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New FCA Reports Shows Another Drop In UK Whistleblowing Cases

The Financial Conduct Authority (FCA) has released disappointing statistics that show how the volume of employees making whisteblowing claims has dropped sharply throughout the finance industry for a second year.

This result is unfortunately not a positive indication that a lower need for UK workers to address wrongdoing in the workplace now exists, but is rather a reflection of how employees feel a lack of support is available to them should they choose to speak out. The amount of high-profile cases reported by the media in recent months certainly indicates no decline in the need for representation, although only few will gain such a level of exposure.

The FCA’s report details how there were 866 reports of whistleblowing in 2016, a downturn of over 20% from the 1105 reports issued during 2015, which in turn was well below the 1367 registered for 2014.

The FCA report also details how just six of the disclosures the organisation received were considered strong enough to actually result in legal action against an employer, despite 108 other claims being initially deemed solid enough for further investigation. This marks another disappointing drop over 2015 when 199 claims were considered to be of value.

Despite a clear decline, the 2016 result remains a vast improvement compared to the whisteblowing figures of a decade ago. In 2007-08 the number of workers speaking out was as low as 140. Increased media coverage for high-profile whistleblowing cases and a greater level of support for UK finance employees has since encouraged workers to make their voices heard. However, the introduction of tribunal fees in July 2013 led to a universal decrease in employment law cases, of which whistleblowing has been no exception.

Another significant factor harming the volume of whistleblowing cases is recent legislation instructing finance companies with assets of at least £250m to employ a senior manager in the role of ‘whistleblowing champion’. Since its introduction in 2015, this position requires a designated employee to give confidential advice to employees who approach them regarding workplace grievances.

All comments made are disclosed in confidence and the manager concerned must as a matter of protocol refer each report to the whistleblowing services of the FCA and Prudential Regulation Authority. An employee is required to speak with this manager before seeking outside guidance, although some exemptions may be possible.

Such an internal assessment is intended to assist workers as part of a system designed to save both employer and employee the costs amassed through outside referrals while eliminating misunderstanding between both parties where possible.

Although it must be considered that this approach may have an opposing effect, as claims made to an outside source with a potentially more balanced perspective may actually be more beneficial to the worker. Nevertheless, the introduction of whistleblowing champions shows how the UK government is prioritising the need to support employee concerns regarding internal business conduct.

It is often suggested that Britain should adopt an approach similar to that of the US, in which whistleblowers are offered financial incentives for making claims. The belief behind this scheme is that workers will be less likely to worry about the consequences whistleblowing might have on their career if they are financially compensated.

However, critics of the scheme believe it will cause a rise in false claims, which defeats the tribunal fee system’s intention to save taxpayer money by reducing false claims. However, others feel that the scheme will make claimants more likely to gain enough confidence to make a claim. This approach has thus far been generally successful in America, with many new claims getting approved for tribunal hearings.