclosure is made "in good faith" where one of the purposes of the worker in making it is so that the relevant failure can be considered and addressed and he does not have a predominant malicious purpose.

ANNEX B

LEGISLATIVE ISSUES FOR THE PUBLIC INTEREST DISCLOSURE ACT 1998

Public Concern at Work proposes the amendments to PIDA which are set out on the following pages should be considered. In brief, they will provide the following:

1. Ensuring that breaches of private contractual obligations will no longer be deemed to be protected disclosures.

2. Transposing the principles of vicarious liability from the Equality Act 2010 to ensure:1) employers can be vicariously liable for victimisation or detriment by co-workers, of a worker who has made a protected disclosure, and 2) employers are given a defence where they take reasonable steps to deal with victimisation by a co-worker.

3. Widening the scope of PIDA to include student nurses, doctors, health care professsionals, volunteers and prospective job applicants.

4. Enabling the categories of wrongdoing to be widened to cover public interest issues such as gross waste, mismanagement and abuse of authority that do not fall under the other categories of wrongdoing.

5. Removing the good faith test. Alternatively re-working the good faith test to include a public interest test or that PIDA protection will be lost where the predominant ulterior motive is dishonest or malicious.

6. Providing a positive requirement on lawyers advising workers on settlement agreements about the protection of PIDA and that they cannot be gagged or prevented from making a disclosure that would otherwise be protected by PIDA.

7. Removing confusion for employers and workers by ensuring allegations about potential wrongdoing are covered by PIDA.

8. Where a worker has already raised a concern with his employer and the matter has not been addressed, in making a subsequent disclosure to a regulator he should only have to satisfy the same evidential hurdles as an internal disclosure.

9. It should no longer be necessary for statutory bodies to be prescribed by order for a worker to be entitled to second level PIDA protection.

10. A junior lawyer concerned about the illegality of a client’s action (or the action of their principal) should not automatically be denied PIDA protection where he raises the concern (a) within his firm or (b) with the client.

11. A worker should not have to prove that it is more probable than not that the crime or danger will occur to be entitled to PIDA protection.

12. A worker should have to cross a low hurdle of protection when raising concerns with their trade union representative.

Proposed wording for these amendments and further explanation of their purposes follows.

AMendment 1: Private concerns (addressing parkins v sodexho)

Section 1 PIDA / section 43B ERA

Sub-section 1(b) after "legal obligation" insert "(other than a private contractual obligation which is owed solely to that worker)"

Purpose

The first amendment to 43B(1)(b) makes clear that PIDA protection does not apply where the worker is blowing the whistle about a legal wrong that affects only his private interests. This will overcome the confusion caused by the decision in Parkins v Sodexho and ensure that PIDA protection will arise in situations where a worker has raised a public interest concern. We offer this amendment as an alternative to that being proposed by DBIS, as that amendment will place an additional hurdle on workers raising genuine concerns and in any event arguably fails to address the problem in Parkins v Sodexho.

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If amended, the sub-section would read

43B. - (1) In this Part a "qualifying disclosure" means any disclosure of information which, in the reasonable belief of the worker making the disclosure, tends to show one or more of the following-

(g) that a criminal offence has been committed, is being committed or is likely to be committed,

(h) that a person has failed, is failing or is likely to fail to comply with any legal obligation (other than a private contractual obligation which is owed solely to that worker) to which that person is subject,

(i) that a miscarriage of justice has occurred, is occurring or is likely to occur,

(j) that the health or safety of any individual has been, is being or is likely to be endangered,

(k) that the environment has been, is being or is likely to be damaged, or

(l) that information tending to show any matter falling within any one of the preceding paragraphs has been, is being or is likely to be deliberately concealed.

AMENDMENT 2: Vicarious Liability

To transpose the tests for vicarious liability as contained in sections 109-112 and 40 of the Equality Act 2010.

Purpose

The Court of Appeal in a recent decision (NHS Manchester v Fecitt [17] - a case involving three nurses who raised concerns about a colleague lying about their nursing qualifications) stated that vicarious liability does not apply to the PIDA. This has meant that workers are not protected where they are victimised by co-workers. If these tests are inserted into PIDA the employer will have a defence to this liability if they can show that they have taken reasonable steps to prevent the victimisation or detriment.

Sections 109-112 and section 40 of the Equality Act 2010 are easy to copy over and offer a very simple, quick and neat solution for the Department to deal with this problem.

Amendment 3: widening the scope of Worker

The definition of worker in section 43K be extended to include:

· Student nurses, doctors, healthcare professionals and social workers

· General Practitioners in the health service , regardless of their contractual arrangements

· Volunteers and interns

· Non-Executive Directors

· Public Appointments

· Members of LLPs

· Priests

· Foster carers

· Job applicants

· All categories covered in the Equality Act 2010

Purpose

Recent employment law cases and media stories have highlighted the difficulties of the above groups such as students on vocational placements in health and care settings, all GP’s (see Anne Milton’s answer to a parliamentary question which highlighted the complicated nature of the protection of GPs at present [18] ), volunteers, non-executive directors (the reluctance of Royal Bank of Scotland non-execs to question Fred Goodwin [19] ), public appointments (the case of Kay Sheldon- a board member of the Care Quality Commission [20] ), members of LLPs (covered by the Equality Act 2010), priests (covered by the Equality Act 2010), foster carers and job applicants (BP v Elstone [21] ).

amendment 4: ADDING A PUBLIC INTEREST CATEGORY THAT COULD COVER GROSS MISMANAGEMENT, WASTE, and other ETHICAL ISSUES THAT ARE NOT ILLEGAL

Section 1/ section 43B ERA

After section 43B(1)(e) insert "(e)(A) that the public interest has been, is being or is likely to be damaged, or"

Purpose

Gross waste, mismanagement , abuse of authority are not included in PIDA but are included in equivalent US legislation. We suggest a public interest category would be useful to cover these types of wrongdoing which may not be covered by the other categories. This also ensures that PIDA involves and covers serious ethical concerns that fall short of a breach of legal obligation.

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If amended, the sub-section would read

43B. - (1) In this Part a "qualifying disclosure" means any disclosure of information which, in the reasonable belief of the worker making the disclosure, tends to show one or more of the following-

(a) that a criminal offence has been committed, is being committed or is likely to be committed,

(b) that a person has failed, is failing or is likely to fail to comply with any legal obligation (other than one which is owed solely to that worker) to which that person is subject,

(c) that a miscarriage of justice has occurred, is occurring or is likely to occur,

(d) that the health or safety of any individual has been, is being or is likely to be endangered,

(e) that the environment has been, is being or is likely to be damaged, or

(e)(A) that the public interest has been, is being or is likely to be damaged, or

(f) that information tending to show any matter falling within any one of the preceding paragraphs has been, is being or is likely to be deliberately concealed

AMENDMENT 5: GOOD FAITH TEST

Purpose

Dame Janet Smith in the Shipman Inquiry stated that good faith was a barrier to whistleblowers. This is being borne out by recent reports in the Mid Staffordshire and Leveson Inquiry.

We set out three options for addressing the good faith point. Options (ii) and (iii) both clarify that the purpose of PIDA protection is so that the wrongdoing can be addressed. It follows the approach taken by the Court of Appeal in Street v Derbyshire UWC [2004] EWCA Civ 964 that (a) good faith means with the honest purpose of raising the concern so it can be addressed, but (b) that an ulterior predominant motive can negate good faith. The amendment clarifies this by stating that a predominant ulterior motive should only vitiate PIDA protection where it is malicious. This reflects the meaning the Government intended the term in PIDA should have, as confirmed by the DTI in its comments of 31 August 2001 on the report into the Bristol Royal Infirmary that in good faith in PIDA "simply means that the disclosure was made honestly, not maliciously." In clarifying the honesty of purpose on the face of the Act, this amendment helps reduce the risk (increased by the abolition of the register of employment tribunal applications) that an employee might be tempted to make an internal disclosure to blackmail the employer by offering to keep the wrongdoing secret if he is given an undue benefit.

i) Simply removing the good faith test from 43C, 43E, 43F,43G, 43H

ii) Alternative - the ‘good faith’ test should be satisfied where the purpose of the disclosure is that the concern can be assessed and addressed. PIDA protection should only be lost if there is a predominant ulterior motive which is dishonest or malicious.

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If amended, the sub-section would read

43L. – (1) In this Part-

"qualifying disclosure" has the meaning given by section 43B;

"the relevant failure", in relation to a qualifying disclosure, has the meaning given by section 43B(5);

(2) In determining for the purposes of this Part whether a person makes a disclosure for purposes of personal gain, there shall be disregarded any reward payable by or under any enactment.
(3) Any reference in this Part to the disclosure of information shall have effect, in relation to any case where the person receiving the information is already aware of it, as a reference to bringing the information to his attention.

(4) A disclosure is made "in good faith" where one of the purposes of the worker in making it is so that the relevant failure can be considered and addressed and he does not have a predominant malicious purpose.

iii) Alternatively- good faith should be defined as where the purposes of the worker in making the disclosure is in the public interests.

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If amended, the sub-section would read

43L. – (1) In this Part-

"qualifying disclosure" has the meaning given by section 43B;

"the relevant failure", in relation to a qualifying disclosure, has the meaning given by section 43B(5);

(2) In determining for the purposes of this Part whether a person makes a disclosure for purposes of personal gain, there shall be disregarded any reward payable by or under any enactment.
(3) Any reference in this Part to the disclosure of information shall have effect, in relation to any case where the person receiving the information is already aware of it, as a reference to bringing the information to his attention.

(4) A disclosure is made "in good faith" where the purpose of the worker in making it is so that the relevant failure can be considered and addressed and he does so in the public interest.

Amendment 6: gagging clauses

Section 43J

A positive requirement be placed on lawyers advising in the settlement of claims, that they advise claimants about their rights under the Public Interest Disclosure Act and that any gagging clauses are void.

Purpose

The case of Dr Kim Holt and Great Ormond Street Hospital [22] , and former inspectors at the Care Quality Commission [23] giving evidence to the Mid Staffordshire Inquiry highlight the need for greater attention to be drawn to section 43J of PIDA.

amendment 7: Allegations

Section 43L

After section 43L(3) include "(4) A disclosure of information shall include allegations."

Purpose

The case of Cavendish Munro v Geduld [24] has added to confusion for employers and workers as it means that where an individual states that there is a breach of health and safety this is not considered as a qualifying disclosure. Sections 43F, G and H already includes allegations.

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If amended, the sub-section would read

43L. – (1) In this Part-

"qualifying disclosure" has the meaning given by section 43B;

"the relevant failure", in relation to a qualifying disclosure, has the meaning given by section 43B(5);

(2) In determining for the purposes of this Part whether a person makes a disclosure for purposes of personal gain, there shall be disregarded any reward payable by or under any enactment.
(3) Any reference in this Part to the disclosure of information shall have effect, in relation to any case where the person receiving the information is already aware of it, as a reference to bringing the information to his attention.

(4) A disclosure of information shall include allegations.

AMENDMENTS 8 AND 9: REGULATORY DISCLOSURES

Section 1 PIDA / Section 43F ERA

Subsection 1(a) after "in good faith" insert "a statutory body or"

Subsection 1(b)(i) after "within" insert "the remit or enforcement powers of that body or"

Subsection 1(b)(ii) after "substantially true" insert ",or

(iii) he has suffered a detriment or been dismissed as a result of having previously made a disclosure of substantially the same information to his employer"

After subs 2 Insert a new subsection

"(3) For the purposes of this section a disclosure may be regarded as a disclosure of substantially the same information as that disclosed previously to his employer even though the subsequent disclosure extends to information about action taken or not taken by any person as a result of the previous disclosure."

Purpose

These amendments provide that a disclosure to a relevant statutory body will be protected whether or not it is prescribed. An amendment along these lines has been suggested by the DTI (as was) as it is administratively cumbersome to have to prescribe new regulators. The amendment includes not only regulators such as the HSE or FSA but also the relevant local authority enforcement authorities. The amendment does not, however, remove the power to prescribe persons as this is something HMG may wish to use (e.g. in 1997/8 the minister Ian McCartney MP suggested union officials might be prescribed at some point).

The new s. 43F(1)(b)(iii) and the new s. 43F(3) make it clear that a disclosure to a regulator of substantially the same information as he has disclosed to his employer shall be protected where the worker has been victimised for that internal disclosure without him having to satisfy any higher evidential test. The new s. 43F adopts the same approach to ‘substantially the same information’ as in s. 43G(4). These amendments, coupled with s. 43J on gagging clauses, helps reduce the risk (increased by the abolition of the register of applications) that an employer might seek to ‘buy-off’ an employee who has been victimised for having made an internal disclosure.

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If amended, the section would read

43F. – (1) A qualifying disclosure is made in accordance with this section if the worker-

(a) makes the disclosure in good faith to a statutory body or a person prescribed by an order made by the Secretary of State for the purposes of this section, and

(b) reasonably believes

(i) that the relevant failure falls within the remit or enforcement powers of that body or within any description of matters in respect of which that person is so prescribed, and

(ii) that the information disclosed, and any allegation contained in it, are substantially true, or

(iii) he has suffered a detriment or been dismissed as a result of having previously made a disclosure of substantially the same information to his employer.

(2) An order prescribing persons for the purposes of this section may specify persons or descriptions of persons, and shall specify the descriptions of matters in respect of which each person, or persons of each description, is or are prescribed.

(3) For the purposes of this section a disclosure may be regarded as a disclosure of substantially the same information as that disclosed previously to his employer even though the subsequent disclosure extends to information about action taken or not taken by any person as a result of the previous disclosure.

AMENDMENT 10: Lawyer-client confidence / privilege

Section 1 PIDA / section 43B ERA

Subsection (4) after "disclosure if" insert "(a)" and

at end insert "and (b) that disclosure was in breach of that privilege or confidentiality"

Purpose

This is a drafting amendment. PIDA does not protect disclosures by workers (primarily in law firms) of information that is subject to legal professional privilege. As the provision was drafted, it unwittingly denied PIDA protection not only where the worker made a disclosure in breach of that privilege but where he raised the concern with a senior colleague in his law firm or with the client. In these two cases though the information is privileged, such communication would not be a breach of the privilege or confidentiality and so there is no reason to deny the protection.

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If amended, the sub-section would read

(4) A disclosure of information in respect of which a claim to legal professional privilege (or, in Scotland, to confidentiality as between client and professional legal adviser) could be maintained in legal proceedings is not a qualifying disclosure if (a) it is made by a person to whom the information had been disclosed in the course of obtaining legal advice and (b) that disclosure was in breach of that privilege or confidentiality.

AMENDMENT 11: Burden of proof for worker

Section 1 PIDA / Section 43L ERA

Insert in 43L(1) after "section 43B(5)", the following

"likely to" in section 43B includes where the risk is such that a reasonable employer would want to know of the relevant failure;

Purpose

This first amendment to s. 43L(1) makes clear that a worker does not have to prove that it is more probable than not that the crime or danger will occur to be entitled to PIDA protection. Where the risk is such that a reasonable employer would wish to know of it, then the worker should be PIDA protected for raising the concern.

43L. – (1) In this Part-

"qualifying disclosure" has the meaning given by section 43B;

"the relevant failure", in relation to a qualifying disclosure, has the meaning given by section 43B(5);

"likely to" in section 43B includes where the risk is such that a reasonable employer would want to know of the relevant failure;

(2) In determining for the purposes of this Part whether a person makes a disclosure for purposes of personal gain, there shall be disregarded any reward payable by or under any enactment.
(3) Any reference in this Part to the disclosure of information shall have effect, in relation to any case where the person receiving the information is already aware of it, as a reference to bringing the information to his attention.

AMENDMENT 12: DISCLOSURES TO A TRADE UNION REPRESENTATIVE

43D.
A qualifying disclosure is made in accordance with this section if it is made in the course of obtaining legal advice.

(1A) A qualifying disclosure is made in accordance with this section if it is made to a trade union representative.

June 2012