What is whistleblowing and does your small business need a policy in place?

David Woodfield
By David Woodfield, Chief Growth Officer

Whistleblowing in the workplace isn’t widely known. In fact, just over 1 in 4 (27%) of employees in small businesses admit to having no idea whether they have a whistleblowing policy, according to Personio. But it turns out, that the same research says that 75% of employers do have a whistleblowing policy in place. 

There’s clearly a disconnect between employers and small businesses when it comes to whistleblowing — and raising concerns within a business. But what even is whistleblowing and do you need a proper policy with it?

collage of grey faces with one red face with a whistle

What is a whistleblower?

A whistleblower is someone who usually works for a company (an employee) and passes on information about the business's wrongdoing to the company or an official third party. Passing on this information is known as ‘blowing the whistle’. But, what is considered a ‘wrongdoing?’

Imagine you notice something seriously wrong in your workplace or within an organisation — this could be anything from lack of safety equipment or no procedures in place to employees stealing money from the tills or worse  — you know it isn’t right and should be reported, but what do you do? You report these issues and ‘blow the whistle’. 

But, it’s not always an easy path once the whistle is blown. Speaking out can come with some major risks, like facing negative reactions from colleagues or an employer. Under the Employment Rights Act 1996, workers have a right to take a case to an employment tribunal if they have been victimised at work or lost their job because they have ‘blown the whistle’.

What can be considered whistleblowing?

When it comes to what can be raised under a Whistleblowing Procedure, there are a wide range of concerns: 

  • Criminal offences —  This includes reporting any illegal business activities. This can be anything from embezzlement, fraud, corruption, physical assault or even illegal drug activities. Whistleblowers are needed in these situations as they can bring to light serious crimes that might otherwise go undetected and hurt people in the process.
  • Unlawful acts — These are acts that break specific laws or regulatory requirements. They might include non-compliance with safety regulations, breach of environmental laws, violation of data protection rules or not paying minimum wage requirements. Reporting these acts is key for ensuring that organisations operate within UK law.
  • Improper or unethical behaviour — This related to behaviour or conduct, while not necessarily illegal, is morally or ethically questionable or wrong. This can include things like discrimination, harassment, conflicts of interest or misuse of company resources. People who whistleblow on these behaviours hold a business to an ethical standard and maintain a culture with morals and professional values.
  • Endangering the health or safety of others — When people's health and safety are put at risk, it must be reported. Whether it’s unsafe working conditions, failure to follow health and safety protocols, improper handling of hazardous materials, or not maintaining equipment safety with a risk of injury.
  • Miscarriage of justice — This involves situations where there is an unfair or biased legal or disciplinary process within the organisation. Whistleblowers who expose these usually highlight things like wrongful dismissal, and biased grievances, for example.
  • Financial malpractice — Things like financial fraud, creating fake financial statements, money laundering or similar and insider trading are all forms of financial malpractice. Whistleblowers help to protect the financial assets of a business, protect stakeholders' interests and prevent big financial loss. 

Who is protected by law?

By law, most people are protected so long as they make a proper case. This includes:

  • Employees
  • Workers
  • Apprentices
  • Agency workers
  • NHS practitioners
  • Student nurses
  • Student midwives
  • Police force
  • Office holders
  • Self-employed doctors, pharmacists, dentists and ophthalmologists working in the NHS

Who isn’t protected by law?

People usually aren’t protected by the law if they are:

  • Volunteers with no enforceable employment contract
  • Non-executive directors
  • Members of the armed forces
  • Self-employed
  • A solicitor or barrister learning about an issue covered by professional privilege
  • A crown employee dealing with national security, such as people who work for MI5 or MI6

What can whistleblowing mean for businesses?

There are positives and negatives if someone blows the whistle within your business:

On the positive side, whistleblowing helps with transparency within businesses. An individual bringing to light unethical and illegal practices – which, in some cases, the business owners or those higher up may be unaware of — can help businesses fix these issues before they get really bad. This could save the company from lengthy legal battles, financial loss and damage to reputation that can’t be repaired. 

On the flip side, it also has some serious challenges for a business. If people find out about misconduct, it could lead to bad press and legal issues and it could damage the reputation with suppliers and clients.  As the whistleblower, there’s also the risk of a backlash from colleagues and bosses, which can affect feelings toward their job as well as impact workplace dynamics. 

Can a whistleblower remain anonymous?

In some cases, a whistleblower may choose to make a report to an employee or third party without anyone knowing who they are. But, in these circumstances, the matter may not be able to be taken further if the whistleblower hasn’t provided enough evidence or information.

It’s also important to stress that remaining anonymous doesn’t mean that people won’t suspect who the source is. Another way to stay anonymous is by making a confidential report. Essentially, this means that the person you are talking to will know your identity, but they must make every effort to protect the whistleblower's identity. 

What’s the difference between whistleblowing and a complaint or personal grievance?

A complaint or personal grievance can be about anything, but for it to become whistleblowing, the employee must disclose information that shows the company is breaking the law. 

A whistleblower’s complaint must be relevant to the business in some way, it can’t be a personal complaint, for example. 

What do you need to include in a whistleblowing policy?

An official whistleblowing policy should be strongly considered for businesses. This is to make sure concerns are raised and handled properly while protecting those who come forward as much as possible. 

Definition of whistleblowing with examples

The policy should begin with a definition of whistleblowing, which involves reporting suspected wrongdoing or risks to the organisation or the public. 

It’s important to include examples such as reporting fraud, legal violations, corruption, unethical behaviour and health and safety risks to help employees understand the types of concerns that fall under this policy.

Statement of employer’s commitment

This section should have a strong commitment from the employer to ethical conduct and the importance of whistleblowing in keeping these standards. It should reassure employees that whistleblowing is an important and valued part of the organisation's integrity and welfare.

Protection of the whistleblower

The policy should include protection for those who raise concerns in good faith. This means making sure they don’t get backlash in retaliation, victimisation or career disadvantages. Where possible, it must also be stated whether an employee would be able to remain anonymous in certain circumstances.

Bad faith or malicious reporting

The policy should state the difference between good-faith reporting and malicious or knowingly false allegations. It should clearly state that fake reporting is not accepted and cause disciplinary action for the employee reporting.

The whistleblowing process 

A detailed procedure for raising a concern should be outlined within the policy. This should include the different channels for reporting — including line managers, a designated officer within the business or an external third party or hotline. This helps to ensure that employees feel safe and have an accessible way to voice their concerns. 

Timings and feedback

A good whistleblowing policy should outline a clear timeframe for acknowledging the whistleblowing report and for how long the investigation process is going to take. 

Regular updates should also be provided to the whistleblower, keeping them informed throughout the entire process.


The policy should also show the organisation's commitment to maintaining confidentiality to protect both the whistleblower and anyone else — such as people who have been accused of wrongdoing — until the final decision has been made. 

It should also detail how the business will handle the information discreetly and securely.

The right to be accompanied

This should clarify the whistleblower’s right to have someone present during any meetings or hearings related to their report. This can be a colleague, union representative or legal advisor providing additional support and representation. 

Support and advice

It’s key to offer support and provide access to advice for the whistleblower and anyone else involved. 

The policy should include information about any internal support systems — such as HR or employee assistance programmes — and external resources, including legal advice or counselling if needed. 

Settlement agreements

Whistleblowing policies should make it clear that any confidentiality clause included in a settlement agreement — also known as a compromise agreement, which can be used to resolve or avoid a workplace legal dispute between an employee and employer — will not be effective in a whistleblowing situation.

Is a whistleblowing policy a legal requirement?

Unlike publicly listed companies, small businesses legally don’t have to have their own whistleblowing policy. But, the impact of whistleblowing can be bad for business, no matter the size, and it’s important to have a proper written policy in place to ensure that the process is handled correctly. 

Get your business set with Bionic

It's clear that understanding and supporting whistleblowing is not important for compliance but makes sure a business operate with ethical procedures in place. 

In the meantime, for all things business, get in touch with our team here at Bionic, who can help you get the best deals on your business insurance, or check out our broadband, phone and VoIP services to get your business on the right track. 

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