Whistleblowing and Employment Legislation

The former Chief Executive of the United Lincolnshire Hospitals Trust, Gary Walker, is in the headlines for speaking out in respect of patient safety, and expressing fear as to the consequences this will have for the £500,000 settlement he agreed subsequent to the end of his employment.

It has been reported, officially, that Mr Walker was dismissed from the Trust in 2010 for swearing openly during meetings, but he claims his dismissal was actually as a result of raising issues regarding patient care.

Employment legislation relating to whistleblowing provides protection for workers who make “protected disclosures”.

In summary, a protected disclosure is any disclosure of facts made in good faith which the whistleblower reasonably believes tends to show that one or more specific types of wrongdoing have occurred including, but not limited to, that the health and safety of any individual has been, is being, or is likely to be endangered. A disclosure will only be a protected if it is disclosed in a manner permitted by the legislation – which will usually be to the employer or a body which has regulatory authority.

Where an employee is dismissed for making a protected disclosure, the dismissal will be automatically unfair and the usual cap on the value of a compensatory award (currently £74,200) will not apply.

It has been reported that Mr Walker alleges that whilst he was pursuing a claim for unfair dismissal, a £500,000 settlement was reached in order for him to “keep quiet”.  The settlement agreement reportedly included gagging provisions and a purported right for the Trust to claw back the settlement sum and any associated legal costs in the event that they were breached.

It is not unusual for a settlement agreement entered into following a dismissal to contain clauses which require confidentiality to be maintained and for an employee to not make disparaging remarks about the employer or go to the media.  Such clauses can be difficult to enforce, as an employer may struggle to prove that a breach has occurred and/or that it has suffered a loss.  Accordingly, it is common for such terms to be subject to claw back provision of the type which reportedly apply in Mr Walker’s case.  However, to the extent that the sum to be repaid in the event of a breach of the agreement exceeds the potential loss that would result from the breach, so that the objective would be to penalise the party in breach rather than to compensate the innocent party, the provision would be unlikely to be enforceable.

We are yet to see whether the Trust will seek recovery of any settlement monies from Mr Walker. The Trust is reported to have asserted that the purpose of the settlement agreement was only to compromise employment-related claims, and not to silence Mr Walker.