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Whistleblowing public interest test considered by Court of Appeal

13 July 2017

The Court of Appeal (“CA”) has considered the meaning of the “public interest” in whistleblowing cases. Disclosures which only affect a group of individuals within one employer can be in the public interest, but in most cases additional factors will also be needed.

Background

Whistleblowing laws protect workers who make a “protected disclosure” to their employer (or in some cases to an outside third party). There are various ingredients that need to be in place before a whistleblowing disclosure is protected in this way. The disclosure must be about one of a number of things, which includes breach of a legal obligation by the employer. The disclosure must also, in the “reasonable belief” of the worker, be in the “public interest”.

The requirement for disclosures to be in the public interest was added in order to prevent situations where a worker’s complaint about breaches of their own contract of employment would count as whistleblowing. There was concern that complaints about any breach of employment rights, such as a failure to pay wages or an incident of discrimination, were being turned into whistleblowing claims in order to give the complainant additional rights. This was not the original purpose of the law, which was supposed to encourage disclosures that were in the public interest.

There is no definition of “public interest” in the relevant legislation. This case considered the definition in the context of an employee’s complaint about the treatment of commission payments for senior managers.

Facts of the case

Mr Nurmohamed was a senior manager at Chesterton Global Ltd. He made various internal disclosures about the alleged deliberate misstating of costs and liabilities in the company’s internal accounts, which reduced the amount of commission payable to him and a group of around 100 other managers. The key question was whether this met the public interest test.

The Employment Tribunal (“ET”) decided that the disclosures were potentially in the public interest as they related to a sufficiently large group of the “public” – 100 managers were enough. The Employment Appeal Tribunal (“EAT”) agreed with this decision, and Chesterton appealed to the CA.

The CA’s decision

The CA was presented with three main arguments:

  • Chesterton argued that a disclosure which affects the private interests of a group of workers can never count as being in the public interest, no matter how many individuals are involved. The interests affected must also extend outside the workplace.
  • Public Concern at Work (which intervened in the case) argued that it was only disclosures which affected the private interests of just one worker which were not covered. Any disclosure which affected someone else in addition to the worker raising the issue would be in the public interest.
  • Mr Nurmohamed’s argument fell somewhere in-between. It is not enough for a disclosure to affect one other person, but it is not always necessary for the disclosure to affect matters outside the workplace – it depends on a number of factors and the circumstances of the case.
  • The CA agreed with the third option as argued on behalf of Mr Nurmohamed. Whether a disclosure is in the public interest will depend on all the facts of the case and sheer numbers of workers affected is not necessarily enough. The CA agreed with the ET and the EAT that Mr Nurmohamed’s disclosures were capable of being in the public interest. As well as raising matters that affected 100 other workers, the disclosures were about deliberate misstatements in accounting and concerned a substantial and prominent business in the London property market. These factors together were sufficient for a finding that Mr Nurmohamed reasonably believed the disclosures to be in the public interest.

 The CA also set out four factors relevant to the public interest test:

  • The number of individuals whose interests the disclosure served. There may be some cases where sheer numbers are enough, although in most cases additional factors will be needed.
  • The nature of the wrongdoing disclosed. In particular, deliberate wrongdoing was more likely to meet the test than inadvertent behaviour.

  • The nature of the interests affected and the extent to which they are affected by the wrongdoing disclosed. Disclosures of serious wrongdoing affecting important interests are more likely to meet the test.
  • The alleged identity of the wrongdoer. The larger or more prominent the organisation, the more likely a disclosure about it will be in the public interest.

Overall, the CA said that tribunals should be cautious to conclude that the public interest test was met just because a large number of workers are affected by a breach of individual contracts of employment, but this was not ruled out in all cases. The CA also noted that the larger the number of workers affected, the more likely that one of more of the other factors would also be involved.

Finally, the CA flagged that the test is whether the individual has a “reasonable belief” that the disclosures are in the public interest. This belief must be genuine, but there can be more than one reasonable view and there is no need for it to be the only or the predominant reason for making the disclosure.

Implications

The earlier decisions in this case (and in other cases) had been taken as suggesting that a disclosure about a breach of contract which affected just one other worker would qualify for whistleblowing protection. The CA has clearly said that this is not the case. Disclosures affecting lots of workers may be in the public interest, but generally other factors will be required. This is welcome news for employers, as the alternative approach would have meant that whistleblowing protection remained very wide.

What is perhaps less welcome is the level of uncertainty left by this decision. Whether it was reasonable to believe a disclosure was in the public interest will depend on all the circumstances of the case. This means that employers cannot be sure whether a worker’s disclosure about breaches of legal obligations under a contract of employment will count as whistleblowing.

For example, what about an individual’s complaint about sexual harassment in a particular workplace? This potentially affects others who might be subjected to the same behaviour. It is serious wrongdoing, it affects the important interest not to be harassed and discriminated against, and it likely to be deliberate. Is that sufficient to mean it is in the public interest? Or does it depend on the size and public reputation of the employer?

As the test depends on reasonable belief, it is likely that there will be increased focus in whistleblowing litigation on the worker’s reasons for believing that the disclosure was in the public interest, based around the four factors identified by the CA. Evidence from the time will be important, and this question is likely to be raised in both disclosure and requests for further information.

There are sure to be more cases in the near future which test the boundaries of the circumstances relevant to assessing the public interest. In the meantime, employers should continue to ensure that purely individual complaints by workers are dealt with through their grievance rather than whistleblowing procedure, while remaining aware that disclosures of serious wrongdoing affecting others may still raise a whistleblowing issue.

Chesterton Global Ltd v Mohamed Nurmohamedjudgment available here

 

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