Whistleblowing in charities: legislative change may be on the horizon - but get the basics right now
The importance of whistleblowing to a charity’s culture and mission
This February, in advance of a conference we convened on whistleblowing in charities, we explained why this topic is so important to the charity sector Whistleblowing in charities: why it is so important – right now (shoosmiths.co.uk)
Charities have goodness in their DNA: they are defined as organisations that advance exclusively charitable purposes for public benefit, and charity trustees’ fundamental duty, as those with ultimate responsibility for the way their organisations are run, is to act in the best interests of their charity’s purposes – which overrides protecting an institution for its own sake.
Principle 7 of the Charity Governance Code is “openness and accountability.” Making accountability real, through genuine and open two-way communication that celebrates successes and demonstrates willingness to learn from mistakes, helps to build trust and confidence and earns legitimacy.
Many charities value a healthy speak up culture – a safe alternative to silence – using it to drive continual improvement, leading to their organisations doing good, even better.
And whistleblowing disclosures help the Charity Commission to detect serious problems such as fraud, safeguarding concerns and mismanagement in charities and so play a valuable role in its regulation of the charity sector.
This is why many charities and the commission will listen to concerns from anyone involved in the running of a charity, in particular from trustees and other volunteers, who are not at present covered by the definition of “worker” within the legislation introduced into the Employment Rights Act 1996 by the Public Interest Disclosure Act 1998 (“PIDA”).
At the same time, the commission is not a complaints service, nor an ombudsman. It cannot guarantee an individual a resolution to their concern. It is looking at the whole picture and does not get involved in employment matters unless those reveal evidence of wider governance failings. Rather it is focused on whistleblowing which is indicative of high risk of harm within charities – to people, money, property and reputation.
So (via a third party) the commission provides people connected with charities who have concerns about them a free-of-charge and confidential whistleblowing helpline service which is run by the whistleblowing charity, Protect.
Calls for legislative reform to the whistleblowing framework
For years Protect and others, in particular the not-for-profit organisation Whistleblowers UK, have campaigned for change to whistleblowing legislation. Protect wants an extension of the scope of the law, including to ensure protection for all those who raise concerns in a work-related context, such as volunteers and people in training. They also want to increase the kinds of concerns that can be considered “whistleblowing” to include breaches of the employers’ policies and mismanagement of public funds and to establish an independent Whistleblowing Commissioner to ensure concerns are acted upon and to promote good corporate governance and the normalisation of whistleblowing.
Whistleblowers UK (“WBUK”) would go further, scrapping PIDA, because they consider it has failed in its objectives, and replacing it with an Office of the Whistleblower (“OWB”). WBUK highlight that the legislation provides the basis for adjudicating on the breakdown of the relationship between an employer and a ‘worker’ and awards compensation for any ‘detriment’ suffered, but that only 4% of these cases succeed and in 24 years there has been no evidence that the Employment Tribunal has escalated a single case to the CPS or police or regulator, which it assumes has resulted in many crimes going undetected for years.
Since 2014 WBUK have developed and championed the campaign for an Office of the Whistleblower, which would “provide protection for every citizen, ensure that concerns are investigated and that those responsible are held to account”. WBUK support Baroness Kramer's Protection of Whistleblowing Bill, a private member’s bill which is currently being considered in Parliament.
Whistleblowing Awareness Week 2023 and Department for Business & Trade review
In late March, the All Party Parliamentary Group and WBUK launched Whistleblowing Awareness Week at the Palace of Westminster. There was a busy agenda covering various topics such as a roundtable discussing the merits of the proposed Office for the Whistleblower and a conference on the future of whistleblowing – challenging people to change the way we think about whistleblowing.
And then the following week, on 27 March, the Department for Business & Trade (“DBT”) announced terms of reference for a review of the whistleblowing framework.
The review will not gather evidence on reporting channels and protections where there is no workplace relationship, for example, in business transactions, journalists, witnesses or third parties (although it will examine evidence related to the definition of worker for whistleblowing protections).
WBUK are concerned that the announced review appears to look to contain any amendments within existing law and so they intend to lead calls to extend the scope of the research to include the introduction of an independent Office of the Whistleblower and a commitment to the repeal of PIDA. They consider there is overwhelming support from whistleblowers, the public and regulators for legislation that not only takes whistleblowing out of employment tribunals but gives every citizen more protection.
The announced government review will provide an up-to-date evidence base to inform government about policy choices to develop and improve the whistleblowing framework.
Among the questions it will address are:
- how the whistleblowing framework has facilitated disclosures and protected workers;
- whether whistleblowing information is available and accessible for workers, employers, prescribed persons and others;
- what have been the wider benefits and impacts of the whistleblowing framework, on employers, prescribed persons and others; and
- what best practice looks like in responding to disclosures.
Although the research is to be concluded by Autumn this year it is unclear whether and when any recommendations for legislative change would be made or even acted upon.
What does best practice look like for whistleblowing in charities?
In the meantime, charities should continue to focus on this last point of what best practice looks like in response to disclosures. In 2020 Protect undertook a Third Sector pilot assessing whistleblowing standards, with 20 major charities completing a benchmark through self-assessment. Among the challenges charities voiced were staff not feeling supported and employers not seeking feedback from those who had made a disclosure after they had done so.
While 62% of the participating charities had appointed a whistleblowing champion, 90% had appointed a whistleblowing team and 100% had a whistleblowing policy, 86% did not train accountable personnel, 90% did not train line managers on their role and only 5% reported capturing feedback from whistleblowers. Too many charities have no idea whether their staff have confidence in their whistleblowing arrangements and do not seek feedback from those who have raised concerns.
This is very important for charities because employers can be vicariously liable for the acts of their staff and it may be difficult for the employer to run the only defence – that it took all reasonable steps to prevent detrimental treatment of whistleblowers. Also, whistleblowers can name individual co-employees as respondents and those individuals could be personally liable for detrimental treatment.
This means everyone in a charity needs to be able to recognise a protected disclosure and to be able to act on it, if only to escalate it within the organisation in accordance with an implemented whistleblowing policy.
The stakes can be high if a charity employee or worker brings a whistleblowing claim because the potential damages are unlimited. Even if the worker remains with the charity, claims for damages for injury to feelings could be tens of thousands of pounds.
Charities should also remain mindful of the data privacy issues which can arise following a protected disclosure, including:
- If as employers they are allowing anonymised disclosures then they need to make clear to employees that their ability to follow up such disclosures will be curtailed;
- the possibility of a data subject access request (“DSAR”) by a whistleblower - released information should be suitably redacted to protect the personal data of other individuals;
- whistleblowers should not always be given full details of the outcome of a whistleblowing investigation: for example, details of the outcome of disciplinary proceedings against others would reveal the personal data of those individuals.
Charities should bear in mind the advantages of seeking legal advice at any early stage, not only because “a stitch in time saves nine”, but also to secure the protection for communications which are covered by legal advice and litigation privilege.
We will report back on the whistleblowing review when more details become available.
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