Blowing through whistle-blowing.
| Position | Technical Notes |
It is an absolute that accountants are required to comply with reporting standards. If they are directed to present information that is at variance with those standards, with a likelihood of fraud, crime or misrepresentation, they must consider making a public interest disclosure, aka whistle-blowing. The purpose of this article is to show the legal position in simple terms, broadly discuss the outcomes and suggest remedies.
There is anecdotal evidence that, in making a public interest disclosure (PID), accountants put their career on the line through a tendency to "shoot the messenger". In taking such a decision, they need clarity as to whether the law will support them if they experience a detriment.
If one thing is certain it is that clarity is somewhat lacking in this legal minefield. For example, current case law surprisingly does not accept third-party pressure for variation from CIMA ethical standards as having relevance in supporting the making of a PID.
The legal position
The purpose of the Public Interest Disclosure Act (PIDA) 1998 is:
"To protect individuals who make certain disclosures of information in the public interest; to allow such individuals to bring action in respect of victimisation; and for connected purposes."
And to protect those who did so.
The Act offers protection from dismissal and victimisation to workers who raise genuine concerns about "malpractice" in the workplace. This protection forms part of employment legislation, but the PIDA has a far broader underlying purpose than the extension of employees' rights to protection from victimisation. It is seen as a valuable tool to promote openness and good governance.
Statutory protection provides that a disclosure, made by a whistle-blower to their employer, is protected. The disclosure must be one that the whistle-blower "reasonably believes" shows the likelihood of a criminal offence, a failure to comply with legal obligations, a miscarriage of justice, danger to the health and safety of employees, damage to the environment, or the hiding of information that would show any of the above actions. These disclosures do not have to be of confidential information, and this section does not abolish the public interest defence; in addition, it can be the disclosure of information about actions that have already occurred, are occurring, or could occur in the future. An employee will be protected if s/he "makes a disclosure in good faith" to a "responsible person", and...
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