Spotlight on PIDA and Whistleblowing in the UK

PIDA is the law protecting whistleblowers in the UK and it came into force on 2 July 1999.

Andrew Breakwell

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Compared to many other countries, the UK has proven a trailblazer when it comes to laws protecting whistleblowers. PIDA, its current legislation, is an amendment to the Employment Rights Act 1996 and it came into force on 2 July 1999.

It protects employees who speak out about corporate wrongdoing against retribution from their employer. Whistleblowing rights under PIDA are day one rights which means that the worker or employee can file a legal claim from the first day of their employment which differs from other employment laws that require at least two years’ service.  

Illustration two persons talking about a UK whistleblowing law

Background

Although whistleblowers in the UK could avoid being sued for breach of confidence through a public interest defence, they had no protection against retaliation and dismissal by their employer before PIDA came into effect. The creation of the legislation was largely driven by a series of financial scandals and health and safety-related accidents that could have been prevented by allowing employees to speak up. 

That outcome resulted in a heightened interest in whistleblowing that saw two protection bills enter Parliament 1995 and 1996. Although both fell through, Richard Shepherd’s similar bill received support on the condition that it became part of the Employment Rights Act 1996. Introduced to the House of Commons in 1997, it moved to the House of Lords in 1998 before coming into force at the beginning of 1999.  

Who does PIDA protect?

Protection applies to both employees and ‘workers’ with the latter group entailing many types of employment relationships and working arrangements under section 43K of the Employment Rights Act 1996. This extends whistleblower protection to agency workers, contractors, homeworkers, certain NHS practitioners, nurses and midwives in training, trainees, police officers and crown employees.  

There are certain groups that are not covered by PIDA and these include the genuinely self-employed, trustees, volunteers, non-executive directors, etc.

What concerns can employees raise?

To qualify for protection under PIDA, the person speaking up has to make what is termed a “protected disclosure” which has three primary elements:  :  

PIDA and the EU Whistleblowing Directive

Strictly speaking, the UK is no longer under a legal obligation to implement the EU Whistleblowing Directive following its departure from the European Union. Nevertheless, the Directive remains highly relevant for organisations with wider EU operations and much of it is already contained within existing UK law. There are some differences, however, as outlined below: :    

Given that the UK implemented its whistleblower protection law more than two decades ago, UK companies are actually in a better position to fulfill the requirements of the EU Whistleblowing Directive than many of their continental counterparts. According to the Whistleblowing Report 2021, some 73% of UK companies utilise a whistleblowing system compared to 63.4% in Switzerland, 63.2% in Germany and just 54.1% in France.  

That figure was even higher among large businesses with 250+ employees+ at 74.2%. UK companies were also found to have had their whistleblowing systems in place for far longer than many other countries. Even though it is highly unlikely that the UK will directly implement the EU Directive, the same report found that 17.1% of companies meet all of its requirements. Again, this is ahead of Germany (14.1%), Switzerland (5.8%) and France (5.5%). 

Criticism

Despite the fact that much of the EU Whistleblowing Directive is already enshrined in UK law, PIDA has some shortcomings. It has been criticised for not forcing employers to implement a policy regarding disclosures while it also fails to prevent organisations from blacklisting or refusing to hire people who spoke out in their previous jobs. The legislation has also been judged as being out of date and overly complex while volunteers and the self-employed are not among those afforded protection. In addition, it does not make a provision for psychological harm which is common among those blowing the whistle. Given these weaknesses, the UK is seeking to overhaul PIDA and re-establish itself at the forefront of global whistleblower protection. 

Future steps

As part of the above process, two new bills entered parliament. The Public Interest Disclosure (Protection) Bill failed but the second – the Office of the Whistleblower Bill – is still active. It would require the government to establish an Office of the Whistleblower which would be responsible for the administration of arrangements to facilitate speaking up. It would have the following powers:  

Conclusion

PIDA was a trailblazing law for its time but given that more than 20 years have passed since its introduction, calls to either overhaul or replace it are growing ever louder. Despite its weaknesses, however, its positive impact remains indisputable.  

As well as being one of the first comprehensive whistleblower protection laws in Europe, PIDA helped drive the implementation of effective whistleblowing systems forward in the UK. That has seen organisations in the UK outpace their peers in continental Europe in the race to be prepared for the introduction of the EU Whistleblowing Directive (which remains relevant for UK companies with EU operations as mentioned earlier). 

Nevertheless, reform is clearly needed, and the new bill should significantly enhance the country’s levels of whistleblower protection if it makes it through parliament and into law.  

Whistleblowing Report

A comprehensive study on whistleblowing in European companies

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Andrew Breakwell

Andrew Breakwell

Commercial Director UK | EQS Group
Andrew has been supporting compliance, ethics and risk professionals internationally for over 25 years, with a particular focus on integrated risk management and compliance software solutions and associated consulting and advisory services.