Who will gain from whistle-blowing?

Martin Chitty, head of employment, Wragge & Co

Christopher Osman, head of employment, Clifford Chance

William Dawson, managing partner, Simmons & Simmons

Employment lawyers are gearing up for the results of a high-profile case which will put new whistle-blowing legislation to the test.

Grey Communications Group's former chief financial officer Roy Wilson is bringing a case against his old employers which is likely to reveal how tribunals will interpret new laws designed to protect employees who speak out in the public interest against company malpractice.

Under the new laws, contained in the Public Interest Disclosure Act 1998, an employee who is sacked for blowing the whistle on wrongdoing will be able to claim unlimited damages against his or her employer at an employment tribunal.

This compares with the £12,000 cap on unfair dismissal claims, although employment lawyers expect the Lord Chancellor, Lord Irvine to raise this limit to £50,000 at the end of next month.

While employees will have to conform with stringent requirements to benefit from the change in law, if Wilson is successful other senior executives are likely to follow suit.

So how effective is the act from an employee's point of view, how much do employment lawyers stand to gain, and what must employers do to comply with the act?

Martin Chitty, head of employment at Wragge & Co, says: "While this act is public sector in focus and has been introduced in response to tragedies such as Piper Alpha and Zeebrugge, it applies equally well to private companies and issues such as insider dealing.

"From the whistle-blower's point of view it is very proscriptive, there are certain categories of disclosure and limited circumstances in which you can go public.

"There is a list of about 50 public agencies to which the whistle-blower is authorised to go, you can't just go off to The Sun or flog the story for a lot of money or blow the whistle as part of a personal vendetta."

Chitty says that while claimants will have to fund tribunal claims privately, campaign groups such as Greenpeace are likely to help them.

Christopher Osman, head of employment at Clifford Chance, says: "There are quite a few checks and balances. You have to satisfy certain criteria and there needs to be a lot that has gone wrong internally before you can use the act.

"We are not going to see a dam bursting in terms of numbers of cases, the act has a very sensible regime to it."

But Osman advises employers to install internal procedures in anticipation of an increase in whistle-blowing activity.

He says: "The one thing the employer will be best advised to do is to create some bespoke procedure because the act suggests you have something in place.

"However the act should hold no fears for employers."

For employment lawyers, Osman says, the act will mean "more work but not a lot more".

"It will increase advisory work, and in the ordinary rough and tumble of employment work we will get people raising issues which will touch on whistle-blowing, which we will need to keep an eye on."

He adds: "The fact there are uncapped damages is a sobering one for employers.

"The employee may also tend to spin cases by emphasising a whistle-blowing aspect in the course of an unfair dismissal case."

However, William Dawson, employment managing partner at Simmons & Simmons, says: "This is one of the few pieces of employment legislation which employers will find easy to take into account. Nobody loses and everybody gains."

Dawson says employers may ensure employee protection by adopting a short form procedure which involves inserting one or two sentences into employee contracts.

But he adds: "The concept of the act is quite straightforward but the detail is more difficult. Small private companies and the more sweatshop companies won't play by the rules any more because of this act."