‘Demobilizing Effects’: Old Laws, New Laws, Old Problems

Sybille Raphael

Sybille Raphael, legal director of the UK’s leading whistleblower advocacy NGO Protect

As whistleblower protection laws around the world continue to be put to the test, society learns more about which of these laws succeed or fail – and why. Here is a wrap-up of recent developments and findings.

UK NGO Opposes Replacing Broken Whistleblower Law

Despite the well-documented weaknesses of the UK’s 24-year-old whistleblower protection law, one of the country’s whistleblower NGO has come out against replacing it.

Sybille Raphael, legal director of the UK’s leading whistleblower advocacy NGO Protect, wrote that the Public Interest Disclosure Act (PIDA) “can no doubt be improved” but that none of the law’s many problems “calls for a repeal.” Andrew Pepper-Parsons, Protect’s head of policy, told WNN that PIDA “as it stands is flawed” for reasons including being “silent on what an employer should put in place [for employees] in terms of resources.” However, he said, “reforming the law rather than repealing the whole thing is the most sensible way to proceed.”

Writing “in defence of PIDA,” Raphael said the law’s whistleblower reporting system, which strongly encourages employees first to approach managers, “works in practice.” Pepper-Parsons agreed, saying PIDA “is effective in recognising that most whistleblowers want to raise their concerns with their employer.”

Research shows, however, that reporting corruption and other misconduct to supervisors and managers can be perilous. In a survey of 1,000 employees by Protect (then known as Public Concern at Work), 60 percent of people who made an internal report received no response of any kind. For people who did get an answer, the most common responses were dismissal, demotion, suspension or disciplinary action.

Raphael added that PIDA “gets very little criticism from employers.” Pepper-Parsons said “employment laws are stronger with the backing of employers for them to be workable. This to our mind is a strength not a weakness.”

Given PIDA’s poor track record in protecting workplace whistleblowers from retaliation, it is not surprising that employers would have few complaints with the law.

Only 17 percent of employees who were fired after reporting wrongdoing won their unfair dismissal cases in 2019, according to an analysis by the European Center for Whistleblower Rights. The study was based on a review of 115 PIDA cases published in 2019 by UK Employment Tribunals. The average PIDA case took 16 months to conclude, with one case lasting six years. The average compensation for people who won their cases was £28,010 – slightly less than the average one-year salary in the UK.

Raphael acknowledged that “a wait of approximately 2 years before [a] case will be decided…is far too long.” Yet, she wrote that “you cannot measure the success of the law by how many [fired whistleblowers] succeed in tribunal.”

Similarly, 17 percent of people won their PIDA cases in 2018, according to a study by the International Bar Association (IBA).

UK Employment Tribunals have ruled against many employees even while acknowledging they met the legal definition of “whistleblower,” were acting in the public interest, and were unfairly dismissed, the European Center for Whistleblower Rights has found. Some judges acknowledged a connection between the whistleblowing and the dismissal, yet still ruled against the employee.

Pepper-Parsons said the success rate in Tribunals last year was even lower – 3 percent, according to UK government statistics. He says, however, that using the won-loss record of employees in Tribunal hearings “as a means of judging the success of PIDA is flawed without context.” He said a 3 percent success rate is “not out of line” with other labor laws in the UK, including the anti-discrimination law, and that “many strong claims” are settled before reaching a hearing, including one-third of cases in 2021.

Meanwhile, other whistleblower NGOs and anti-corruption activists are working to repeal and replace PIDA. The leading effort is being headed by WhistleblowersUK and several members of the Parliament, including Mary Robinson. This past April 26 Robinson introduced a bill to replace PIDA with a new law that meets the many European and international standards developed since PIDA was passed in 1998. WhistleblowersUK serves as the secretariat for a parliamentary group pushing for the new law.

‘Troubling’ UK Retaliation Ruling

Less than a month after Protect said PIDA should not be repealed, a UK court ruled against a whistleblower in a decision that provides further evidence of the law’s ineffectiveness.

The head auditor at Gulf International Bank UK Ltd was fired in 2018 after telling the bank’s legal director that a lending tool was being improperly used and could present a compliance problem. The legal director disagreed with the auditor, “became agitated,” walked out of the auditor’s office and slammed the door.

The bank is an affiliate of the Bahrain-based Gulf International Bank, whose largest stockholder is Saudi Arabia’s sovereign wealth fund. The bank’s compliance policy states whistleblowers are “protected against any form of retaliations.”

Even though an Employment Tribunal found the auditor did not act unreasonably or unacceptably when she raised valid concerns, judges ruled her dismissal was not whistleblower retaliation. And even though it was the legal director who became upset – and not the auditor – the court said the bank was justified in firing the auditor because of her “unacceptable style of interaction.”

In calling the decision “troubling,” the Corporate Crime Observatory reports, “Saliently, this judgment risks fostering an environment where those seeking to detriment whistleblowers are able to do so with impunity or dramatically decreased liability, and threatens the whistleblower with prolonged, stressful and expensive legal battles with increasingly uncertain remedies.”

“The effect on the proclivity of an individual to stick their head above the parapet and assume such levels of risk will be nothing short of chilling,” writes the Observatory’s Stephen Holden of Manchester Law School, “therefore significantly increasing the risk to the public of organizational delinquency.”

‘Law for the abuse of whistleblowers’: Romania’s False Start

Within anti-corruption circles, Romania often is praised for being the first country in continental Europe to pass a whistleblower protection law. However, the 2004 measure, which only applies to public employees, is widely viewed as one of the least effective laws in Europe.

Only six cases could be identified in the IBA study. And though employees prevailed in each case, researchers could not verify that the rulings were final because case numbers were “censored.” Researchers found information about the number of cases, sanctions and benefits to be “limited.”

The passage of new EU rules in 2019 led Romania to update its law and expand it to include employees of private companies. The effort has been marked by disagreement and discontent. At least two draft laws had been in the works for more than a year when the Parliament’s Chamber of Deputies approved one of the proposals on 29 June. Complaints about the draft came from opposition parties, NGOs and European Chief Prosecutor Laura Codruța Kövesi.

“These provisions could have a demobilizing effect, discouraging potential whistleblowers in Romania and negatively affecting the level of fraud detection in the EU,” said Kövesi, according to a Romanian media report. “In fact, it would lead to a deterioration of the system ensuring the proper functioning of investigation and prosecution services.”

More than 20 NGOs accused the country’s ruling coalition of selectively following EU rules, saying leaders “do not want to protect whistleblowers.” The groups complained the proposed law excludes anonymous reporting, requires whistleblower reports to be destroyed after two years, and reduces the fine for whistleblower retaliation.

“From the law for the protection of whistleblowers,” said one opposition politician, “they turned it into a law for the abuse of whistleblowers.” Another remarked that the coalition “wants to see these whistleblowers disappear. They want to shut whistleblowers up, make it impossible for them to blow the whistle, expose them, and deprive them of any protection.”

In the midst of the disputes, President Klaus Iohannis sent the proposed law back to Parliament on July 28. He warned that a poor law could trigger infringement actions from Brussels and potentially threaten the receipt of EU funds.

French Disconnection: ‘Professionals opt for silence rather than disclosure’

Even though France’s whistleblower protection law is considered among Europe’s strongest, most professionals are reluctant to report misconduct because the risks to their career outweigh any potential personal benefits, researchers have found.

“Professionals opt for silence rather than disclosure, even if they are aware of internal anti-corruption mechanisms,” wrote Anne Goujon Belghit of the University of Bordeaux and Jocelyn Husser of Aix-Marseille University. “Indeed, the perceived risks of blowing the whistle are still too great in relation to the possible benefits, even moral, that they perceive in passing on the information.”

In reaching their findings, Belghit and Husser exposed 173 professionals from various industries to five different dilemmas, including conflicts of interest and mismanagement. They found professionals do not always consider these situations to be problems they should report, and they tend to stay within their comfort zone.

“Professionals generally prefer to share the secret in their micro-social space…with their close colleagues…or their close family,” they wrote. “It appears that alerting is perceived as an act of betrayal.”

Belghit and Husser also say companies’ internal anti-corruption mechanisms generally are “still not very effective.” This finding is reinforced by a report released in July by Raphaël Gauvain and Olivier Marleix of the National Assembly’s Law Commission. The parliamentarians presented 50 recommendations to improve France’s anti-corruption system, including providing financial support for whistleblowers and removing obstacles for reporting crime and corruption.

France passed a new whistleblower law in February that, while an improvement over the previous “Sapin II” law, contains several major shortcomings. The Defender of Rights (Défenseur des droits) does not have the authority to order an employee to be protected, reinstated or compensated. And the law criminalizes certain types of whistleblowing. For example, a member of the military who reports a conflict of interest “in bad faith” or “with the intention to harm” can be imprisoned for up to five years and fined up to €45,000.

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