At a glance

• The government is consulting on a legal duty for private sector employers with 50 or more employees, and all public sector employers, to maintain effective whistleblowing procedures, a written policy and follow-up on disclosures, backed by civil penalties.
• The government supports a Serious Fraud Office scheme paying whistleblowers a percentage of corporate fines for economic crime information.
• The consultation closes on 8 January 2027. Employers should consider responding, particularly on which employers should be in scope, how detailed and rigid any new requirements should be, and how they would be enforced.

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The government has launched what it describes as the most comprehensive review of whistleblowing law since the framework was introduced over 25 years ago. Prompted by the EU Whistleblowing Directive, the success of US reward schemes and a series of UK scandals, the consultation aims to assess if the current regime still works and how it should be reformed.

For employers, two proposals stand out: a possible legal requirement to operate whistleblowing policies and procedures, and a new financial reward scheme for those reporting economic crime to the Serious Fraud Office (SFO).

Mandatory whistleblowing policies

What is proposed?

Currently, outside certain regulated financial services firms, employers are not legally required to have a whistleblowing policy, keep disclosures confidential, investigate concerns or update the whistleblower. The consultation considers two options for reform: first, revised, more detailed non-statutory guidance; second, a legal requirement for employers to have appropriate and effective procedures, a policy explaining them, and to follow up on disclosures.

The second option has two alternative models. A more prescriptive EU-type model requiring secure, confidential reporting channels; written acknowledgement within seven days; an impartial designated person; diligent follow-up; and feedback within three months. The lighter-touch alternative model mirrors FCA rules, requiring disclosures to be properly assessed with feedback where appropriate.

Helpfully, the government confirms that follow-up would not mean formally investigating every disclosure; reasonable and proportionate assessment would suffice.

Who would be caught?

The duty would be likely to apply to private sector employers with 50 or more employees and all public sector bodies. FCA-regulated firms already subject to equivalent rules may be exempt. Phased implementation is being considered akin to the EU Whistleblowing Directive where larger employers were covered before those with 50 to 249 employees.

Enforcement

The government proposes civil penalties, such as fines, rather than criminal sanctions, and asks whether a designated government body should enforce compliance rather than leaving it to employment tribunal claims.

Practical implications

• Compliance cost and resource: Designated handlers, secure channels, case management and fixed timelines require investment, particularly for mid-sized organisations without existing infrastructure.
• Litigation exposure: Documented procedures and deadlines create a benchmark against which handling of a concern will be scrutinised in any subsequent tribunal claim.
• Confidentiality: Survey data cited in the consultation shows 36% of workers saw confidentiality risk as the main deterrent, so identity protection is likely to be central to any reforms.
• Group structures: Multinationals may need to reconcile UK requirements with, for example,  US and EU-derived regimes.

What should employers consider now?

Employers can prepare for the potential reforms by auditing existing policies against the EU-model as a likely high-water mark; mapping who receives, triages and records concerns; testing confidentiality controls; and putting in place plans to train managers to recognise disclosures.

Financial rewards for whistleblowers

The proposed mechanism

Following recommendations in the recent Review of Disclosure and Fraud Offences, the government supports an SFO scheme rewarding individuals whose significant and original information about economic crimes leads to a corporate conviction or alternative enforcement action. Rewards would be funded from the company’s penalty and paid only once the case has concluded and appeals are exhausted.

Proposals for how the scheme might operate include:

• Award size: A percentage of the corporate penalty within a set range. Overseas schemes typically use 10% to 30%, and the consultation asks whether to impose a cap.
• Factors determining awards: These could include the value of the information, cooperation, timeliness, complicity and, for workers, compliance with internal reporting systems.
• Eligibility: This would not be linked to the requirements for making a protected disclosure under the Employment Rights Act and would be assessed against separate criteria tailored to the scheme's objective. 
• Safeguards: Proposed new offences for knowingly false reports and for harassing or intimidating reporters, plus a possible independent appeals panel.

Key risks and considerations

• Bypassing internal channels: The proposed scheme may encourage individuals to go straight to the SFO, depriving employers of the chance to investigate and remediate. Whether internal reporting is rewarded will be critical.
• Self-reporting pressure: Rewards may push companies to identify and self-report earlier, compressing decision windows on whether to approach the SFO.
• Wider pool of reporters: Contractors, suppliers and overseas staff could all be eligible, extending risk beyond the local workforce.
• Managing reporters: Employers will need to handle known or suspected SFO reporters carefully, given existing detriment protections and a possible new intimidation offence.

What should employers consider now?

Employers should consider strengthening economic crime controls and investigation protocols, making internal reporting channels credible and responsive, and review self-reporting governance with the board.

Next Steps

The consultation closes on 8 January 2027 and a formal government response is expected later in 2027. Taken as a whole, the proposals in the consultation point towards a more regulated, more incentivised whistleblowing landscape. Employers that invest now in trusted internal channels will be better placed whichever options are adopted.