Fairness at Work Bill: Cash backing for staff who blow whistle

New legislation to protect employees against wrongful dismissal for exposing malpractice
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WORKERS SACKED for disclosing corruption or life-threatening practices by their employer will qualify for unlimited cash compensation under a "whistleblower's charter" to be announced by the Government.

Stephen Byers, Secretary of State for Trade and Industry, has decided to exempt whistleblowers from a new ceiling on payments to people who have been unfairly dismissed. The maximum compensation for other workers will rise from pounds 12,000 to pounds 50,000 under the Fairness at Work Bill, extending workplace rights, which is to be published today.

Mr Byers has decided that employees who expose malpractice deserve more protection than other staff. "We are talking about brave people who risk their entire careers by speaking out," a government source said last night.

The move will allow employment tribunals to order companies to pay unlimited compensation to a whistleblower who acts in the public interest. Ministers hope this will encourage workers to speak out.

The decision represents a U-turn by the Government, which had previously rejected Tory demands to remove the "cap" on the payments to try to make highly paid employees more likely to reveal corruption.

Mr Byers will announce shortly that the Public Interest Disclosure Act, which was passed by Parliament last year, will take effect in March. It was introduced as a private member's Bill by Richard Shepherd, a Tory backbencher, but won the Government's backing.

The measure will protect workers from recriminations by their employers when, acting in good faith and in the public interest, they report actual or suspected wrongdoing. It will apply to most individual employees, including agency workers and homeworkers, though not to self-employed professionals such as accountants and voluntary workers or in the police, the armed forces and the security services.

For disclosures to be protected, the worker making them will need to have a "reasonable belief" that a crime or miscarriage of justice had taken place or was likely to take place, or that a legal obligation was likely to be infringed.

In cases of "exceptionally serious failure" there would be no requirement for a worker to raised the concern internally before passing information to a third party such as the media.

The Institute of Directors has suggested that a whistleblower has a more than a four-in-five chance of being sacked if he or she is identified. Few whistleblowers have the money or the stamina to fight wrongful dismissal before an industrial tribunal alone. Even in successful cases, pay-outs have been derisory and whistleblowers left blacklisted.

Analysts have estimated that fraud alone may cost British companies about pounds 15bn a year - 5 per cent of turnover.

Stanley Adams

He helped to uncover price-fixing by his employer, Hoffman La Roche, a Swiss-based multinational drugs company, in 1973. His anonymous testimony led to Roche being fined pounds 215,000 by the European Court. He was charged under Swiss law with giving away economic secrets to a foreign power, bailed, and fled to England. The EC later awarded him compensation.

Paul van Buitenen

A Dutch auditor working for the European Commission, he claimed earlier this month that Brussels has covered up huge multi-million pound frauds and blocked inquiries into financial irregularities involving huge sums of taxpayers' money. He was suspended for four months on half pay for allegedly breaking commission rules by handing over the information.

Stephen Bolsin

Dr Stephen Bolsin exposed high mortality rates among babies who received heart operations at Bristol Royal Infirmary. Out of 53 babies operated on by two doctors between 1988 and 1995, 29 died and four suffered brain damage. Surgeons James Wisheart and Janardan Dhasmana were found guilty of serious misconduct. Dr Bolsin emigrated to Australia.

Ian Hopkins

The head of treasury and risk at Barings at the time of the bank's collapse in 1995, when Nick Leeson, the Singapore-based trader, ran up losses of more than pounds 800m through unauthorised trading, told the Commons Treasury select committee investigation into the affair in 1996 that his attempts to warn more senior executives about potential problems had gone unheeded.