But make sure you know your rights, says Tara Cosgrove, partner at Beale and Company
Whistle-blowing is high on the business agenda following a number of spectacular collapses, including Enron's, and a renewed focus on corporate malpractice. For reputational and financial reasons, your employer should take whistle-blowing seriously.

Potential whistle-blowers and employers should know their rights. The Public Interest Disclosure Act (commonly called the "Whistle-blowers Act") came into force on 2 July 1999. The act applies to employees, workers, contractors, consultants and apprentices, but not to the genuinely self-employed.

The act permits the making of certain kinds of limited disclosures, known as qualifying disclosures. They relate to situations where:

  • A criminal offence has been or is being or is about to be committed (for example, fraud)
  • An employer is failing to comply with its legal obligations
  • A miscarriage of justice has happened or is likely to happen
  • An individual's health and safety has been jeopardised or is likely to be
  • The environment is being, or is likely to be, damaged
  • Information relating to the other categories is being or is likely to be deliberately concealed.

Disclosures can be made to an employer, which would be the preferred route as employers are best positioned to deal with the issues. Alternatively they can be made to a legal adviser, or, depending on the information to be disclosed, to certain named organisations other than the employer, such as the director of the Serious Fraud Office or the Health and Safety Executive, where it is reasonable to do so.

The disclosure need not be true provided the person making the disclosure reasonably believes it is true and makes the disclosure in good faith. Employees are protected from victimisation and detriment, including unfair dismissal, if they make disclosures in accordance with the act. There is no length-of-service qualification for employees who wish to make claims and no limit on damages that can be paid to them for detrimental treatment. Awards in cases to date have been substantial, with a number over £200,000.

Employers should therefore have a well thought out and practical whistle-blowing policy in place under which employees are encouraged to make their concerns known by way of internal disclosures in the knowledge that their concerns will be taken seriously and that there will be no risk of reprisal. Having this policy will not only encourage a culture of internal disclosure but should assist in the prevention of fraud and embarrassing external disclosure.

Putting such a policy into practice within your organisation may also assist in tenders, as clients and, in particular, government agencies are frequently looking to deal with companies that are seen to conduct business ethically with zero tolerance in respect of fraud and malpractice.