Enterprise Bill [HL] — House of Lords, 2015-11-30
Topic: Government Operations
Michael Wills (Labour, Centre-left): My Lords, I support the amendments, which have been so persuasively argued for by the noble Lord, Lord Low. I want to speak particularly to Amendments 70AA and 73B, to which I have added my name It is clearly right that there should be rigorous controls on the use of taxpayers’ money for exit payments, but the Minister will be aware of widespread concerns across the House about unintended consequences of this legislation in discouraging whistleblowers and the resulting potentially damaging impact on public services. We have discussed this issue many times in your Lordships’ House, and I do not want to rehearse at great length arguments on the merits of whistleblowers, save to say that I support what the noble Lord, Lord Low, has just said. We have seen the value of whistleblowing in both the public sector and the private sector over and again—Volkswagen might have been very well served by a whistleblower some years ago, which might have saved it and millions of motorists great grief. We have seen the advantages of whistleblowing in the National Health Service and throughout the public sector. I hope that the Minister will agree that it is very important that, in moving forward with this legislation, which broadly I welcome, that there are not unintended consequences of the sort that the noble Lord, Lord Low, has just described in discouraging genuine whistleblowers from coming forward We have heard already that this legislation, which applies a uniform cap of £95,000 across all settlement agreements for employment disputes, does not take into account the uncapped damages that can be awarded for very good reasons under the Public Interest Disclosure Act. It is common ground that the public interest is best served by creating an environment which encourages genuine whistleblowers to come forward with their information and to do so in a timely way. Such whistleblowers usually take considerable personal risks in doing so and many of them do not work again in their chosen industry or profession after making a public interest disclosure. It is crucial that there is robust legal protection for such courageous individuals. Uncapped damages at employment tribunals are an important part of such protection—for example, encouraging those with high earnings in professions which are often of great public concern to come forward. It is important that such people do so, as they often possess potentially the most important information In view of the Government’s frequently stated concerns to protect whistleblowers, it is hard to believe that they intended the cap in this Bill to damage these public policy aims, but that could still happen. As the noble Lord, Lord Low, has just set out, a blanket cap might encourage the parties to be less flexible in their negotiations, to be more aggressive and litigious. At the very least, there is potential for confusion, given that the level of the cap in this legislation does not match the current employment protection legislation, in particular claims under the Public Interest Disclosure Act The Minister has suggested that the Government will deal with this issue by the Treasury issuing guidance, which—I quote from the noble Baroness’s letter to the noble Lord, Lord Low, of 17 November—will, "make clear that where payments relating to potential whistleblowing claims are correct then the power to exempt exit payments could be exercised" It is not clear what this might mean in practice. For example, what does "correct" mean? What is the significance of the words suggesting that the power "could be exercised" instead of "would be exercised"? It is important that the Minister clarifies the position on this as the Government have a propensity, despite all their fine words, for incoherence in the way that they provide adequate protection for whistleblowers The Minister may recall, for example, our exchanges during the passage of the small business Bill about extending whistleblowing protection towards job applicants. The Government eventually recognised the need to do this for NHS workers as a result of the Francis report—this was most welcome—but they then refused to implement such protections for anyone else. Then the Government produced no reason why such protection should not be available to workers in, for example, social care, the City of London or the construction industry, where informal blacklisting is just as likely and the public interest in disclosure is potentially just as important as in the NHS At the time the Minister claimed, "there is work to be done to get this right and it will take time, beyond this Parliament, to reach a suitable solution".—[Official Report, 26/1/15; col. GC 10.] Time has passed and there is a new Parliament, so will the Minister take this opportunity to reassure your Lordships’ House that the Government have been addressing this anomaly? If they have not done anything yet, can she reassure me that she will at least ask one of her officials—assuming that there are any left after the Autumn Statement—to consult about how best to address this anomaly, including potentially talking to the whistleblowing charity, Public Concern at Work, and write to me at some point—say, before the Summer Recess—about the progress she has made As we have heard, Amendment 73B contains provision to tackle continuing concerns about so-called gagging clauses and the need to ensure that, if a whistleblower and an employer enter into negotiations to end the employment relationship, any unresolved or outstanding public interest concerns at the centre of the dispute are passed on to a relevant regulator or law enforcement body. As noble Lords are aware, the Public Interest Disclosure Act provides a defence against gagging practices by making any clause in an agreement void if it would prevent a protected disclosure being made. This means that an employer would not be able to rely on a confidentiality clause within the settlement agreement either to prevent a relevant concern being raised by a whistleblower or to threaten monetary penalties for a breach of a provision in the settlement agreement. The Government have in the past relied on this to resist previous attempts to tackle these so-called gagging clauses. However, the law is not the problem; the problem is the evidence of a widespread perception that confidentiality clauses contained within settlement agreements gag individuals from escalating their concerns with a regulatory or law enforcement body The National Audit Office researched public sector whistleblowing settlement agreements and looked at 50 agreements. It concluded that none of them would breach the Public Interest Disclosure Act but, when it interviewed the whistleblowers who were party to those agreements, it found that they were under the impression that they were so gagged by the agreement. This is due to the opaque wording of many of the confidentiality clauses within the settlement agreements considered in the research The amendment deals with this problem in two ways: first, through ensuring that a worker in this difficult situation has access to legal advice so that they are fully aware of the defence provided by the law and so preventing the erroneous perception to take hold that these individuals are gagged when they sign a settlement agreement. The second part of the solution is to create a referral system within regulations relating to the cap to ensure that incidents of wrongdoing, malpractice or health and safety danger are sent to the relevant regulatory body so that the signing of a settlement agreement does not prevent the concerns being raised and the public interest being pursued These amendments represent an opportunity for the Minister to reassure the public that the Government are determined to do everything possible to protect and encourage genuine whistleblowers by removing the confusion and incoherence that this legislation risks creating and by tackling a long-established obstacle to the transparency that is so critical to the effective and safe delivery of public services. I hope the Minister will seize this opportunity with enthusiasm and accept the amendments; or, at the very least, as the noble Lord, Lord Low, said, agree to meet him, me and my noble friend Lady Hayter to discuss a possible coming together of minds on this before Third Reading. I certainly would not wish to press this to a vote either.