This article was first written for and published in City AM

If the reports of irregular payments by the defence contractor EADS turn out to be true, Ian Foxley’s name will soon stand alongside that of the former Olympus chief executive Michael Woodford. Whistleblowing is the name of this game, but what are the lessons for employees that want to spill the beans?

The City has been hit with a raft of regulation since the financial crisis. We have also seen a more aggressive approach by the Serious Fraud Office (which has not always been successful – just ask the Tchenguiz brothers). This is fertile ground for whistleblowers, but potentially problematic for employers.

After all, not all whistleblowers have a valid case. Whistleblowing has always been high on the agenda of those leaving jobs without the length of service required for an unfair dismissal claim. And spurious claims are rife, as some whistleblowers try to extract money without just cause. However, new regulation proposed by the government would remove many specious opportunities, as the requirement for there to be a public interest, rather than solely a private interest element in any disclosure, will be emphasised.

This legislation will leave the public-spirited, genuine whistleblower free to act, and we can expect to see many more whistleblowing cases in the City. It would be surprising if the fixing of Libor turns out to be the only activity waiting to be exposed.

Whistleblowing requires the disclosure of wrongdoing, in good faith, to the employer or a small number of other prescribed persons. Protection against detriment – for example dismissal – on the grounds of the disclosure, automatically attaches to the whistleblower. Compensation is loss-based, but unlimited. If the whistleblower is, like Woodford, a very senior executive with a bonus and share option rights, and whose marketability is highly likely to be adversely affected by the publicity, very large sums can be awarded.

But what should a prospective whistleblower do? Getting hold of your employer’s whistleblowing policy is essential, as is ensuring that your disclosure is made to the correct person – not necessarily your employer. A disclosure incorrectly made will not confer protection.

But anyone faced with this predicament should first consider whether to blow the whistle at all. Legal protection against detriment is all well and good, but analysing objectively whether to raise one’s head above the parapet is the preliminary step. Almost irrespective of the outcome, a whistleblower’s career can be adversely affected. The prize, whether financial or moral, has to be worth the price.

Back in the 1970s, Stanley Adams, a pharmaceutical industry whistleblower, shopped Hoffmann–La Roche to the authorities for price-fixing. Although the company was fined, Adams was imprisoned when his identity was revealed. He never worked in the industry again after an inexcusable breach of confidence by the authorities.

Thankfully, we now live in more enlightened times. But speaking out will never be a one-way bet.

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