The UK Government is in the process of making important changes to UK whistleblowing legislation (which will be implemented through the Enterprise and Regulatory Reform Bill).  The key changes, which are expected to come into force in April 2013, are as follows.

The “Public Interest” Requirement
UK protection for whistleblowers was introduced under legislation called the Public Interest Disclosure Act.  This name suggest that whistleblowing legislation was only intended to protect workers in relation to disclosures made in the public interest.  However, as case law developed, it was held that despite the name of the legislation, there was no requirement for a disclosure to be in the public interest for it to be protected.  The high water mark of this position was illustrated by the case of Parkins v. Sodexho, where it was held that disclosing a breach of any legal obligation (including a mere breach of a contract of employment), even where such disclosure was not in the public interest, was capable of constituting a protected disclosure. 

The broad scope of protected disclosures, especially in the context of the underlying “public interest” title of original statute, has attracted criticism.  Accordingly, the legislation is to be amended so that for a disclosure to be protected, it must be in the reasonable belief of the worker that their disclosure is made in the public interest.   This is a welcome change for businesses, who have until now been susceptible to whistleblowing claims arising out of the most trivial disclosures.  Nonetheless, it remains to be seen how the courts will interpret the scope of public interest.

The “Good Faith” Requirement
In conjunction with the new “public interest” requirement, a further proposed amendment to UK whistleblowing legislation to remove the current requirement that for a disclosure to be protected, it must be made in “good faith.”  Under the new proposal, where a disclosure is not made in good faith, rather than the claim necessarily failing (as is the case now), there will be a power to reduce any compensation by up to 25%.  On the surface this change is counterintuitive – there would appear to be good policy reasons for requiring disclosure to be made in good faith   However, the rationale behind this proposal is that in the context of the new public interest requirement, having an addition requirement of good faith would serve as too great a deterrent against individuals making disclosures, and that moreover, given the new public interest requirement, a disclosure, even if made in bad faith, should not necessarily be unprotected if it is in the public interest. 

New Definition of “Worker”
The final change being proposed to whistleblowing law is to expand the scope of those protected by the legislation.  At present, the protection is afforded to “workers” a category larger than employees, which includes agency workers, non-employees undergoing training or work experience and homeworkers.  However, the changes to this definition will largely apply to contractors in various parts of the National Health Service who would not otherwise be “workers,” and seems to be in response to structural changes within the UK’s National Health Service.  It is noteworthy that despite the broad definition of worker, a recent Court of Appeal decision in January 2013, Clyde and Co. LLP v. Bates Van Winkelhof, held that a partner in a law firm was not a worker within the meaning of the legislation and therefore not protected by whistleblowing legislation.

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Photo of Lloyd B. Chinn Lloyd B. Chinn

Lloyd B. Chinn is a partner in the Labor & Employment Law Department and co-head of the Whistleblowing & Retaliation Group. He litigates employment disputes of all types before federal and state courts, arbitration tribunals (e.g., FINRA, JAMS and AAA), and before administrative…

Lloyd B. Chinn is a partner in the Labor & Employment Law Department and co-head of the Whistleblowing & Retaliation Group. He litigates employment disputes of all types before federal and state courts, arbitration tribunals (e.g., FINRA, JAMS and AAA), and before administrative agencies in New York and across the country. Lloyd’s practice ranges from litigating compensation disputes to defending whistleblower, discrimination and sexual harassment claims. Although he represents employers in a wide range of industries, including law, insurance, health care, consulting, media, education and technology, he focuses a substantial portion of his practice on the financial services sector. He has tried to final verdict or arbitration award substantial disputes in this area.

Due to Lloyd’s litigation experience, clients regularly turn to him for advice regarding the full range of employment matters, including terminations, whistleblower policy and procedure, reductions in force, employment agreements, and employment policies. For example, in the wake of the financial crisis, he has counseled a number of firms through reductions in force and related bonus and deferred compensation disputes. Lloyd has also been retained to conduct internal investigations of allegations of workplace misconduct, including claims leveled against senior executives.

Lloyd has represented global businesses in matters involving Sarbanes-Oxley and Dodd-Frank whistleblower claims. He has taken an active role in the American Bar Association on these issues, currently serving as Co-Chair of the Whistleblower subcommittee of the ABA Employee Rights and Responsibilities Committee. Lloyd has spoken on whistleblowing topics before a numerous organizations, including the American Bar Association, ALI-ABA, Association of the Bar of the City of New York, and New York University School of Law. He has testified twice before Congressional subcommittees regarding whistleblower legislation and has also published blog postings, articles and client alerts on a variety of topics in this area, including the Dodd-Frank Act’s whistleblower provisions. Lloyd is a co-editor of Proskauer’s Whistleblower Defense Blog, and he has been widely quoted by on whistleblower topics by a number of publications, including the New York Times, the Wall Street Journal, the National Law Journal and Law 360.

Lloyd has also become active in the International Bar Association, presenting on a variety of subjects, including: the #MeToo movement, the COVID-19 pandemic and employment law, and cross-border harmonization of employment provisions in transactions. Lloyd also hosts a quarterly roundtable discussion among financial services industry in-house employment lawyers. He has also published articles and given speeches on a variety of other employment-law topics, including non-solicitation provisions, FINRA arbitration rules, cross-border discovery, e-discovery, and the use of experts.