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Public Interest Disclosure Bill

Volume 589: debated on Saturday 11 April 1998

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7.28 p.m.

My Lords, I beg to move that this Bill be now read a second time.

It is a pleasure and an honour to introduce this Bill into your Lordships' House. It passed through another place with strong support from both the Government and the Opposition. I pay tribute to both Mr. Richard Shepherd MP and to the Minister of State at the DTI, Mr. Ian McCartney, for the careful consideration that they and their advisers gave to this matter. The results of that careful consideration can be seen not only in the detail of the Bill but also in the support that the Bill has received from the CBI, the Institute of Directors, the TUC, consumer groups, various professions such as the medical, legal and accountancy professions, and numerous other bodies.

I myself have particular reasons to be proud of this measure as it is, to a large extent, based on the work of a charity, Public Concern at Work, which I helped to found some six years ago. It was not an easy initiative to launch, but its importance was recognised at the outset by, among others, the noble and learned Lord, Lord Oliver of Aylmerton, the noble Lord, Lord Gladwin of Clee, the noble Baroness, Lady Dean of Thornton-le-Fylde, the noble Lord, Lord Alexander of Weedon and the noble Baroness, Lady Wilcox. They all kindly offered support and advice to help the charity to find its feet. It also had the advantage of securing the services of Mr. Guy Dehn as director. He has been indefatigable in assisting with this Bill and, indeed, with the work of the charity generally.

There is one other noble and learned Lord I must particularly thank. I refer to the noble and learned Lord, Lord Nolan. Under his chairmanship, the Committee on Standards in Public Life championed the work of the charity and the issue which lies behind this Bill. Indeed, the noble and learned Lord and his committee took up the issue with such eloquence that I can best summarise the purposes of this Bill by quoting from his committee's second report:
"All organisations face the risks of things going wrong or of unknowingly harbouring malpractice. Part of the duty of identifying such a situation and taking remedial action may lie with the regulatory or funding body. But the regulator is usually in the role of detective, determining responsibility after the crime has been discovered. Encouraging a culture of openness within an organisation will help: prevention is better than cure. Yet it is striking that in the few cases where things have gone badly wrong in local public spending bodies, it has frequently been the tip-off to the press or the local Member of Parliament—sometimes anonymous, sometimes not—which has prompted the regulators into action.
Placing staff in a position where they feel driven to approach the media to ventilate concerns is unsatisfactory both for the staff member and the organisation".
While the committee's words referred explicitly to public bodies, the issue it addresses does sadly apply to the private and voluntary sectors as well.

The official reports in recent years into the Zeebrugge ferry disaster, the rail crash at Clapham Junction, the explosion on Piper Alpha and the scandals at BCCI, Maxwell, Barlow Clowes and Barings have all revealed that staff were well aware of the risk of serious physical or financial harm but that they were either too scared to raise their concern or that they did so in the wrong way or with the wrong person. This culture, which encourages decent ordinary citizens to turn a blind eye when they suspect serious malpractice in their workplace, has not only cost lives and ruined livelihoods, but it has also damaged public confidence in some of the very organisations on which we all depend.

The purpose of this Bill is to give a clear signal to people in places of work up and down the country that if they suspect wrongdoing, the law will stand by them provided they raise the matter in a responsible and reasonable way. Where a worker is aware of fraud, a price-fixing cartel, the sexual abuse of a child in a home or a danger to health, safety, or the environment, or some other malpractice, this Bill provides welcome and much needed guidance.

If today a worker feels unable to raise the matter with his immediate manager, for whatever reason, he may well feel that the only options are to stay silent or to blow the whistle in some underhand way, perhaps by leaking information anonymously to the media. Once this Bill is enacted and taken to heart by the British people, which I am sure it will be, there will be a much improved chance that concerns about dangers to the public interest will be raised and addressed within the organisation itself. Where there are good reasons why such concerns cannot be raised and resolved internally, the Bill sets out a tight structure whereby the concern can be raised outside the organisation, thereby protecting the public interest. Where the worker follows the Bill's framework and satisfies its requirements, he will be protected from victimisation and can bring a claim before an industrial tribunal if he is victimised.

As to that protection, the Bill provides that where a worker is disciplined or demoted for raising such a concern, he can apply for relief to an industrial tribunal and be awarded such compensation as is just and equitable. Where, however, he is dismissed, his remedies are not set out on the face of the Bill but are to be determined by regulation. That is because the Government rightly recognise that the matter warrants careful and further consideration. There has been much support for the view that, like discrimination legislation, awards under the Bill should compensate for the victim's loss where he loses his job. There is alternatively the option, favoured by the Government, that the awards should follow the best available under employment law, such as those provided for health and safety representatives. These not only substantially exceed the normal awards in employment cases, but also include specific incentives to encourage the employer to take back a worker who has acted in the public interest. Bearing in mind the wider implications any departure from existing employment provisions will have, I hope the House accepts the Government's case that they should consider the matter further, not least in the light of the forthcoming proposals on fairness at work.

Your Lordships will have gathered that this Bill is to be part of wider employment legislation. However, recognising the importance of the issue, it covers individuals such as trainees, homeworkers and professionals in the NHS who are not normally protected by employment law. While its scope is wide, the House should note that it does not cover the genuinely self-employed, the intelligence services, the armed forces and the police. As to the last category, however, I am pleased to report that the Government undertook in another place to ensure that police officers are to be provided with comparable protection to that provided in the Bill.

I turn to how the Bill will work in practice. Clause 1 incorporates new provisions into Section 43 of the Employment Rights Act 1996. As a starting point, it clearly directs the worker towards raising the matter internally first. What will be Section 43C will afford protection where a worker raises within his own organisation an honest and reasonable belief about one of the specified malpractices. New Section 43E will provide like protection to staff within public bodies who raise such concerns with the sponsoring department.

The Bill then addresses the particular circumstances where an external disclosure of the concern is protected. First and most importantly, new Section 43F will provide something of a halfway house in that it recognises the particular role of regulatory authorities which are charged to oversee and investigate malpractice within organisations. Where a regulator—it might be the Financial Services Authority or the Health and Safety Executive—has been prescribed for the purposes of the Bill, a worker who contacts them will be protected if, in addition to the tests I have referred to for internal disclosures, he also reasonably believes the information and any allegation within it is substantially true.

Where a wider disclosure is made, the worker must not only pass the tests that apply to disclosure to prescribed regulators, but also the additional hurdles set out in what will be new Sections 43G and 43H. New Section 43G will address the circumstances in which a disclosure is made to the police, a professional association, a regulator which has not been prescribed by Ministers, and the media may also be capable of protection. As to such disclosures, your Lordships will be pleased to note that these will not be protected where their purpose was the personal gain of the worker.

Apart from deciding whether the particular recipient of that disclosure was appropriate, the tribunal must be satisfied that that disclosure was reasonable, having regard, among other things, to the seriousness of the threat to the public interest, whether the danger is continuing or likely to occur again, whether the disclosure was in breach of an obligation of confidentiality owed to a third party and, where appropriate, whether use was made of any whistle-blowing procedure which the organisation had in place. Most importantly, the Bill indicates that such wider disclosures—wider than one's own employer or specified regulator—should be protected only where the concern had been raised internally or with a prescribed regulator first, in which the reasonableness of his response will also be the key issue.

This requirement within the Bill's structure that the concern should have been raised first does not apply where the worker can demonstrate a reasonable belief that he will be victimised or that evidence of the malpractice will be destroyed or covered up. Equally, no such conditions presently exist where the matter is exceptionally serious, such as the sexual abuse of a minor, an issue addressed in Section 43H.

As I hope I have made clear, this measure will encourage people to recognise and identify with the wider public interest and not just their own private position. It will reassure them that if they act reasonably to protect the legitimate interests of others who are being threatened or abused, the law will not stand idly by should they be vilified or victimised.

It is not my view, in the light of my experience with the charity Public Concern at Work, that serious malpractice is endemic or widespread in organisations throughout the country. However, I am satisfied that when it occurs, the law needs to be strengthened so that those decent people who too often stay silent for fear of losing their own job are protected. I mention as one example the case of Judy Jones who was the deputy matron in a nursing home in Yorkshire. She suspected that the manager of the home was sexually abusing women in his care suffering from senile dementia. She could not raise the issue with the manager or the owner who was the manager's wife. Her fear was that if she went to the authorities it would be the manager's word against hers and her career might be destroyed. Fortunately, with the assistance of the charity, she collected incontrovertible evidence before she contacted the police. It subsequently transpired that the manager had been sexually assaulting people in his care for some nine years; and last February he was gaoled for four years. As one victim's family said, "If it hadn't been for Mrs. Jones, it could still be going on and no one would ever have known".

I hope your Lordships will agree that the situation in which Mrs. Jones found herself is an invidious one and one which we should not allow to flourish unchecked. This Bill addresses that dilemma in a sound and practical way while protecting the interests of responsible employers. As such, I commend it to your Lordships' House. I beg to move.

Moved, That the Bill be now read a second time.—(Lord Borrie.)

7.42 p.m.

My Lords, I welcome the Bill. It provides long needed protection for employees who whistle-blow on unsafe, fraudulent and other undesirable practices by employers. I am glad to note that it is welcomed by both the CBI and the TUC, and although substantially about employment rights it is regarded as a public interest measure.

I am particularly glad that it has been introduced. I recall with, I may say, some pride that when I had been a Member of your Lordships' House for several years I was successful in introducing a Private Member's Bill designed to give employment protection to employees engaged in North Sea oil ventures who blew the whistle on unsafe practices. My noble friends Lord Wedderburn and Lord McCarthy and I worked together to introduce the Bill following the appalling "Piper Alpha" disaster. Many of the employees were engaged on short-term contracts and although some were apprehensive about the level of safety precautions they were unwilling to risk continued employment by exposing the problems involved. I was briefed by my union, MSF. We managed to get the Bill through this House and it was later approved in another place. It was then absorbed into a more comprehensive Health and Safety at Work Act.

The present Bill goes much further than that of course. It deals not only with health and safety issues, but fraud and other malpractices. I note from the Bill that a qualifying disclosure within the terms of the Bill occurs when this is made to a "prescribed person". It seems to me that for some workers an appropriate person might often be his or her union representative. The union might be expected to have the appropriate knowledge of the way to proceed and whether the failure concerned was of a sufficiently serious nature to qualify under the terms of the legislation. That raises a further point in my mind. It might well be said that a recognised union holding a collective bargaining agreement with the employer is clearly an appropriate person within the meaning of the new Bill. However, as the "Piper Alpha" disaster disclosed, unsafe practices often occur in situations where the employer is anti-union and refuses union recognition, making it as difficult as possible for the union to recruit.

In such circumstances, the individual employee who has detected something unsafe, or a serious failure within the meaning of the legislation, is in even more need of protection if he reports the circumstances to his union official. I would welcome the Minister's comment on that.

Other issues also occur to me. I note that enforcement of employees' rights is, as one would expect, ultimately to be a matter for employment tribunals and, I assume, for the EAT. I am concerned, as many are, about the level of work that might be imposed upon the system. It is true that a recent Bill, now the Job Dispute Resolution Act, has introduced another means of dealing with straightforward unfair dismissal cases via arbitration. That should lighten the workload somewhat.

However, colleagues who are more involved with ETs and EATs than I am are concerned about whether sufficient resources will be made available to deal with these new tasks. I therefore welcome the Minister's comment on that when he replies to the debate.

Finally, I wish to raise a point that has already been discussed in Committee in another place—the cap on levels of compensation. I think that the issue could be important. I note that the Government wish to stay within the limits imposed within employment law. However, as my noble friend Lord Borne said, the Bill is intended to deal with fraud and malpractices of all kinds. The Maxwell and BICC cases come immediately to mind, but there have been other less publicised cases.

People capable of bringing malpractice to the attention of the appropriate authorities in such cases are likely to be specialist and managerial personnel. It is clear from what is now known about the Maxwell affair that people who might have been able to throw some light on what was going on were too intimidated to come forward. They would have risked not only the jobs they then had; they might not have been able to find anything else in the same specialism. In other words, a whole career could have been put at risk. In such circumstances, a cap does not seem a good idea.

There is an even more pressing need to look at the cap. The employer is ordered by an employment tribunal to reinstate an employee. Let us suppose that that employer stubbornly refuses to do so. That is likely to occur in only a small minority of cases. But in such instances, when the case is finally settled, a cap on compensation offered does not seem appropriate. When I was a union official, I remember a case where reinstatement was ordered by the tribunal. It took four years before the case was settled. In such circumstances, it does not seem reasonable that a cap should be applied to the compensation eventually paid.

I am pleased that it is accepted that there has to be some protection against false allegations. That is clear from the Bill and from what my noble friend Lord Borne said. Presumably that is the reason for saying that qualifying disclosure will not apply if the individual makes disclosure for personal gain. I welcome that.

In these days when the media are so totally irresponsible, and interested so much in sensation, that is important. I note that in another place my honourable friend made it clear that simply going off to the press rather than attempting to raise the issue in the first place internally would not be acceptable. The disclosure should be to a "prescribed person" able to deal with it in an informed and responsible way.

I commend the Bill. I have raised a few points that I think are of some interest. However, I have no doubt that overall it is greatly to be welcomed. I congratulate my noble friend on introducing it.

7.48 p.m.

My Lords, I welcome the Bill and support it. I congratulate my noble friend Lord Borne on introducing it to the House. I have to declare an interest, although my noble friend has declared it for me. I, too, am a member of the charity Public Concern at Work. I supported that organisation when it was founded because of my practical experience as a trade union officer. Over a number of years I have seen the often traumatic situation in which employees found themselves.

As a result of those experiences, I quickly formed the view not only that this kind of measure was necessary, but that it would be brought about only if there was wide consensus across the whole range of employment activity, not merely among trade unions but among businesses and various institutions. It is to the credit of the charity that it has been able to bring together a large group of support. One would expect support from the TUC; but it has come also from the CBI, the Institute of Directors and large public companies, and not least from both Government and Opposition Benches in the other place.

This is a practical Bill. It is short—it has 18 clauses—but, my goodness, I wish it had been around some years ago! It would certainly have made the lives of employees in Britain in certain selected cases far easier, and made it easier for them to rest in their employment. Such matters can be traumatic. Even if an employee is represented by his or her union, the issue that he or she may feel they need to raise may not necessarily affect them individually; it may affect a third party. It may be a health and safety issue in relation to the production process which does not affect the employees, but affects the user of the goods in question.

I was involved in a practical way in the early stages of the Maxwell pensions scandal. I know one person in the UK who will be delighted today that the Bill is being introduced in this place. He is a man called Harry Templeton. He was a trustee of the Maxwell pension fund at the Scottish Daily Record. Harry had been employed by the company for many years before Maxwell owned that newspaper. From the information he had, Harry Templeton felt that the pension fund was going wrong, and he raised the issue at a formal trustees' meeting. As a result, he was sacked by Maxwell, who would not take him back.

As a result of legislation enacted by the previous government, it was impossible for us to take collective industrial action to force his re-employment. As general secretary of the trade union, the best I could negotiate for Harry in those "hands tied behind our backs" circumstances was a cash settlement. Although the settlement was high, that outcome was disgraceful. He had raised a genuine concern many months before that scandal in overall terms hit the headlines. Had this legislation been on the statute book, it would have helped Harry Templeton and would have kept him in employment. And—who knows?—it may have helped those thousands of workers who subsequently had many sleepless nights—many of whom indeed lost much of their pension provision.

Having a piece of legislation on the statute book is a great thing. If you are a member of a trade union, the union will make sure that you know about it. But if you are not in a trade union, it is important that you know that the Act is there. I can think of many isolated situations in which an individual employee knows that something is wrong, wants to speak out and yet does not know where to turn. In those circumstances, it is not unusual for an employee possibly to visit a citizens advice bureau, where he may receive help. But how can he or she share what may be private information without being protected?

As a trade union officer, I raised those kinds of issues. However, I was not employed by the company; I was a full-time union officer. One of the concerns I have in relation to the Bill, welcome though it is—and it is a tremendous step forward—is the fact that the Bill does not provide specifically and clearly for trade union representatives to be able to speak out on behalf of an individual employee who, despite legal protection, may be absolutely terrified about raising an issue. Working people quite often do not have great self-confidence. If they know that something is wrong, they need an arena in which to discuss the matter. In some cases that situation is covered under the Bill. But sometimes, in order to have the self-confidence to raise such issues, people may need a third voice to speak for them. I am therefore concerned that the Bill does not provide clearly for such trade union representation.

My noble friend Lady Turner of Camden raised the issue of capping on compensation. I am concerned about that matter too. It may be argued that if reinstatement is required and the employer does not do it, capping is not an issue. I do not accept that. I see this as a weakness that needs to be addressed.

Those are my two key concerns. However, they do not in any way prevent me from giving the Bill my wholehearted support. It is a step forward. I know that many employees will feel a confidence that they may not have felt before when they believe that matters are going wrong—and not necessarily for them as individuals: in the example I have given, Harry Templeton was concerned about his fellow workers; and when he spoke out, he lost his job. This Bill will help prevent such a situation. It will build on employment guidelines to which employers will have to refer when they would like to respond aggressively—as they do from time to time—and in a way that is damaging to the employee. I support the Bill despite those two reservations. Perhaps the Minister will comment on those points when he replies.

7.56 p.m.

My Lords, this is an excellent and overdue Bill. Those of us on this side of the House only want to probe as to the detail of the Bill because it has not received a Second Reading before coming before the House.

All I wish to do is explore a point made by several previous speakers. It relates to the role of the employer.

As the noble Lord, Lord Borne, said, the assumption behind the Bill is that in the first—the primary—instance, the worker who has a problem will go first to his or her employer. The explanatory memorandum states that in general it is envisaged that the matter has been raised with the employer, or with the prescribed regulatory body.

I suggest that we examine the type of matters for which this Bill will be used. We may take, for instance, the example of Mrs. Jones, cited by the noble Lord, Lord Borne. That relates to the type of matter that an employee might very well feel he or she cannot take to the employer. In cases such as a criminal offence, a miscarriage of justice, some danger in the machinery, some situation where an employee believes the employer has concealed information, to whom does he or she go? On the employer's side, one can go to an immediate superior with these matters; or possibly the level above that; or perhaps the managing director? To whom do you go? I suggest that in the majority of cases employees may very well not feel confident in such a case in going to anybody on the management side. Yet the Bill envisages that in general the matter has been raised with the employer. I question how far that is likely to be the case, and ask the Government to comment.

It will be said, as it was by the noble Lord, Lord Borne, that there are exceptions. If I am correct, the Bill envisages six situations in which a person does not go to his or her employer. The first is when the matter does not involve the employer but is related to the misconduct of some other person. In that case a person is covered if he or she does not go to the employer first. A second exception, introduced in new Section 43D, is when an employee goes to a lawyer. In relation to the comment made by the previous speaker, why does that not apply if he or she goes to the union representative? Why should the union representative not be protected in the same way? That is the second case: the employee may go to some adviser, possibly a lawyer. If a lawyer is consulted, the employee does not have to go first to the employer. As I understand it, if the issue has no element of confidentiality, a person might be able to avoid the employer. If a person is likely to be victimised or penalised in some way, that may be possible. If there is some residuary body, such as the Health and Safety Commission, it may be possible to refer the problem to that body rather than go to the employer. And the most difficult circumstance for the average worker, introduced in new Section 43H, is if the employee takes the view that it is an exceptionally serious matter.

How on earth does the average worker know that it is an exceptionally serious matter, not just a serious matter or not just an exceptional matter? It must be "exceptionally serious". How does the employee know that? The noble Lord, Lord Borrie, gave us an example, but it was not a list. That is the part of the Bill that I find unsatisfactory in its present state.

I believe that in many cases—I cannot say the majority—workers will feel that they do not wish to go to the employer; they wish to go elsewhere. Unless the Government tell us that there will be specified residuary bodies established across the whole area covered by the Bill—and maybe they will tell us that tonight—so that everyone will have someone to go to, it will remain a problem. Unless one receives guidance on what is an "exceptionally serious" matter, one is in difficulty.

I would like the Government to comment on those matters. Shall we have better definitions in the regulations? Will the regulations make clear how the various exceptions relate to each other? Surely, after the Bill is passed there must be something like a code of practice or an explanatory memorandum. The noble Baroness said that the citizens' advice bureaux could help. Yes, of course, but we cannot expect them to advise in a vacuum as to what is an exceptionally serious case. We must have guidance; there must be documentation if we are to give people some idea so that they know when they are protected and when they are not. Nevertheless, it is an excellent Bill and we look forward to hearing what the Minister says.

8.1 p.m.

My Lords, from these Benches we too welcome the Bill and are grateful to the noble Lord, Lord Borne, for introducing it. I myself am grateful to Guy Dehn of Public Concern at Work for his briefing and advice. It surely must be in the public interest to offer protection to workers who draw attention to malpractice in the organisation which employs them, whether that malpractice relates to a straightforward criminal offence, damage to the environment or threats to the health and safety of others.

The key aim of the Bill is to change the culture on disclosure. Employees will know that they have legal support for acting in the public interest if they sound the alarm on malpractice. Equally, employers will also know that they will not be able to use the threat of victimisation to prevent concerns being raised.

As a number of speakers have already made clear, the Bill will not, of course, make it easy to be a whistle-blower. Employees who discover malpractice will still need considerable courage to raise the issue with their employer, because in some cases they will be unsure about whether there is complicity on the part of the person to whom they are making the disclosure and because victimisation can take many forms over an extended period, some cases of which can be extremely difficult to prove.

I do not intend to detain the House for long, but, like a number of other noble Lords, I have several questions for the Minister. First, the Bill does not provide help in cases where disclosure of information involves the discloser in a criminal act. This means that a civil servant who breaks the Official Secrets Act is not protected by the Bill. So, if a Foreign Office official believed that officials and Ministers were colluding, say, to break UN sanctions and he raised the matter, perhaps with the chairman of the Select Committee on Foreign Affairs, he would not be protected by the Bill because such a disclosure would clearly be a breach of the Official Secrets Act.

In previous such cases, the civil servant has not necessarily faced prosecution under the Official Secrets Act because the government of the day have accepted, however shamefacedly, that the disclosure was in the public interest. I assume that in future cases of that kind, in which the Government did not prosecute under the Official Secrets Act, that would not trigger Section 43B(3) of the Bill as it appears that this provision will only apply where an individual is convicted. I would welcome an assurance from the Minister that that is indeed the case.

Secondly, as has previously been mentioned, the Bill specifically excludes the police. At first sight, it seems a fairly major omission. I realise that in another place, as the noble Lord, Lord Borrie, explained, an assurance was given by the Government that the police would be given equivalent protection to that provided by the Bill. I wonder whether the Minister could explain what form that equivalent protection might take.

Thirdly, it is all very well passing the Bill but, if it is to be effective, both workers and employers must be aware of its provisions. Given that the support received from the CBI, the IoD and TUC among others, will Ministers hold discussions with them about how information about the Bill will be disseminated so that all those who should know about the protection it offers do indeed have that information?

Fourthly, while not necessarily wishing to have a requirement in the Bill for a formal regular report by the Government to Parliament on its operation, I believe that its operation should be subject to formal review. Could Ministers now or at Committee stage give an assurance that this will in fact happen and possibly explain what mechanisms may be adopted to ensure that it does?

In raising those questions, I do not wish in any way to impede the passage of the Bill or to question its overall aims. We look forward to seeing it on the statute book.

8.5 p.m.

My Lords, as with all other speakers who have contributed to the brief debate, I congratulate the noble Lord, Lord Borne, on introducing the Bill into your Lordships' House, just as it was introduced into another place by Mr. Richard Shepherd. He has always been a brave advocate of what have not always been entirely fashionable causes. From these Benches, we hope that we can apply ourselves to the Bill in the most constructive manner.

Listening to the noble Lord, Lord McCarthy, I had an unfortunate image that perhaps the wheels of this wagon were beginning to grind into the sand as we went into problems that seemed to me to be more likely to impede the passage of the Bill than to accelerate it. However, doubtless when we reach the Committee stage we can deal with such matters more carefully.

The noble Lord, Lord Borrie, and those who promoted the Bill in another place have at least attempted in the most constructive fashion to address the dilemma which will always exist. Is it more appropriate that internal disclosure should be pursued first or that there should on every occasion be the opportunity to go outside the organisation? If such a black and white set of circumstances were promoted, I should have thought it was potentially destructive of the cohesion of any organisation, whether public or private. I would not advocate, as in the jurisprudence of the European Court of Human Rights, that one should always be required, by parallel, to exhaust domestic remedies before one seeks to pursue an external remedy.

Whether the exceptions provided in the Bill are entirely right is a matter for constructive debate. However, the attempt made in the Bill to require an approach to internal disclosure before an external one seems essentially the correct approach. When I had responsibility for the draftsmen, I thought that the approach of textual amendment to existing legislation was entirely the right way forward. Now that I sit on this side of the House, my enthusiasm for that approach has waned somewhat. It is much more difficult to understand the Bill in all its detail immediately where that approach has been followed. So if I have some of the detail wrong, I hope that I will be corrected by the noble Lord, Lord Borrie, or by the Minister later.

However, apart from those general observations, I have just three points I wish to make. The first is on the police. The noble Lord, Lord Borrie, correctly recalled that in another place, as the noble Lord, Lord Newby, observed, the Government indicated, as I understand it, that there would be comparable protection for police officers to that provided in the Bill. Of course, I am delighted to hear it, but it seems to me that given the civilianisation of much of the police, it is a clumsy solution to what will go on in police stations the length and breadth of the country if there are to be two separate systems to deal with a whistle-blowing incident. I hope that we may explore that a little to ascertain whether we can draw the two together more effectively.

Secondly, as I understand it—this has to be a change introduced into employment law—if anybody is employed in national security they are not to enjoy the protection afforded by this Bill. I do not want to engage in a debate about the extent of the Official Secrets Act and whether it is too great or too restrictive, but it must follow that there are potentially circumstances where the security services are engaged in some activity over which there ought to be some whistle-blowing power, internally or externally, which in no way prejudices national security or even what is presently defined within the Official Secrets Act. Again, perhaps at some point we can explore whether there is a way to introduce protection for those people. If the head of one's department in the security services has plush carpets and is wasting money on wonderful flocked wallpaper or taking extravagant holidays, is one to have no opportunity to blow the whistle about that? That is something we need to address.

My third point, which was fully and accurately touched upon by both the noble Baronesses, Lady Turner and Lady Dean, is the issue of the cap on damages that would be awarded under the Bill. I hope I have these figures correct. My understanding is that the maximum award will be £45,000. That figure may not be absolutely correct, but the noble Baroness, Lady Dean, made reference to the Maxwell pension scandal, and scandal it was. It is outrageous that someone like Mr. Templeton should have been sacked in the way he was. But without asking her to reveal or disclose any figures that she successfully negotiated on his behalf, in a scandal of that magnitude with the level of expertise that senior managers must have had, the type of jobs they occupied, the degree of specialisation that they had and the very narrow market place they dealt with, I am concerned about the limitation of damages that may be awarded.

My Lords, as there is a reasonable amount of time left at our disposal, perhaps I might intervene to refer the Minister to what Mr. McCartney said on 24th April. He said that the Government favoured the approach available currently for health and safety disclosure, making the point,

"Contrary to apparently popular belief, the sums available in such cases are by no means insignificant. Where someone is dismissed unfairly and does not get his job back despite a re-employment order having been made, the compensation is based on three times annual salary".—[Official Report, Commons, 24/4/98; col. 1137.]
He goes on to refer to various people on quite high salaries and three times such a salary would be much higher than the limits mentioned by the noble and learned Lord.

My Lords, I am grateful to the noble Lord, Lord Borrie, and thankful that I put in my earlier caveat that I was not entirely sure I had followed all the detail from the Bill. But even the quotation from Mr. McCartney seems to indicate that the damages to emerge in circumstances where there has been an order to re-employ and that order has been rejected—I doubt a tribunal would have invited Mr. Templeton to go back to his job and, if it had been offered, I doubt that he would have wished to take it—are limited.

My point is simply this. If serious scandals have to be addressed and serious issues arise for senior managers to consider when they decide whether or not they will go outwith the organisation and make appropriate complaint, we ought at least to examine in your Lordships' House whether the appropriate levels of damages are sufficient. Having made that observation and spelt out the areas it may be appropriate for us to examine in Committee, I repeat my congratulations on the noble Lord's introduction of the Bill.

8.15 p.m.

My Lords, first, I too congratulate and pay tribute to my noble friend Lord Borrie on taking forward this Bill. As my noble friends said, it deals with a subject of great importance to workers, employers and the public at large. I thank my noble friend Lord Borrie for explaining the Bill. Much valuable work has been and continues to be carried out by the charity, Public Concern at Work, a charity my noble friend was instrumental in establishing. I congratulate also my noble friend Lady Dean on the part she played in the charity.

The Government have given full support to this important Bill. It will provide a remedy in cases, we hope few in number, where a worker was victimised for quite properly raising concerns about wrongdoing. It is plainly right that such procedures should exist, as my noble friend's quotation from the committee amply demonstrated. He made the point that it will help to encourage a climate of openness in the workplace and reduce the likelihood that failures or malpractice will occur. It is clear from the public consultation on the Bill that it has widespread support from all sides. The consultation was thorough and was carried out largely by Public Concern at Work. It resulted in over 80 responses from a variety of organisations, including employer organisations such as the CBI, the Institute of Directors, individual trade unions as well as the TUC, lawyers and others.

The Bill aims to encourage good practice and ensure that problems are dealt with at the earliest opportunity, without public exposure except in extreme circumstances. The Government join the noble and learned Lord, Lord Fraser, in the hope that the Bill will have the positive effect of encouraging employers to follow best practice by introducing procedures—or using existing ones—which will make it easier for workers to inform their employers about their concerns.

This Bill is very much in keeping with the Government's aim of encouraging best practice throughout industry. The procedures that employers adopt may vary according to their needs. But the Government hope that employers will ensure that they are effective and help promote greater openness in the workplace. For example, they may build upon existing grievance procedures or it may be more appropriate to designate a senior manager, the company's lawyer or an auditor as the person with whom concerns should be raised.

My noble friend Lord McCarthy asked about alternatives to the employer. The Bill provides powers for the Secretary of State to prescribe people or bodies to whom workers can turn as an alternative to their employer. Once the Bill has completed its parliamentary passage, we would intend to bring forward an order covering suitable bodies such as the Health and Safety Executive, the Environment Agency, OFT, the DTI's Insolvency Service and others. However, the Bill also protects workers where it is appropriate for them to disclose information to someone other than their own employer or the designated regulator. That may happen where it is unreasonable to expect internal disclosure because the worker reasonably believed that he or she would be victimised or that information would be covered up if the employer were alerted. Alternatively the worker may have raised the matter internally but been ignored or the wrongdoing may be so exceptionally serious that it must be disclosed immediately rather than delaying to find out whether there was a relevant designated body. In such cases the worker will be protected only if he or she acts reasonably—which is carefully defined, as my noble friend Lord Borne reminded us, in Clause 1, subsection 43G(3). There can therefore be no doubt about that.

I should like to make clear that the Bill does not intend to increase the risk of employers being sued for breach of confidence. The courts apply a public interest test when considering whether to enforce a duty of confidentiality.

This Bill, in particular Clause 1 and proposed new Sections 43G and 43H, lays down a series of reasonable requirements which a worker must follow to attract protection. The way these provisions operate, and in particular the tests in new Section 43G which refer among other things to whether the disclosure breaches a duty of confidentiality, means that any disclosure protected under the Bill would be likely to be within the public interest test. As a result, the employer would not be liable for the worker's breach of confidence.

My noble friends Lady Dean, Lady Turner and Lord McCarthy asked about trade union officials. The Government hope that employers will work with employees and their representatives, including trade unions, to put in place appropriate procedures to enable internal disclosures to be made. It is possible that trade union representatives may be the appropriate people to whom disclosures will be made as part of these procedures. In those circumstances, a disclosure to a trade union official would be a protected disclosure. We would certainly encourage employers and workers to identify the most suitable procedure for their circumstances. However, where trade union representatives are not part of the internal disclosure procedure, a disclosure made to them would have to be considered under Section 43G. Provided that the disclosure met the test in that section, it would be regarded as a reasonable disclosure and thus protected.

My noble friend Lady Turner asked about the additional workload for employment tribunals. The Government believe in a partnership approach where the best companies recognise their employees as partners in the workplace. Our new agenda is providing minimum standards in the workplace to underline this approach and we are aiming to encourage a change in workplace culture where disputes are resolved in the workplace by employers, workers and their representatives working together. This Bill is part of that agenda and will encourage issues to be resolved internally without the need for recourse to tribunals. However, it is inevitable that there will be disputes which cannot be resolved in another way. The Government have taken action to relieve the burden on tribunals. I was glad to support the Employment Rights (Dispute Resolution) Act, introduced by my noble and learned friend Lord Archer of Sandwell, which gained Royal Assent on 8th April. That Act will improve and streamline tribunal procedures and promote alternative dispute resolution. It is an important measure to help tribunals cope with their potentially increasing workload. My noble friends Lord McCarthy, Lord Borne and Lady Turner all contributed to improving the Bill as it passed through your Lordships' House.

The noble and learned Lord, Lord Fraser, and my noble friends Lady Turner and Lady Dean asked about the cap on the compensation of higher-paid employees. This is an employment rights measure. The Government consider it important that compensation should be in line with current remedies. We believe that there is scope for those to provide adequate compensation. Perhaps I may give the figures to the noble and learned Lord, Lord Fraser. Awards made under the Bill will attract special payments ranging from £17,400 to £47,600 if based on the health and safety model. However, as the noble and learned Lord mentioned, much higher awards are possible where a re-employment order is made but not complied with. Compensation in that case is based on 156 weeks' pay. Higher earners would therefore benefit. Someone earning £200,000 a year could receive £600,000.

Noble Lords have said that employees may not seek re-employment because that is not what they want. However, the provisions of the Bill would protect them from victimisation if they were reinstated. I suppose that my advice could be that they should seek re-employment, as my noble friend Lord Borrie suggested. As I said, tribunals are able to award considerably larger amounts where a re-employment order is not complied with. However, we share some of the concerns of noble Lords. My honourable friend the Minister of State said in another place that in the longer term we will wish to consider whether the limits and the arrangements for reviewing them work in the best way to meet our aims. So I hope that we will be able to satisfy the concerns of my noble friend Lady Dean's friend Harry Templeton.

My noble friend Lord McCarthy asked about a code of practice. The Bill does not include an order-making power for a statutory code of practice. However, we will be preparing guidance on the Bill which will help employers and workers to understand it. This will include the use that should be made of internal company procedures and the conditions attached to protection when disclosure is made to others.

The noble Lord, Lord Newby, asked why the Bill does not override the Official Secrets Act and other statutes. It is not the intention of the Bill to override statutory provisions which have been agreed by Parliament. They have particular intentions. If they were unjustified they would need to be changed for all purposes, not just those in the Bill. The noble Lord, Lord Newby, and the noble and learned Lord, Lord Fraser, asked about the position of the police. The police are office-holders, not employees, and are covered by their own separate regulatory regime. For that technical reason it is necessary for any changes to be made by the Home Office under its regulations. The important point though is that the Government have agreed that the police should be covered by similar protection. It is a secondary matter how that will be achieved.

The noble and learned Lord, Lord Fraser, asked about the security services. All people who work for the security and intelligence services, including contract workers—cleaners, drivers and so on—are subject to security vetting. That is potentially because they have access to sensitive material. Such staff are more of a risk in not appreciating the implications of information they may disclose. The security and intelligence agencies use contractual clauses to restrict disclosures. This is more specific than general powers conferred by the Official Secrets Act. Clause 1, new Section 43J, of the Bill, however, would prevent such contractual clauses—hence the exclusion.

I think I have responded to all the points raised in the debate. We believe that the protection in the Bill for conscientious workers is long overdue. I therefore join my noble friend Lord Borrie in commending the measure to the House.

My Lords, before the noble Lord sits down, in the light of what he has said about trade union representation, I hope that the Government will look kindly on an amendment to new Section 43D, which at the moment reads:

"A qualifying disclosure is made in accordance with this section if it is made in the course of obtaining legal advice".
Surely the Government would look kindly on an amendment which stated,
"obtaining advice from a recognised trade union".

My Lords, the short answer is that if the noble Lord would like to table an amendment we shall certainly consider it.

My Lords, I thank my several noble friends and other noble Lords for taking part in this debate and for welcoming the main thrust and purposes of the Bill. I am particularly grateful to the Minister who has comprehensively answered a large number of questions raised in the debate and done so in a most helpful manner. I particularly welcome the fact that he said that the Bill is not intended to increase the risk of employers being sued for breach of confidence. That was a most helpful comment.

Obviously, there is no need for me to duplicate or replicate the many points the Minister made. As regards my noble friends Lady Turner and Lady Dean and also my noble friend Lord McCarthy and trade unions, although the phrase "trade unions" does not appear in the Bill, there is no doubt whatever that they are, have been and will be most helpful in the preparation of codes of practice and other forms in enabling workers to take advantage of the Bill and to bring about the change of culture to which the noble Lord, Lord Newby, referred. Trade union representatives will inevitably and happily be most helpful in their advisory role which clearly is needed if only for the types of questions which my noble friend Lord McCarthy very properly raised concerning the difficulties of interpretation. However good the Bill is, I suggest that there will be difficulties of interpretation. This Bill will become a statute which will not be easy for the ordinary worker in the workplace to interpret without some help. Undoubtedly, trade unions will have a role in that.

I thank noble Lords for their contributions and I ask the House to give the Bill a Second Reading.

On Question, Bill read a second time, and committed to a Committee of the Whole House.