Unite response to FCA PRA Whistleblowing in deposit ta...

This response is submitted by Unite the Union. Unite is the UK’s largest trade union with over 1.4 million members across all sectors of the economy including financial services, construction, manufacturing, transport, food and agriculture, energy and utilities, information technology, health, local government and the not for profit sectors.

Unite is very clear that firms and the regulator must have a zero tolerance of victimisation on whistleblowing, because without whistleblowers there can be no safety net within the sector. It is essential that we acknowledge the bravery of whistleblowers. Recent stories about whistleblowing have certainly reinforced that view that at present in the financial services industry the messenger gets shot. This perception must be changed so that, as the head of the UK civil service said in 2014, “whistleblowers should be championed and the public are indebted to those who expose wrongdoing and malpractice”.

Unite absolutely agrees with the FCA and PRA position that whistleblowers must never suffer any “personal repercussions”.

Responses to questions

Q1: Do you agree that the requirements should apply to these firms? What are the benefits and challenges of extending the requirements to a) branches of overseas banks, and b) other sectors regulated solely by the FCA such as non-PRA-designated investment firms?
Unite is of the view that the protections for whistleblowers must apply to all firms operating within the UK financial services industry. Only once the industry changes its culture towards bad practice can real change come about and trust in the industry rebuilt. The perception by customers of an industry shrouded in secrecy will never be overcome whilst those working in the sector are too scared or fearful to speak out against wrong doing.

Q2: Do you agree that all UK-based employees of relevant firms should be informed about the whistleblowing services run by the PRA and the FCA?
It is essential that all employees are very clear of the channels available to them if they wish to highlight possible wrong doing or bad practice. Most importantly that employees are given strong reassurance in all the whistleblowing procedures that they will not suffer at work as a result of any information they report, they will not be demoted, overlooked for promotion, dismissed or harassed.

It is vital that clear responsibility is given to firms to ensure all employees are told about the whistleblowing services run by the PRA and the FCA. Essentially that every new employee is told of policies and existing employees are regularly reminded of the avenues available to them in order to highlight areas of concern. There seems to Unite the union that there is a great deal of work to do to raise awareness that an employee does not, in the first instance, have to go to their employer with any allegations. In our views there is currently little awareness of the prescribed person or body status amongst employees in the sector.

Q3: Do you agree that firms’ whistleblowing arrangements should cover all types of disclosure, not just those related to regulatory matters or protected disclosures under PIDA?
Yes, Unite does agree that the arrangements should cover all types of disclosure. Unite is in agreement with The Whistleblowing Commission Code of Practice which states that “there should be written procedures covering the raising and handling of concerns. These procedures should be clear, readily available, well publicised and easily understandable”.

Unite would expect that whistleblowers are given appropriate feedback and kept up-to-date on developments around their allegations.

In order for employees to have confidence in the whistleblowing function of a firm it is vital that the unit which takes responsibility for handling allegations is seen as independent. Firms must carefully consider the importance of the perception of the whistleblowing unit amongst its employees.

Q4: Do you agree firms’ whistleblowing arrangements should be available to all individuals, and that protections should apply to all individuals making disclosures, not just employees or those who benefit from protections under PIDA?
Yes, Unite does agree that the whistleblowing arrangements should be available to all individuals. It is very important that the culture of transparency runs through the entire organisation. Therefore it is vital that the protections for whistleblowers apply far and wide. Procedures must be developed in consultation with employees and their trade union representatives.

Q5: Do you agree that settlement agreements and employment contracts reached by a firm with a UK worker must contain a passage clarifying that nothing in that agreement prevents the worker from making a protected disclosure? Should firms be required to impose the same requirement on agencies that provide them with staff?
Yes, Unite is of the view that firms must make it explicit to staff that they are always free to make a protected disclosure. Unless there is complete clarity on this for employees the entire whistleblowing procedure will be compromised.

Q7: Do you agree with these proposals for the role of whistleblowers’ champion?
Unite agrees that responsibility for the implementation and delivery of a whistleblowing procedure must sit at the top of financial services organisations. This senior employee must actively promote awareness of the protections afforded to whistleblowers. Without strong and visible leadership at the top of an organisation there is a real likelihood that the protection from mistreatment of whistleblowers will filter down the company.

It is essential when developing whistleblowing arrangements employers consult staff and their representatives. Unite supports the central premise of the consultation that “to encourage individuals to raise their concerns about wrongdoing by protecting them from unfair treatment, and in doing so, help firms manage their risks more effectively by enabling alleged misconduct. Dishonesty and illegal activity to be exposed at an early stage”. The role of the whistleblowers’ champion is central in ensuring this happens.

Q8: Do you agree that the whistleblowers’ champion should prepare an annual report to the firm’s senior governance committee, which is available to regulators on request, but not made public?
It is the view of Unite that as a minimum a whistleblowers champion reports on their role to raise awareness of whistleblowing procedures and protections. In order to bring confidence to the workforce it is necessary for the report to be shared and publically available to the staff. Without an annual report which all can access there remains a significant void in terms of the knowledge employees will have about whistleblowing procedures.

An annual report from the whistleblowers’ champion, made publically available will keep awareness up of whistleblowing and moreover ensure the firm does not falter in its commitment to protecting those wishing to expose wrongdoing.

Q10: Do you agree the FCA should require firms to inform it of cases where an employment tribunal finds in favour of a whistleblower?
Unite does agree with the FCA that it is important that the regulator is informed when an employment tribunal finds in favour of a whistleblower. This will enable the FCA to keep a track on any concerning trends or patterns in terms of whistleblowers being mistreated.

The FCA must continue to provide a formal channel for Unite to raise concerns brought to them, with the regulator in complete confidence. Unite and predecessor unions were raising issues around inappropriate selling, targets and pressure for sales, many years before the regulator decided to act and perhaps if formal channels for communicating issues that concerned our members had been available then, we may not have seen the level of miss selling of products like PPI, for example, that we have witnessed.
Fees for Employment Tribunals limit access to fair treatment for whistle-blowers who are dismissed and seek to claim unfair dismissal.

Q11: Do you agree that the FCA and the PRA should not place a requirement on employees to speak up when they see wrongdoing?
It must be a central element of a firm’s whistleblowing procedures that there is no duty on an employee to speak up when they see wrong doing and it must be a voluntary disclosure. Unite very strongly agrees with the consultation that “the decision to speak up should remain a matter for the individual”.

For further information please contact Saba Edwards, senior communications officer. Unite the Union, Unite Finance and Legal Sector on 07768 693 953.

April 2015