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EAT confirms the whistleblowing 'public interest' test

The recent case of Chestertons v Nurmohamed has provided the first appellate decision to consider the meaning of the words 'in the public interest' which were inserted into whistleblowing provisions of the Employment Rights Act 1996 (ERA 1996) by the Enterprise and Regulatory Reform Act 2013 (ERRA 2013).

Upholding an employment tribunal's decision, the EAT has held that it is not necessary to show that a complaint was of interest to the public at large for it to qualify as a protected disclosure under the legislation; as it is inevitable that only a section of the public will be directly affected by any given disclosure. The complaint's being of interest to a finite, relatively small group may be sufficient to satisfy the 'public interest' test. In any event, a worker need only demonstrate that they reasonably believed that the disclosure was in the public interest.

The basis for whistleblowing protection

A worker must have made a 'qualifying disclosure' in order to be protected against detriment or dismissal under the whistleblowing legislation. This means any disclosure of information which the individual reasonably believes shows that one of a number of types of wrongdoing is taking, has taken or is to take place, and that its disclosure is in the 'public interest'.

Previous case law (namely Parkins v Sodexho Ltd [2002]) had allowed a worker to rely on a breach of his own employment contract where there were no wider public interest implications at play. The government felt that that case fundamentally changed the nature of the whistleblowing legislation, widening its scope beyond what was originally intended, and so brought in the express public interest qualifier via the ERRA 2013 to reverse that erroneous common law development.

'Reasonable belief'

In order to succeed in a whistleblowing claim, a worker must be found by the tribunal to have subjectively believed that the relevant wrongdoing has occurred (or is/ would have been likely to occur), where that belief was, objectively, reasonable. It does not matter if the belief subsequently turns out to be wrong, or if the facts alleged would not in fact amount in law to the relevant failure.

Following the ERRA 2013 amendments, the worker must also be able to demonstrate that they reasonably believed that the disclosure was 'in the public interest'.

The facts in Chestertons v Nurmohamed

Nurmohamed, a director in the Mayfair office of Chestertons' estate agency, made three disclosures about manipulation of the firm's accounts during 2013. He asserted that the firm was deliberately overstating costs and liabilities for its London office by £2-3million, which he believed had an adverse effect on commission income for 100 senior managers, including himself.

The whistleblower was dismissed and brought various claims against Chestertons. A tribunal found that he had been automatically unfairly dismissed and that the company had subjected him to detriments on grounds that he had made protected disclosures. Noting the lack of any authority on the meaning of "in the public interest" in this context, the tribunal remarked that it was not required that a disclosure had to be of interest to the entirety of the public, as it was inevitable that only a section of the public would be directly affected by any given disclosure.

Although Nurmohamed was mainly concerned with his own financial position, the tribunal was satisfied that he had in mind the other senior managers, whose income would also be affected by the alleged accounting malpractice.  It concluded that, despite Nurmohamed's personal motivations, this was a sufficient group of the public to amount to being a matter of 'public interest'.

Chestertons appealed the finding that the disclosure was made in the public interest.

The EAT decision

Although Chestertons sought to argue that the tribunal must itself determine whether the disclosures were made in the public interest, this was not what the statute required. The correct question under the ERA 1996 is whether the whistleblower has a reasonable belief that the disclosure is made in the public interest.  

Agreeing with the tribunal, the EAT accepted that the public interest test can therefore be satisfied even where the whistleblower's purpose is wrong and/or there is no public interest in the disclosure being made. All that matters here is that the worker's belief that it was in the public interest was objectively reasonable.

The EAT rejected Chestertons' argument that the dispute was one of a private nature, even though 100 other senior managers were affected.  It was satisfied that Nurmohamed did have the other senior managers in mind when making the disclosure. He believed that Chestertons was deliberately misstating its accounts throughout its sales department, leading to the conclusion that a section of the public would be affected, and so the public interest test was satisfied. The fact that Chestertons was a private (rather than a public) company was not relevant to whether or not the disclosures were in the public interest.

The objective of the whistleblowing legislation is to protect workers from unfair treatment for reasonably raising genuine concerns about wrongdoing in the workplace.  The EAT confirmed that the sole purpose of the ERRA 2013 amendment was to reverse the effect of Parkins v Sodexho; so preventing a worker from relying on a breach of his own contract where the breach is personal, and has no wider public interest implications.  

It should be borne in mind that the ERRA 2013 amendments removed the 'good faith' test from the whistleblowing legislation. There is no longer a need for a worker to establish that they were acting in good faith when making a qualifying disclosure in order for that disclosure to be protected: provided the worker reasonably believes the disclosure to be in the public interest, its being made maliciously should not of itself prevent the disclosure from being a protected act under the legislation (any 'bad faith' element of the disclosure now impacts only on the potential recovery of damages following tribunal action).

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