Environmental whistleblowing – is your business prepared?

This article explains the protection for whistleblowers under the Employment Rights Act and points out a new reporting portal and toolkit. We also highlight employment tribunal cases relating to environmental whistleblowing and advise on the steps that businesses can take to protect themselves.
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Protection for whistleblowers

The Public Interest Disclosure Act 1998 amended the Employment Rights Act 1996, providing protection for workers reporting malpractices by their employers or third parties against any form of victimisation or dismissal. Then in 2013, the Enterprise and Regulatory Reform Act further amended the 1996 Act and introduced liability for co-workers and the resulting vicarious liability for employers. As a result, Employment Rights Act provides a number of ways in which a whistleblowing claim may be founded.
 
There are two levels of protection for whistleblowers under the Employment Rights Act:

  • The dismissal of an employee will be automatically unfair if the reason, or principal reason, for their dismissal is that they have made a ‘protected disclosure’.
  • Workers are also protected from being subjected to any detriment on the ground that they have made a protected disclosure.

Whether a whistleblower qualifies for protection depends on them satisfying the following tests:

  1. Have they made a qualifying disclosure? There are a number of requirements to be a qualifying disclosure:
    • Disclosure of information - the worker must make a disclosure of information. Merely gathering evidence or threatening to make a disclosure is not sufficient.
    • Subject matter of disclosure - the information must relate to one of six listed types of failure, wrongdoing or malpractice.
    • Reasonable belief - the worker must have a reasonable belief that the information tends to show one of the relevant failures.
  2. In the public interest? The worker must have a reasonable belief that the disclosure is in the public interest.
  3. Is the qualifying disclosure protected? The disclosure must also be a protected disclosure, which broadly depends on the identity of the person to whom the disclosure is made. The legislative framework encourages disclosure to the worker’s employer (internal disclosure) in the first instance. Disclosure to third parties (external disclosure) may be protected if more stringent conditions are met. Disclosures to a ‘responsible’ third party or a ‘prescribed person’ are likely to gain protection relatively easily. However, wider disclosures, such as to the police or to the media, will only qualify in very limited cases.

There is no financial cap on compensation in whistleblowing claims and no requirement for a minimum period of service. These factors often mean that, in practice, workers and employees tactically prefer to bring a whistleblowing claim rather than another type of claim, and the link between a particular complaint and a protected disclosure may sometimes be tenuous.

A new reporting portal and toolkit launched for environmental whistleblowing

The Environment Agency is responsible for protecting and improving the environment and promoting sustainable development in England, these functions are performed by Natural Resources Wales in Wales. Natural Resources Wales has its own whistleblowing reporting procedures, whereas the Environment Agency, recognising the role of whistleblowing in the fight against environmental damage, recently launched a whistleblowing portal. Any environmental whistleblowing report must be in the public interest and involve serious environmental damage regarding a company.

This portal is available to employees who work for a:

  • Water company  
  • Waste company  
  • Nuclear company  
  • Fisheries business  
  • Farm or agricultural business  
  • Chemical industry 
  • Business causing an impact on the environment
  • Business regulated by the Environment Agency

Under the Prescribed Persons (Reports on Disclosures of Information) Regulations 2017, the Environment Agency must act on any third-party disclosures made to us about environmental malpractice. These regulations also require the agency to produce and publish an annual report on whistleblowing disclosures they receive.

The agency reports that during the period of 1 April 2022 to 31 March 2023, it received 15 disclosures which were identified as potentially whistleblowing matters on initial assessment. Two of those, on further assessment, were identified as being from employees reporting matters in accordance with their employers’ permit conditions. They were therefore not qualifying disclosures and were dealt with as incident reports.

Of the 13 remaining reports, nine were with regards to alleged breaches of waste related permit conditions:

  • 2 in regard to illegal waste deposits and burning of waste.
  • 1 in regard to water pollution.
  • 1 in regard to illegal discharge of liquid waste.

Protect, a whistleblowing charity, has published a comprehensive toolkit to encourage workers to raise environmental concerns. Protect collaborated with trade unions, non-governmental organisations and regulators, such as the Prudential Regulation Authority (part of the Bank of England), to publish the toolkit.
 
The toolkit includes information on what may constitute an environmental concern, practical guidance on how and where to raise environmental concerns and information on available legal rights when raising environmental concerns. 

Environmental whistleblowing - employment tribunal cases

To date, there have been very few employment tribunal cases where it was argued that the concern raised fell within the ‘environmental damage’ category under section 43B(1)(e) of the Employment Rights Act. In other words, it was the worker’s reasonable belief that the environment has been, is being or is likely to be damaged, or information tending to show this has been, is being or is likely to be deliberately concealed.

Two examples are:

  • Wharton v Ward Recycling Ltd case - the claimant worked in recyclable material collections and made ‘protected disclosures’ regarding what he believed to be the burying of recyclable paper at his employer’s depot, the claimant ultimately won his whistleblowing unfair dismissal claim.
  • Mr M Wakefield v Adomast Manufacturing Ltd case – the claimant worked in sales for a chemicals manufacturer and raised concerns about potential environmental damage caused by waste and overspill from interceptor tanks on his employer’s land. It was accepted by his employer that he had made protected disclosures but, in this case, the tribunal found the claimant was dismissed for reasons other than whistleblowing.

The employment tribunal is keen to make an example of individuals who subject co-workers to a detriment and find in favour of a claimant where the detriment results from a protected disclosure. Compensation in detriment claims is not limited and is based on what the employment tribunal considers to be 'just and equitable in all the circumstances', and can also include compensation for injury to feelings as well as unlimited loss of earnings.

What steps can businesses take to protect themselves?

Employers should ensure that senior managers and other appropriate individuals have been adequately trained on whistleblowing in the workplace, and that they are aware of the rights of individuals who make a protected disclosure. This will hopefully avoid both the employer and the individual being faced with potential whistleblowing claims. 

When making a decision to dismiss, care should be taken to make clear the reason for the dismissal, demonstrating that it is in no way connected with any potential protected disclosure.

The Companies Act 2006 places an obligation on company directors to act in good faith to promote the success of the company and in doing so to ‘have regard’ for the impact of the company’s operations on the community and environment, as well as the likely long-term consequences of any decision. 

The act also requires directors to exercise reasonable care, skill and diligence in respect of their duties. Consideration should be given as to whether director and officers liability insurance is required, and existing policies should be reviewed to ensure that liability for detriments in these circumstances is covered.

For more information or advice, please contact the business risk and regulation team.

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