Alerts

Disclosures in the Public Interest

Changes introduced in 2013 prevented workers from bringing whistleblowing claims, having complained about a breach of their own contract of employment. Under the revised rules, the worker making the disclosure had to reasonably believe that a disclosure of wrongdoing was being made in the public interest.

If a worker raises concerns about something which affects their personal wages, but also the wages of many colleagues, can that be in the public interest or is it just a collection of individual interests? This was recently considered by the Court of Appeal.

Chesterton Global Ltd v Nurmohamed

Mr Mohamed Nurmohamed, an estate agent, was employed by Chesterton Global Ltd. As is industry standard, he received a basic salary plus commission which, in turn, was dependent upon profitability. During his employment with Chesterton, he formed the belief that the company was exaggerating expenses in order to reduce profits, such that commission payments would be reduced. Mr Nurmohamed monitored the internal accounts over a period of time and found, amongst other discrepancies, an unusually high depreciation charge and an entry in the accounts for “staff bonus” when no bonus had been paid.

The commission ‘pot’ covered about 100 employees, including Mr Nurmohamed, and he claimed it was being reduced by £2-£3 million. He raised his concerns and was dismissed.

Mr Nurmohamed brought a claim that he had been unfairly dismissed, on ordinary unfair dismissal principles, and that he had been unfairly dismissed on the basis of having made a protected disclosure. In other words, that he was a whistleblower. Chestertons accepted liability for ‘ordinary’ unfair dismissal but contested that he was a whistleblower. This is important, as compensation is not capped in whistleblowing claims.

In order to succeed with his whistleblowing claim, he would need to show that he disclosed information which he reasonably believed he was making in the public interest and tended to show that a person had failed or was likely to fail to comply with any legal obligation to which he was subject or that information had been or was likely to be deliberately concealed in relation to such failure.

The key question for the Court of Appeal to consider was whether a disclosure which served Mr Nurmohamed’s personal interests could be found to have been made in the public interest because the wrong also affected the personal interests of his co-workers.

Decision

The Court of Appeal held that the protected disclosures in question were made in the public interest. Mr Nurmohamed’s belief that they were in the public interest was supported by the facts, namely that there was 99 other employees who were in the same situation and had been raising the issues.

Just because a disclosure is in the worker’s own personal interest, it doesn’t prevent it from also being in the public interest. Taking guidance from representatives in the hearing, the Court of Appeal agreed that the following factors will be relevant to assessing whether a disclosure of this kind is made in the public interest:

  1. The number of individuals whose interests the disclosure serves;
  2. The nature of the interests affected and the extent to which they are affected by the wrongdoing disclosed – a disclosure of wrongdoing affecting a serious interest is more likely to be in the public interest than trivial wrongdoing affecting the same number of people, especially if the effect is marginal or indirect;
  3. The nature of the actual wrongdoing – disclosure of deliberate wrongdoing is more likely to be in the public interest than the disclosure of inadvertent wrongdoing;
  4. The identity of the alleged wrongdoer – if they are more ‘prominent’, a disclosure is more likely to be in the public interest.

The Court went on to qualify the first of these factors by saying that each case should be assessed on its facts – it would be slightly perverse if a disclosure about wrongdoing carried greater protection simply because it related to significantly more people.

Comment 

Whistleblowing claims are notoriously complex. Statistically, they carry very low success rates in the employment tribunal and also have the highest proportion of costs awards against claimants.

The importance of adequately investigating matters cannot be stressed enough. When an employer receives a complaint from a worker, they should take a step back and consider whether the complaint could amount to a protected disclosure, as well as an ‘ordinary’ grievance. Employers should always be mindful of the protection afforded to whistleblowers and ensure that they aren’t subjected to any detriment or dismissed because they have made a protected disclosure. The term detriment can include a wide range of acts or omissions, including failing to promote an employee or subjecting them to disciplinary action or closer monitoring. Compensation for whistleblowing claims is uncapped in the employment tribunal.

It is important to take detailed advice when faced with a whistleblowing claim. Whilst employers can be liable for acts of their employees, they have a defence to claims if they can show that they took all reasonable steps to prevent the detrimental treatment. Employers should give consideration to implementing a whistleblowing policy which sets out how to raise concerns, how they will be dealt with and specifically how employees and managers must behave towards a colleague who has blown the whistle. Training managers on the policy and dealing with any whistleblowing issues swiftly will go a long way to give the employer the benefit of the defence.

If you would like any advice in relation to whistleblowing or have any other employment law or HR queries, please contact Joanne Holborn, Tom Scaife or Caroline Rayner on 01228 552600 or 01524 548494.

Email Alerts

Baines Wilson LLP send our clients and contacts legal updates by way of short email alerts. If you would like to receive our regular alerts, please follow the link below.

Sign up for Alerts

Awards & Accreditations

  • Lexcel
  • Legal 500 Top Tier 2015
  • Chambers UK
  • Supply Chain