New PRA and FCA Whistleblowing Rules. Are you Ready?

New PRA and FCA whistleblowing rules come into force on 7 September 2016. The rules are intended to encourage a culture in which individuals feel able to raise concerns and challenge poor practice and behaviour. 

Whistleblowers’ champion

Firms should already have appointed a senior manager or non-executive as their whistleblowers' champion. The whistleblowers’ champion has responsibility for overseeing the effectiveness of internal whistleblowing policies and procedures but does not need to have a day-to-day operational role handling disclosures from whistleblowers.

Internal whistleblowing channels

Firms will have to establish internal whistleblowing channels and tell staff about them. This channel, and firms' internal whistleblowing policies and procedures, must be able to deal with all types of disclosures, not just those which fall within the definition of a protected disclosure under the Public Interest Disclosure Act 1998 (PIDA). Firms will not have to investigate all disclosures, but are expected to give due consideration to each case.

Firms will also be required to take disclosures from any person, not just workers who meet the relevant definition in the Employment Rights Act 1996. However, they will be able to offer fewer protections to whistleblowers who are not employees if they are victimised by people outside the firm.

PRA and FCA whistleblowing services

Firms will have to inform staff about the whistleblowing services of the PRA and FCA, as well as of the legal protections against unfair dismissal and detrimental treatment for whistleblowing. 

Settlement agreements and employment contracts

Firms will have to ensure that wording in employment contracts and settlement agreements does not deter staff from whistleblowing. Firms will be required to include a term in all settlement agreements making clear that nothing in the agreement prevents the worker from making a protected disclosure. They will also be prohibited from including warranties requiring workers to confirm that they have not made a protected disclosure and that they do not know of any information which could lead to them doing so. 

Whistleblowing report

Firms will have to present an annual report on whistleblowing to the board. The whistleblowers’ champion will be responsible for preparing the report. 

Tribunal claims

Firms will have to notify the regulator if an employment tribunal finds that a whistleblower suffered a detriment or was unfairly dismissed as a result of blowing the whistle. 

Scope

The new rules will apply to deposit-takers with over £250 million in assets, to PRA-designated investment firms, and to insurers subject to the Solvency II Directive, as well as to the Society of Lloyd's and managing agents. For other firms the rules will have the status of "non-binding guidance" and they may wish to comply voluntarily.