06 June 2015
Whistleblowing and the meaning of ‘in the public interest’
The Public Interest Disclosure Act 1998 – often referred to as the 'Whistleblowing' Act – inserted provisions into the Employment Rights Act 1996 (ERA) in order to protect employees from unfair treatment for reasonably raising, in a responsible way, genuine concerns about wrongdoing in the workplace.
The Enterprise and Regulatory Reform Act 2013 made certain changes to those provisions, one of which was to insert the words 'in the public interest' into Section 43B(1) of the ERA so as to reverse the effect of the decision in Parkins v Sodexho Limited, in which it was held that disclosure of a breach of a legal obligation owed by an employer to an employee under his or her own contract of employment could constitute a protected disclosure.
In Chesterton Global Limited and Another v Nurmohamed, the Employment Appeal Tribunal (EAT) was called upon to decide whether or not an employee's disclosures satisfied the 'public interest test'.
Mr Nurmohamed was the director responsible for sales at estate agent Chestertons' Mayfair office. In January 2013, his employer introduced a new commission structure which he feared would have a negative impact on his salary. Having examined the accounting information in detail, he twice reported his concerns to the area director that the level of costs had been misstated and the profit and loss figures used to calculate commissions and bonus payments were inaccurate, one of the effects of which was to reduce the amount of remuneration paid to him and 100 other senior managers. He also raised the issue with the director of human relations.
Mr Nurmohamed was dismissed and claimed that he had suffered detriments and had been automatically unfairly dismissed for having made protected disclosures. His claim was upheld by the Employment Tribunal (ET). In reaching its decision, the ET held that a matter was in the public interest where a section of the public would be affected by its disclosure, rather than just the individual concerned. It found that Mr Nurmohamed believed that his disclosures were in the interest of the 100 senior managers and the belief was reasonable.
Chestertons appealed on the ground that the ET had erred in concluding that disclosures made in the interest of the senior managers could qualify as being in the public interest when these related to personal contracts in each case. Furthermore, it argued that it was for the ET to determine objectively whether or not the disclosures were of real public interest and it had failed to do so.
The EAT dismissed those arguments and upheld the ET's decision. The task of the ET in such cases is to determine whether or not the employee's belief that the disclosure was made in the public interest was objectively reasonable. The test may be satisfied even if the employee's belief was mistaken. Furthermore, the amendment to Section 43B(1) was introduced in order to do no more than prevent someone from relying upon a breach of his or her own contract of employment where the breach is of a personal nature and there are no wider public interest implications. What is sufficient to satisfy the public interest test will depend on the individual facts in each case and there will be cases in which disclosures relating to a relatively small group of people will satisfy the test. Whilst recognising that Mr Nurmohamed was most concerned about his own loss of earnings, the ET was satisfied that he also believed his disclosures were in the interest of the other managers.
The EAT also concluded that the fact that the employer in this case was a private rather than a public company had made no difference to its decision.
Hannah King, associate in the employment practice at B P Collins LLP, said: “It is advisable for employers to have a formal whistleblowing procedure in place and to make sure that all employees are aware of its contents. We can assist you in this or with any employment law matter.”