Deregulatory Trust: Unraveling Corporate Autonomy in Whistleblower Policies

[By Neeraj Kumar]

The author is a student of WBNUJS, Kolkata.



The idea of blowing the whistle has its meaning on a spectrum, ranging from  hero to snitch to martyr to traitor. Assuming, it is noble to attempt save lives and livelihood, the illegal consequences must be eliminated. However, this comes with a need to balance interests within employment law. The same has always been stringent regarding maintenance of confidentiality of information obtained in the course of employment through duty of fidelity or express obligation in the employment contract. Over time, this obligation has developed a defense of public interest in jurisdictions such as United Kingdom (‘UK’), commonly referred to as ‘protected disclosures’ so as to create the required balance. 

Whistleblowing is defined as the reporting by employees or former employees of illegal, irregular, dangerous or unethical practices by employers. The first Indian but ineffective attempt of the legislature narrowly defines it as any person to report an act of corruption, willful misuse of power or discretion, or a criminal offence by a public servant. Despite the already limited scope of this definition in the Whistleblower Protection Act, 2014 (‘the Act’), the same could not come into force due to national security concerns like sensitive military data leaks, and legislature sought to amend and expand the exceptions.  

The history of whistleblower regulations and the initial efforts by the US prompted a remark that don’t put your head up, because it will get blown off. Foreign jurisdictions have sought to avoid this ethical fatality by navigating technicalities to achieve their goals. However, India lags behind despite several setbacks. One infamous instance is the murder of whistleblower Satyendra Dubey in the NHAI scam case. This murder, among others, brought the foreign debates of anonymity and protection from retaliation.  

In light of this, this article analyses the current regime of whistleblower protection in India. The article then attempts to further the present regime in the Private Sector followed by a succinct discussion on plausibility of labour law to further and streamline the protection or employer retaliation.  

Inroads in the corporate sector  

After tacit public outcry, in conjunction with that of the Supreme Court ‘(SC)’ in the Satyendra Dubey case and several committees, the government established the Central Vigilance Commission ‘(CVC)’ to act upon complaints. This body exhibited numerous imperfections in its core structure and functioning, including an extremely narrow jurisdiction limited to PSUs and Central officials. However, these attempts failed to safeguard and thus promote whistleblowing, primarily due to opposition by large corporates in India.  

Nevertheless, several attempts have been made to expand the scope of Whistleblower regime, i.e., the CVC, Companies Act, 2013 and the SEBI LODR, 2015. However, the scope of these stretches only to listed companies.  

Even with regard to listed companies, this practice is mostly self-driven and has given leeway to companies to exclude vital features of any whistleblower policy. For instance, organizations like CPRI, Bangalore only allow permanent employees to raise complaints; thus, excluding most of their workforce.  

Inclusion of Private Sector  

It is argued that the private sector be included in whistleblower protection regime since unethical practices are beyond the listing agreement or public sector. As early as in 2007, the ARC recommendations boldly proposed inclusion of private sector in whistleblower protection regime. One bold move, borne out of lack of action to preclude banking related scams, was the issuance of a circular by RBI titled “Protected Disclosures Scheme for private and foreign banks operating India”. The same was formulated in effect of CVC as the authority to receive complaints. This was the first instance of coverage of any private sector organization even before the SEBI LODR brought listed companies within its ambit. 

What then primarily guides the whistleblower regime in Indian corporate sector is LODR, 2015 read with Section 177 of the Companies Act. Initially, it was suggestive in nature, however, an amendment later on mandated the vigil mechanism to be set up by all the listed companies. The clause requires the mechanism to be effective but there exists no streamlined authority/body to ensure the same, thus allowing the companies to shape their whistleblower policies as it suits their interests. However, there is nothing to keep checks and balances on these internal policies except a requirement to report details of any disclosures in annual corporate governance report of the company.  

Even internationally, G20 Anti-Corruption action plan, while citing the 2009 OECD recommendations, calls for ensuring protections in private sector. In its analysis of protections in G20 countries, it highlights the different paths taken for same end goal. For instance, as specified in the action plan, Canada does not make any distinction at all, covering both the sectors.1 Additionally, Germany has specifically used its labour law regime to further whistleblowing and crafted good faith as a protection from dismissal. With this, let us delve into interaction of Indian Labour law with the whistleblowing and retaliation associated with it.   

Indian Labour Law: Navigating the Limits 

The inadequacy evident in the preceding sections, prompts considerating whether the labor law regime provides any form of protection—albeit limited to livelihood if not life. 

The current regime does not inherently safeguard whistleblowers. However, at its core, labor law is grounded in the protection of workers against unfair treatment. Otto Kahn Freund articulates that the primary goal of labor law is to rectify the inherent inequality of bargaining power within the employment relationship. This power imbalance permits employers to dictate the terms of employment contracts, offering jobs on a “take it or leave it” basis. Such an imbalance is a contractual flaw that overlooks the socio-economic realities of societal relations. Hugh Collins further asserts that acknowledging wealth inequalities necessitates sociological intervention in the traditional freedom of contract. 

With this objective in mind, labor law legislations globally aim to shield workers from ‘victimization’ and ‘unfair dismissal.’ In India, the validity of dismissal is explored under Schedule V of the Industrial Disputes Act, 1947 (ID Act). Clauses 5(a) and (b) of the Schedule prohibit dismissals based on victimization that is not in good faith or in the colorable exercise of the employer’s rights. However, terms such as ‘victimization’ remain undefined, leaving room for interpretation. This raises the question of whether these open-ended terms can offer any protection to a whistleblower. 

Dodging Whistleblower Claims: A Trend in Jurisprudence 

The object of labour law and ID Act would allow for protection of worker from any form of retaliation on any disclosure. However, the minimal judicial decisions hint otherwise. In Pawan Hans Helicopter Ltd case, the Appellant, a pilot, had claimed that his termination was retaliation for him acting as a whistleblower regarding accidents in flying helicopters. The Court did not allow his appeal even without consideration of this contention in its judgement. Moreover, in Md. Ejaz Ahmad vs, UOI, the applicant had alleged that his transfer order is a retaliatory act to punish him for being a whistleblower. The Tribunal dismissed this contention and held the transfer as valid since it was not barred under technicalities of transfer rules.  Similar contention was raised in Padam Kumar vs. NHID, wherein the petitioner had pointed out irregularities in certain appointments. For such complaints, the petitioner was allegedly targeted and transferred. To ascertain malafide in the transfer, court said mere non-reply to the complaint does not suffice, and rejected the contention.  

In these limited cases that Courts have come across whistleblowers seeking protection under ID Act, a common trend of dodging can be observed. However, against the wind, in a case of whistleblower retaliation by Barclays, the district court of Pune has held the actions of the bank as retaliatory. It ordered the bank to pay the employee two years of salary for wrongful termination. However, the particulars of the same are unavailable yet.   

The Imperative for Legislative Action 

Given the current state, a well-crafted legislation becomes imperative to provide a clear path for bona fide whistleblowers. While a broader interpretation of victimization under the ID Act could temporarily address issues related to unfair dismissal, protection needs to extend to encompass various forms of mistreatment such as discrimination, lay off targeting, suppression of promotion, etc. 

Addressing privacy concerns is pivotal for anonymous reporting, necessitating the establishment of formal reporting channels. Without such channels, ensuring anonymity during litigation for unfair dismissal becomes nearly impossible. 

Current court cases involving Barclays and Hewlett Packard Inc (HP) may offer opportunities for a broader interpretation of the ID Act provisions. However, the author suggests that significant judicial interpretation may inadvertently cast the judiciary in a legislative role due to the ambiguity surrounding the development of jurisprudence in this area. Consequently, the author contends that legislative action is urgently needed. 

Drawing Lessons from International Jurisdictions 

The essence of labor law, as previously discussed, centers around safeguarding individuals from powerful employers. This core principle has prompted jurisdictions worldwide to acknowledge the necessity of treating whistleblower protection as an employment law concern rather than merely a corporate governance issue. A prominent illustration of this approach is found in the United Kingdom (‘UK’). Here, the framework is predominantly governed by the Employment Rights Act, 1996 (‘EA Act’), and the Public Interest Disclosure Act, 1998 (‘PIDA’). For example, the EA Act’s Section 103A deems the dismissal of an employee solely for making a protected disclosure as unfair dismissal. Additionally, Section 47b ensures that an employee must not face any detriment for making a protected disclosure. These legislations establish efficient mechanisms for protection and anonymity. Notably, the UK Supreme Court’s recent interpretation of Section 103A of the EA Act, 1996 emphasizes that the dismissal of a whistleblower cannot be concealed behind a fabricated reason, and courts should unveil the truth in such cases. 

The Indian legislature and judiciary can draw inspiration from such global legislations to advance the objectives of labor law. This ensures that existing technicalities do not impede but rather facilitate the protection of whistleblowers. By incorporating lessons learned from international frameworks, India can strive to create a comprehensive and effective legal environment that aligns with the fundamental principles of labor law. 


In closing, delving into whistleblower protection under current labor laws reveals some notable gaps. While the core tenets of labor law aim to shield workers from unjust treatment, the existing framework lacks explicit provisions safeguarding whistleblowers. The tendency of judicial decisions to downplay whistleblower claims underscores the pressing need for a comprehensive legislative remedy. Moving forward calls for a nuanced law that goes beyond protecting against dismissal, encompassing various forms of mistreatment. Crucially, addressing privacy concerns and setting up formal reporting channels are pivotal for robust whistleblower protection. Looking to global practices, particularly the United Kingdom, offers a valuable blueprint for India to fortify its labor laws, ensuring that technicalities act as enablers, not impediments, in championing whistleblower rights. 


Leave a Reply

Your email address will not be published. Required fields are marked *

Contact Us

Kerwa Dam Road., 
National Law Institute University, Bhopal
Madhya Pradesh, India. 462044​.

write to us at –