New consultation on whistleblowing reform and SFO whistleblower reward scheme

In this article, Lucy Gordon discusses the key proposals, what they could mean for employers, and the steps organisations should consider taking now.

The Public Interest Disclosure Act 1998 (PIDA) came into force in 1999, giving protection against dismissal and detriment to whistleblowers in the workplace who raise concerns in line with the prescribed framework. However, the whistleblowing landscape has evolved significantly since then. In particular, we have seen the introduction of strong whistleblower protection across Europe under the EU Whistleblowing Directive and whistleblower financial incentive schemes in the United States, along with a number of major scandals in the UK, all of which have prompted calls for a review.

Against this backdrop, the government has launched a consultation on potential reform to the existing whistleblowing legal framework. It is also consulting on a whistleblower reward scheme, reflecting recommendations made earlier this year by Jonathan Fisher KC in his Independent Review of Disclosure and Fraud Offences.

Any future reforms arising from the consultation could have a significant impact on employers, with the potential for more prescriptive, enforceable minimum standards and more scope for individuals to raise concerns externally. Organisations may therefore want to familiarise themselves with the options the government is exploring and consider responding to the consultation. There are also practical steps that employers can take now to help prepare for possible change.

The consultation closes on 8 January 2027 and is available here: Whistleblowing – GOV.UK.

The government is expected to issue its response and set out next steps in 2027.   

Reform of the whistleblowing regime

The government is seeking views on a number of aspects of the current legal framework, including whether more prescriptive obligations should be introduced for employers.

Whistleblowing policies and procedures – a new statutory duty?

One of the most significant options under consideration concerns whistleblowing policies and procedures.

Although current government guidance encourages employers to have whistleblowing policies and procedures in place, these recommendations are not legal requirements (save that there are some specific requirements for certain organisations operating in the financial service sector).  Views are sought on whether reform is needed, and if so, on two possible approaches:

• Revised non-statutory guidance for employers
• A statutory duty requiring employers to have appropriate and effective procedures for handling whistleblowing disclosures, along with a policy explaining that to workers. Employers would also be required by law to follow up on disclosures

In relation to any statutory duty under the second approach:

• This would broadly reflect the approach in Ireland, which implements the EU Whistleblowing Directive. The approach in the current FCA rules, which is less prescriptive than the Irish approach, is also mentioned as a possible alternative model
• The government has made clear that a duty to follow up would not require employers to investigate every disclosure, rather they would be expected to take reasonable and proportionate steps to assess whether a disclosure had merit and decide what action, if any, is appropriate
• Civil penalties are proposed for non-compliance with any statutory duty, and views are sought on the most effective approach for enforcement, including a designated government body rather than through the tribunal system.
• Views on the scope of any statutory duty are also sought. The government has said they are considering applying any statutory duty to all private sector employers with 50 or more employees and all public sector employers (and excluding employers who are already subject to an equivalent duty, such as those regulated by the FCA).  They will also consider introducing any statutory duty in phases to allow employers time to prepare

Other potential reforms

The consultation also seeks views on a range of wider issues:

• Extending whistleblowing protection to additional groups, including ‘certain self-employed’ individuals
• Expanding the categories of wrongdoing that may qualify for protection, including those relating to the use of AI and misuse of public funds/abuse of authority
• Widening disclosure routes. This includes possible removal of the requirement that an individual reasonably believes that information is ‘substantially true’ for disclosures to a prescribed person, such as a regulator. The consultation notes this could make it easier for workers to obtain whistleblowing protection in cases where allegations are less well-founded. It also includes possible additional external disclosure routes, such as to trade union officials
• Whether the existing ‘public interest’ test (i.e. the need for the worker to reasonably believe their disclosure is in the public interest) is working effectively and whether better guidance may be needed. The test is an important safeguard to ensure that the whistleblowing framework is not used for purely personal disputes. However, the term is not defined in the legislation. In practice, we see a lot of cases where disclosures would not generally be regarded as in the public interest, and our view is that this is an area where a stricter approach would be welcome
• Whether there should be a central whistleblowing body
• Extending the deadline for an application for interim relief from 7 to 14 days. The consultation notes the impact this could have on employers and tribunals, amplifying the recent surge in such applications, potentially linked to use of AI by claimants when drafting claims

SFO whistleblower reward scheme

The government has said  it supports introducing a US-style SFO whistleblower reward scheme and is seeking views on the design of such a scheme as part of the consultation. The aim is to encourage more people to come forward with information, strengthening the SFO’s ability to investigate serious fraud, bribery, and corruption. Whilst this article does not discuss this aspect of the consultation in detail, a summary of the key points is set out below.

The proposal is that such a scheme would reward people who provide ‘significant and original’ information about economic crimes that leads to a successful enforcement outcome against an organisation. Rewards would be funded from the financial penalty or fine imposed.

The consultation seeks views on:

• Eligibility for rewards – noting it is proposed that this will follow separate criteria to the existing whistleblowing framework, so eligible individuals need not be ‘workers’, and that consideration is being given to whether individuals could potentially be eligible where information is originally reported to another UK or overseas authority and then passed to the SFO
• The size of rewards
• Who should be responsible for determining eligibility for rewards and amounts awarded, along with appeals and complaints
• Whether a new offence should be introduced for individuals who knowingly make false reports under the scheme, and for harassing or intimidating those who report under the scheme

Key takeaways

The government is expected to publish its response to the consultation during 2027, but no legislative timetable has yet been announced. However, there may be material changes to the whistleblowing landscape and how concerns are reported and dealt with.  In particular, we may see more prescriptive, enforceable minimum standards and a greater potential for individuals to report externally.

Employers will want to consider whether to respond to the consultation and contribute to the development of future policy.

Regardless of the outcome of the consultation, now is a good time for employers to review their whistleblowing arrangements, particularly to ensure they are clear, accessible, effective, and trusted so that whistleblowers have the confidence to use them in practice.

Separately, employers should also remember that the Employment Rights Act 2025 (ERA) has amended the definition of qualifying disclosure to include a disclosure relating to sexual harassment. Policies and procedures should have already been updated to reflect this. Further reforms in relation to NDAs are also expected under the ERA in 2027. See our tracker for more details here: Employment Rights Act – Walker Morris

Please do get in touch if you would like to discuss any aspect of the consultation or would like support in preparing a response.  We also have a team of specialists who can assist organisations in reviewing their whistleblowing arrangements and support investigations.