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“Whistle while we work…” When is a protected disclosure in the public interest?

To bring a successful whistleblowing claim the claimant must have made a “protected disclosure” in the reasonable belief that the disclosure was in the “public interest”. The public interest requirement was added to whistleblowing legislation in 2013 to reverse the decision in Parkins v Sodexho and ensure that whistleblower protection does not extend to disclosures of a personal nature tending to show breaches of the worker’s own contract.

The Court of Appeal has recently considered the public interest test in the case of Chesterton Global Limited v Nurmohamed (see our previous report here).  The Court dismissed the employer’s appeal and found that, in determining whether the claimant had a reasonable belief that their disclosure was in the public interest, a Tribunal must consider all the circumstances of the particular case and not just the number of people with an interest in the subject matter of the disclosure.  Although the claimant’s disclosure related to an alleged breach of his own employment contract, his belief that the disclosure was in the public interest was reasonable.

Background  

Mohamed Nurmohamed (MN) was an estate agent employed by Chestertons as director of its Mayfair office.  He was dismissed in October 2013 after he made various complaints about the decision by his employer to reformulate its commission scheme as well as what he alleged to be fraudulent accounting, the purpose of which was to do himself and other senior managers out of commission.  Commission had previously been calculated based purely on the sales revenue each office brought in but from the beginning of 2013 it was changed so that commission was based instead on the profit of each office.  MN was concerned about the impact this would have on his commission earning potential and over the coming months he monitored Chestertons’ internal accounts.  From August through to October MN in various meetings with his superiors complained about what he alleged were examples of artificial suppressing of profitability by between £2m and £3m within the internal accounts which he believed was being done intentionally to reduce the level of commission payable to about 100 senior managers.

MN brought various claims including a claim for automatic unfair dismissal under s.103A of the Employment Rights Act 1996 on the grounds that he was dismissed because he had made protected disclosures. One of the central issues in dispute was whether MN made his disclosures in the reasonable belief that they were in the public interest.

Chestertons argued that MN’s concern was entirely private and could not therefore be regarded as being in the public interest, whereas MN said he was thinking also about the 100 or so senior managers who were similarly affected and that the numbers involved meant it was not private and so had to be public. The Tribunal found that MN was conscious of the effect this commission change would have on the other 100 or so other managers and because of this it was not just a private matter, but rather a public interest matter.

Chestertons appealed to the EAT on the grounds that the Employment Tribunal judge applied the wrong test for public interest. The EAT disagreed, dismissing the appeal and so Chestertons appealed to the Court of Appeal. 

Judgment

The Court of Appeal dismissed Chesterton’s appeal and upheld the Tribunal’s view that, although MN’s disclosure related to an alleged breach of his own contract of employment, he had a reasonable belief that his disclosure was in the public interest. They commented that “In a whistleblower case where the disclosure relates to a breach of the worker’s own contract of employment…. where the interest in question is personal in character, there may nevertheless be features of the case that make it reasonable to regard disclosure as being in the public interest as well as in the personal interest of the worker. The question is one to be answered by the Tribunal on a consideration of all the circumstances of the particular case.” 

“.. Specifically, the disclosure was of what was said to be deliberate wrongdoing, and the alleged wrongdoing took the form of mis-statements in the accounts to the tune of £2m-£3m. If the accounts in question were the statutory accounts, even of a private company, the disclosure of such a mis-statement would unquestionably be in the public interest. The fact that the accounts in question were only internal makes the position less black-and-white; but internal accounts feed into the statutory accounts, and we are dealing here with a very substantial and prominent business in the London property market.”

The Court considered that relevant factors include:

  • The numbers in the group whose interests the disclosure served;
  • The nature of the interests affected and the extent to which they are affected by the wrongdoing disclosed;
  • The nature of the wrongdoing disclosed; and
  • The identity of the wrongdoer.

The number in the group affected by the alleged wrongdoing is therefore only one piece of the jigsaw.

Comment

Now that the focus is off numbers alone and onto a range of factors such as status of the wrongdoer, one could imagine certain scenarios potentially passing the new test, for example, raising a complaint about bullying or harassment by a senior manager, especially where several others may also be suffering. Arguably, the important status of the wrongdoer and the deliberate nature of bullying or harassment could feasibly compensate for the low numbers affected by the wrongdoing and satisfy the new test.Employers should review their whistleblowing policies in the light of this decision to provide guidance about the scope of the policy and make it clear that complaints of a personal nature or about the employee’s own contract of employment should be brought under the grievance procedure in the first instance. Managers and those considering both grievances and complaints under the whistleblowing policy should be trained not to make assumptions about whether a particular complaint is likely to be in the public interest, to take care to treat complainants respectfully and not to subject them to any form of detrimental treatment.

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Legal news, views, trends and tools for HR Professionals. Stay ahead. Go further