More than two thirds of employers do not have a policy on illegal software, according to figures from the Federation Against Software Theft (FAST).
FAST surveyed employees from 100 companies, of which 68 said their bosses did not have a policy. Some 30 respondents did not know whether or not their company's software was valid.
The figures also showed that, of those who directly answered the question, most employees would report their bosses if they knew they were using pirated software, with belief in best practice cited as the main motivation for doing so.
The results were close, with 48 per cent of those who responded saying that they would keep quiet compared to 52 per cent who would blow the whistle on software piracy. This figures does not include the 38 respondents who chose not to answer.
The majority of the 100 respondents did not know that whistle-blowing legislation exists to protect employees from being victimised at work or losing their jobs if they report wrongdoing.
Julian Heathcote Hobbins, general counsel at FAST, appreciates that employees can be reluctant to disclose information.
He said: "Mixed feelings about whistle-blowing are understandable, but not doing so may be counter-intuitive. Serious compensation can be payable if your employer acts illegally when a protected disclosure is made. Reports can be made anonymously."
Robin Fry, partner at commercial law firm DAC Beachcroft and member of FAST's Legal Advisory Group, said the problem is not limited to knowingly pirated software.
He said: "Using business software for more people or servers than licensed is treated the same as using pirated or counterfeit software – both are infringements and both can be criminal offences.
"Disclosure of such misuse is therefore protected by UK's whistle-blowing laws, whether made by those in employment, agency workers or by ex-employees."
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