Protection of a Whistleblower at a Workplace

Protection of a Whistleblower at a Workplace

The concept of whistle blowing is a new entry in the vocabulary of companies and industries. However, the increase incidents of whistleblowing has attracted the attention of the policy makers both at public and private level, i.e., of the law makers and the management of the companies.

Whistleblowing is the act of a person which involves exposure of information or any activity that is considered to be fraudulent, unethical, and corruptive.  The person can be an employee or an ex-employee as well.  The four major components of this process are:

  • The whistleblower
  • The complaint or the revelation made
  • The person to whom the complaint has been made
  • The organization to which the complaint has been made

A whistle blower is a person who discloses any information or activity that is deemed to be illegal, unethical or against public interest, to some higher authority, within an organization either private or public. The whistleblower can be divided into: Insider and Outsider whistleblower.

Whistleblowing and Laws in India:
The need for protection was given due attention by the policy makers both in public and public sector, the result is formation of the following policies:

1. The Companies Act,2013 and Whistleblowing

The Companies Act, 2013 provides for establishment of Vigilance Mechanism for companies that are:

  • Listed companies
  • Which have accepted deposits from the public
  • Which have accepted deposits from banks or other financial institutions in excess to rupees 50 crores

The vigilance mechanism will act as a medium for employees and directors also to mention their genuine concern regarding the activities of the firm or acts of others. This will help in providing a chance to avoid any threat to the interest of stakeholders and public.
The Act also provides for the position of an Independent Director, who will be responsible for ensuring and ascertaining that the vigilance mechanism is strong and people using it are safe and sound.  This will help to create a more safe, secure and transparent form of governance in the company.

2. SEBI and Whistleblowing

SEBI has provided for settlement of a whistleblower mechanism wherein any person concerned with the company can make his/her disclosure of information regarding any illegal, unethical or actual or suspected malpractice taking place in the workplace. This mechanism shall also render for safety and security to those people who come forward. Moreover, there is also a provision to go to the Chairman of Audit in certain exceptional cases. It has now been mad compulsory for the companies to formulate and enact whistleblower policies.

3. The Whistleblower Protection Bill,2011

This Bill was introduced in Parliament in 2014 and was duly passed by the Rajya Sabha and also received the assent of the President in 2014. However, the Bill is not yet operational.  It replaces the 2004 government resolution which bestows the power on the Central Vigilance Commission (CVC) to act on complaints from whistleblowers. It also vested with the power to set up a mechanism to receive complaints of corruption or misuse of power by a public servants. It aims to strike a balance between saving the honest officers from victimization and at the same time restore public’s faith in the legal system.

The Act provides that the identity of the whistleblower must be kept under wraps. Moreover, it also talks about penalising the people who attempt to disclose the identity of the complaint. However, there is no absolute rights of the complainant, he too may be penalised in case of a false information disclosure.



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