Whistleblowing - EAT Considers the "Public Interest" Test

April 14, 2015

In Chesterton Global Limited and anor v Nurmohamed the Employment Appeal Tribunal (“EAT”) has considered for the first time the public interest test introduced into the UK’s whistleblowing legislation in 2013. 

In order to be protected against detriment or dismissal under the UK whistleblowing legislation, a worker is required to have made a “protected disclosure”. Amongst other requirements, a protected disclosure must tend to show that one or more of the six specified types of wrongdoing (such as a failure to comply with a legal obligation or a miscarriage of justice) has taken place, is taking place, or is likely to take place. In 2013 the test of what constitutes a protected disclosure was amended to add an explicit public interest aspect - the disclosure must also, in the reasonable belief of the worker making the disclosure, be made in the public interest. 

The change made in 2013 was intended to ensure that the whistleblowing legislation only provides protection in relation to matters of genuine public interest rather than breaches of individual contractual obligations, and to reverse the effect of the decision in Parkins v Sodexho. In that case, the EAT held that a protected disclosure attracting the protection of the whistleblowing legislation could be made about an actual or alleged breach of a whistleblower’s own contract of employment - on the basis that it related to a breach of a legal obligation (under that employment contract). This interpretation of the legislation meant that employees, especially those who had not attained sufficient service to be able to bring an unfair dismissal claim in the normal course, would be able to benefit from the protection of the whistleblowing legislation – which applies regardless of length of service and for breach of which compensation awards are unlimited - if they complained about the employer breaching its obligations and were prejudiced or dismissed as a result of making such a complaint. 

In Chesterton, Mr Nurmohamed was a director of the Mayfair office of Chesterton Global Limited, a firm of estate agents. He made three alleged protected disclosures, one of which was made to his employer’s Director of Human Relations. Mr Nurmohamed reported his belief that the employer was deliberately misstating £2-3 million of actual costs and liabilities through its office and department network and argued in effect that the consequence of the employer’s alleged conduct was that senior managers, including himself, received lower bonuses than they might otherwise have received, thereby increasing the employer’s profitability. 

The Employment Tribunal concluded that Mr Nurmohamed had held a reasonable belief that his disclosures were in the interest of 100 senior managers, and that this was a sufficient group of the public for his disclosure could reasonably be believed to be in the public interest. Although Mr Nurmohamed was primarily concerned about his own position (i.e. the potentially adverse effects that the alleged treatment of the employer’s accounts had on his own bonus), the Employment Tribunal accepted that Mr Nurmohamed did have the employer's other office managers in mind. The Tribunal found that he had made a protected disclosure, had been automatically unfairly dismissed and that he had been subjected to detriments on the grounds that he had made protected disclosures. 

The EAT rejected the employer’s appeal against the decision of the Employment Tribunal and found as follows. The EAT considered that the sole purpose of the amendment to the whistleblowing legislation in 2013 - to add the explicit public interest test - was to reverse the effect of Parkins v Sodexho and therefore remove the possibility of opportunistic use of the whistleblowing legislation for private purposes. The words “in the public interest” were introduced to do no more than prevent a worker from relying upon a breach of his own contract of employment where the breach is of a personal nature and there are no wider public interest implications. The employer’s arguments to the effect that this was a private and personal dispute rather than a public one were rejected. 

In reaching this decision, the EAT noted that: 

  • A relatively small group of individuals affected by the subject matter of a disclosure may be sufficient to satisfy the public interest test – and this is necessarily fact-sensitive. 
  • The test to be applied is not whether the disclosure is in the public interest but, rather, that the worker’s belief that the disclosure was made in the public interest was reasonable. This is to be assessed objectively and the test may be satisfied even if the employee’s belief is incorrect. 
  • The fact that the employer was a private, rather than publicly listed company, was not relevant to establishing whether or not the disclosures were made in the public interest. 

This decision is a useful reminder of the precise operation of the public interest test in whistleblowing cases – the assessment is of the worker’s reasonable belief – but also suggests that establishing that a worker had a reasonable belief that a disclosure is in the public interest may not be a particularly high burden for those seeking the protection of the legislation.

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