Enterprise and Regulatory Reform Bill

Lord Wills Excerpts

Monday 10th December 2012 Grand Committee

[Lord Touhig]

My Lords, I am grateful to my noble friend Lord Wills, the noble Lord, Lord Low of Dalston, and of course my noble friend Lady Dean of Thornton-le-Fylde for agreeing to support Amendment 22. I am also grateful to the Minister, the noble Lord, Lord Marland, for agreeing to meet with me and representatives of the charity Public Concern at Work to discuss this amendment and Amendment 23. I also thank him and his officials for being willing to continue this dialogue with Public Concern at Work these past couple of weeks.

This amendment concerns vicarious liability. Earlier this year, I received a letter from one of three nurses who had been denied protection under the Public Interest Disclosure Act. The three nurses had raised concerns about the qualifications of a fellow nurse. The nurse had been claiming to be more qualified than was in fact the case. The three nurses were subsequently victimised and, as a result of raising honest and genuine concerns, one had threats made to her daughter and to her home. The case went as far as the Court of Appeal, where it was found that vicarious liability does not exist under the Public Interest Disclosure Act. As a result, three totally innocent and good nurses, who simply acted to protect the public, were pursued by the NHS Manchester trust for the cost of the appeal, which amounted to £39,000.

These three nurses acted in the interests of us all but, as a result, have themselves become victims. I have to ask: where do people go to right a wrong such as this, except to Parliament? As things stand, employers are able to escape liability where they do not protect those who have blown the whistle about serious malpractice within their workforce. On top of that, the bullying culture within the workplace is all too common.

Public Concern at Work tells me that bullying as a result of whistleblowing is a common issue raised on their whistleblowing advice line. Indeed, this is so in the case of Nurse Helene Donnelly, who gave evidence to the Mid Staffordshire NHS trust inquiry. She is a whistleblowing nurse who told the inquiry how she was physically threatened by colleagues after raising concerns about standards in the accident and emergency department. She told the inquiry that,

“threats to my physical safety were made”,

to the point where, after finishing work at night, she would have a family member,

“come and collect me from work because I was too afraid to walk to my car in the dark on my own”.

Mrs Donnelly also told the inquiry that she contacted her local Royal College of Nursing representative, who was initially shocked by what she had to say. Later, however, she was told to keep her head down.

Amendment 22 encourages employers to put whistleblowing arrangements in place and, if they do all they can to protect the whistleblower, employers will have a defence. It has been drafted widely to include third parties but, given the Government's review of third-party harassment under the Equality Act, it could be limited solely to co-workers. The letter I received from one of the nurses asks one simple question:

“Is there anything you feel you may be able to do to stop NHS Manchester pursuing us for these costs?”.

Well, there is something we can do and that is to support Amendment 22. I beg to move.

[Lord Wills]

My Lords, I support Amendment 22, to which I have added my name and which has been so ably put forward by my noble friend Lord Touhig.

As we have heard, Amendment 22 seeks to close a loophole which was opened up by a Court of Appeal decision on a case brought by the three nurses from Manchester. The Court of Appeal judge who ruled in that case said:

“I accept”,

that the claimants’ lawyers,

“may be right to say that if the Tribunal decision is allowed to stand, it means that on one view of the matter whistleblowers are inadequately protected. If so, any remedy must lie with Parliament”.

We now have an opportunity to provide that remedy and I hope that the Government will take it.

The Minister’s noble friend, the noble Earl, Lord Howe said in October last year, when the results of this case were heard:

“We are considering whether we need to do more to protect whistleblowers following this judgment”.

Can the Minister tell us the outcome of those considerations within government; and, if they are not going to act now, why not?

As we have heard from my noble friend, there is significant evidence from the organisation Public Concern at Work that harassment and bullying by co-workers can often be a consequence of whistleblowing and a substantial deterrent to it. This is not acceptable. It is not acceptable that an employer can escape liability for failing to protect a whistleblower from such harassment and bullying. The amendment offers a simple way of remedying such an obvious anomaly by mirroring equality legislation. I hope the Government will feel able to accept it.

I also hope that the Minister will look favourably on my Amendment 23E, which further refines this approach by providing for personal liability against workers who bully or harass co-workers for whistleblowing. It will act as a powerful deterrent to such behaviour and, in doing so, help to encourage whistleblowing. It mirrors provisions in discrimination legislation and I hope that the Government will feel able to accept it.

--- Later in debate ---

[Lord Marland]

Again, we are extremely sympathetic towards and supportive of each other. It is not just the Cross Benches, the Labour Party and the Liberal Democrats who are keen to get this right but the Conservatives as well. I reiterate my thanks to the noble Lord, Lord Touhig, and Public Concern at Work, with which we are working very closely on this issue. I also thank the noble Lord, Lord Wills, for his input, even though we have not had the pleasure of discussing this subject outside this Room—something that I should like to do in future. I am jolly glad that we included the NHS provision in the previous amendment, because some progress seems to have been made there in view of some of the absolutely ghastly stories that have been referred to.

My noble friend Lord Brooke of Sutton Mandeville brought up a very important point. I am told that under the Interpretation Act “single” means “plural” when necessary, so I do not think that we would need to amend that in the amendment.

I have had wide-ranging discussions with the noble Lord, Lord Touhig, and Public Concern at Work across the whole piece, and those discussions have covered Amendments 23 and 23F, which we will be coming to in a few minutes. We are very conciliatory on all this, and on Amendment 23F, in particular, both parties have formed a set of words to deal with the issue of good faith and so on. I think we have found satisfaction with Public Concern at Work and with the noble Lord, Lord Touhig, so perhaps I may look at the issue as a whole.

We need to be careful when going down this route with Amendments 22 and 23. The truth is that the absence of vicarious liability and whistleblowing is not a loophole because there is legislation that provides for it, and it provides for both the employer and the employee. I am struck, as I always am, by the point made by the noble Lord, Lord Borrie, about the employee having protection as well as the employer. That is fundamental. Indeed, they would both be protected under the Protection from Harassment Act 1997; that is the legislation that they would return to in order to claim their rights. Therefore, they have the right protection in this area. It is a strong law that, sadly, has not encapsulated all the whistleblowing issues, but nothing is ever entirely encapsulated. However, whistleblowers have an absolute right and this amendment would put in another level of protection, which is not in the Bill because it already exists.

We should be looking at improving the guidance on this issue. I have instructed my officials to look at the guidance that we are putting on the government website to show where the rights of recourse are and what rights the employer and the employee have under the interpretation of the Protection from Harassment Act. This will be on our gov.uk website. On the basis that we will have an ongoing discussion between now and Report, I hope that the noble Lord will feel confident about withdrawing his amendment for the time being.

[Lord Wills]

Can the Minister clarify something for me? I am very grateful for his openness and willingness to carry on a discussion about this but I should be grateful to know the Government’s position on what Lord Justice Elias said in the Manchester case, which we have heard about. I accept that it is a qualified statement but he said he accepted that the claims lawyers,

“may be right to say that if the Tribunal decision is allowed to stand, it means that on one view of the matter whistleblowers are inadequately protected. If so, any remedy must lie with Parliament”.

On the facts of that case, is it the Minister’s view that whistleblowers are or are not inadequately protected?

[Lord Marland]

I do not have a view because I do not have enough knowledge of the subject. As the noble Lord rightly said, he is quoting a small piece that I am unable to form an opinion on because I do not have enough evidence to support one view or another. However, I shall be happy to respond to the noble Lord on that issue. It is a perfectly reasonable question but it is too specific for me at the moment, I am afraid. I would need to take legal advice on it because I am not qualified in that area. I know that that is not a satisfactory answer but I hope that the noble Lord, Lord Touhig, will withdraw his amendment.

--- Later in debate ---

[Lord Low of Dalston]

My Lords, I strongly support the amendment and hope that I will be worthy of the kind remarks of the noble Lord, Lord Touhig, in referring to my support a few moments ago.

I cannot muster the same forensic analysis as the noble Lord has treated us to but, in my view, the matter is simple. If we leave the good faith test in the Act and add to it the public interest test, which the Government want to add to the legislation, we shall simply be doubling the hurdles that the whistleblower has to clear. When Parliament passed the Public Interest Disclosure Act, it did not insert a public interest test in the legislation. Good faith was seen as the appropriate safeguard, and Dame Janet Smith in her report on the Shipman inquiry commented that it would perhaps make sense if the good faith test were replaced by a public interest test. The Government are acceding to that suggestion but they are leaving in the good faith test. I submit that with this new public interest test inserted in Clause 15, whistleblowers would need to show both that they had the reasonable belief that their disclosure was made in the public interest and that, with the good faith test, their predominant motive for making a disclosure was in the public interest. That creates an additional hurdle for the whistleblower to clear and a requirement to satisfy a sort of double public interest test.

Removing the requirement of good faith, as proposed in the amendment, would simply restore the law to its former balance as between the whistleblower and the organisation, and refrain from imposing additional tests on the whistleblower. Retaining the two tests would unnecessarily complicate the law, requiring the whistleblower to satisfy different tests with different standards: in the one case reasonable belief; and in the other, that there is no ulterior motive. So the amendment would simplify the law, which is in danger of becoming overcomplicated, and clarify and simplify the protection for whistleblowers. I urge the Committee to accept it.

[Lord Wills]

My Lords, I, too, have added my name to the amendment and would like to say just a few words in support of it.

As we have heard, the new test proposed in Clause 15 attempts to remedy a loophole created by the case of Parkins v Sodhexo Ltd. Most people agree that that loophole should be closed but, in doing so, the Government risk creating a new barrier to whistleblowers, adding new complexity to a legal framework which can already be daunting enough for those wishing to expose wrongdoing. The amendment proposed by my noble friend Lord Touhig is an attempt to remedy that by removing the “good faith” test and, as he explained, to rebalance the legislation back towards protection of the whistleblower.

In doing that, as we have just heard from the noble Lord, Lord Low, my noble friend is following the recommendations of Dame Janet Smith in the Shipman inquiry, who said that in her view the words “in good faith” could be omitted from the Public Interest Disclosure Act. She argued:

“The three tiered regime of the PIDA, with its incrementally exacting requirements, should afford sufficient discouragement to those minded maliciously to raise baseless concerns”.

She continued:

“If the words ‘in good faith’ were removed from the PIDA, the test under the PIDA would be brought more closely into line with the test for ‘malice’ in defamation proceedings. It would seem to me to be desirable that the tests should be as close as possible so that a person thinking of making a report can be safely advised about his/her position in respect of both types of proceedings”.

I know that the Government share the view of everyone on the Committee that everything possible should be done to encourage the exposure of wrongdoing, and I hope that even at this relatively late stage, they will feel able to accept what is a modest and sensible proposal to that end. If, for whatever reason, they do not, I would be grateful if the Minister could explain why the Government reject the arguments of Dame Janet Smith. Why do they not accept that the three-tiered regime, with its incrementally exacting requirements, affords sufficient discouragement to those minded maliciously to raise baseless concerns—especially as they are remedying the loophole created by the case of Parkins v Sodhexo Ltd? Secondly, can the Government explain why they think that it is not desirable for the tests in the Act to be brought more closely in line with the test for malice in defamation proceedings?

Having said all that, I understand that the Government are engaged constructively in discussion with Public Concern at Work. I hope that they may feel able to accept the compromise amendment which I have tabled as Amendment 23F. That recognises that, for whatever reason, the Government are not keen to accept Amendment 23 but might be prepared to accept an amendment which removes good faith as an issue in assessing liability but retains it as a consideration in assessing remedies.

As I am sure the Minister will be aware, precedent has been established with the Polkey reductions, which are used in allowing for unfair dismissal damages to be reduced where there has been contributory negligence. Amendment 23F is a compromise which will at least mitigate the problems with the status quo by ensuring that motive will not play a central role in securing protection for whistleblowers. Although the Minister may not be able to give a definite statement on this now, I hope that he can reassure us that he expects that he will be able to reach a form of wording which will be satisfactory to all sides in a compromise amendment.

[Lord Young of Norwood Green]

My Lords, I shall speak briefly to Amendments 23 and 23F, because people who are far more expert in these areas have already forensically examined them. My noble friends Lord Touhig and Lord Wills, have already explained the reasoning behind them. They raise the important issue of how a broad public interest test would interact with the existing good faith test.

When Parliament passed the Public Interest Disclosure Act, it did not place a public interest test in the legislation, choosing instead to define the categories of wrongdoing under which disclosures in the public interest disclosure action fit. Good faith was seen as the appropriate safeguard.

If the public interest test is to be considered at all, it is crucial that it is considered in conjunction with the test of good faith. With the Government’s new test proposed in Clause 15, whistleblowers would need to show that they had reasonable belief that their disclosure was made in the public interest. Later there is the good faith test that their predominant motive for making a disclosure was in the public interest, creating, in effect, a double whammy of double public interest. Amendment 23F, proposed by my noble friend Lord Wills, would that good faith would become a consideration only at remedy stage. There is already a precedent for this, similar to the Polkey reductions used in allowing for unfair dismissal damages to be reduced where there has been contributory negligence.