When whistleblowing is “in the public interest”


19 July 2017

In the case of Chesterton Global Limited v Nurmohamed, the Court of Appeal has provided a degree of clarification at to what “in the public interest” means for the purposes of UK whistleblowing protection.

 

Legal background of whistleblowing

In 2013, changes were made to UK whistleblowing law intended to prevent individuals from claiming protection when pursuing alleged breaches of their own contracts of employment. Section 43B(1) Employment Rights Act 1996 was amended so that only disclosures which an individual reasonably believes are made “in the public interest” are now capable of falling within the definition of a “qualifying disclosure” and, therefore, of attracting legal protection for the individual making the disclosure.

In the intervening period, what is “in the public interest” has come under scrutiny. In one recent tribunal case, for example, a dispute over employment terms raised by three employees was found to potentially qualify for whistleblowing protection because an issue of employee safety (and, therefore, public interest) was implicit in the individuals’ allegations (Underwood v Wincanton). The Court of Appeal’s clarification on the meaning of this critical phrase, “public interest”, is accordingly significant for the application of UK whistleblowing law and the effect of the 2013 changes.

 

Case Background

Mr Nurmohamed was a director at an office of the estate agency, Chestertons. He raised allegations that the company had deliberately manipulated office accounts to reduce bonus and commission payments, affecting some 100 or so managers including himself. He was later dismissed and brought claims of unfair dismissal and detriment arising from whistleblowing (ie as a result of his “protected” disclosures).

Before the employment tribunal, the question arose whether Mr Nurmohamed reasonably believed there to be a wider public interest in his complaints, as the law requires, or they stemmed from a personal grievance over pay -of the kind the 2013 changes sought to exclude from whistleblowing protection.

 

Tribunal decision

The employment tribunal found the fact that a substantial number of other managers were affected by Mr Nurmohamed’s allegations of employer-impropriety to be significant. On the question of “public interest”, the tribunal was satisfied that the legislation cannot have been intended to mean something which is of interest to the entirety of the public, so that the words necessarily refer to a section of the public, such as might arise in the context of alleged hospital negligence or disclosures about drug companies, for example. In this case, since 100 or so senior managers were affected by the allegedly fraudulent behaviour of the company, they were found to represent a sufficient group of the public to support a “public” interest. Accordingly, the tribunal upheld Mr Nurmohamed’s complaints.

On appeal, the EAT focused upon the wording of section 43B(1) and the fact that, whether a disclosure is in the public interest, hinges upon two factors: the reasonable belief of the individual as to the truth of the allegation but also its public significance. In this latter respect, Mr Nurmohamed was found to hold an objectively reasonable belief that there was a public interest element to his allegations and he was therefore found to be protected by the legislation. Applying an earlier Court of Appeal decision of Babula v Waltham Forest College, the tribunal also found that this would be the case, even if the basis of his disclosure was wrong and/or there was in fact no public interest in the disclosure, if the belief was reasonably held.

 

Court of Appeal conclusions

Upholding the earlier decisions in principle, that Mr Nurmohamed’s disclosures were capable of being in the public interest, the Court rejected a purely numbers based approach to the “public interest” (whether disclosure affects just one other person or multiple persons) or an approach based upon the subject-matter of a disclosure. Instead, the Court of Appeal found that the correct approach is to view each case on its own merits and that, in doing so, personal and public interests are not mutually exclusive. So, for example, where a disclosure relates to a breach of the worker’s own contract of employment (or some other matter under section 43B (1) where the interest in question is personal in character), there may nevertheless be features of the case that make it reasonable to regard disclosure as being in the public interest as well as in the personal interest of the worker. An example given was that of a disclosure tending to show that hospital doctors were being required to work excessive hours, an issue which might well be in the public interest, as well as in the personal interests of the doctors themselves, because of the risk to patients.

The Court of Appeal also endorsed four factors which it concluded might provide a “useful tool” in considering such this issue in future:

  1. the numbers in the group whose interests the disclosure served –the higher the number, the greater the likelihood of a public interest arising;
  2. the nature of the interests affected and the extent to which they are affected by the wrongdoing disclosed – a disclosure of wrongdoing directly affecting a very important interest is more likely to be in the public interest than a disclosure of trivial wrongdoing affecting the same number of people, and all the more so if the effect is marginal or indirect;
  3. the nature of the wrongdoing disclosed – disclosure of deliberate wrongdoing is more likely to be in the public interest than the disclosure of inadvertent wrongdoing affecting the same number of people;
  4. the identity of the alleged wrongdoer – “the larger or more prominent the wrongdoer (in terms of the size of its relevant community, i.e. staff, suppliers and clients), the more obviously should a disclosure about its activities engage the public interest”.

 

Comment

Although the aim of the 2013 changes was to prevent perceived opportunistic use of breaches of an individual’s contract of a personal nature, it was not their intention (nor would it have been appropriate) for the provisions to operate to exclude such breaches where they also raise issues of public interest. The Court of Appeal decision now provides important insight into how courts –and therefore employers – need to approach the issue of “public interest” in future. Even so, going forwards, this is unlikely to prove a straight forward exercise for employers. Employers should review carefully the nature and potential impact of an alleged disclosure and the likelihood of a discloser demonstrating a reasonable belief in its veracity and wider implications before concluding that it is purely personal in nature and that the individual falls outside whistleblowing protection.

 

Naeema Choudry, Partner
e: naeemachoudry@eversheds-sutherlands.com
t: +44 161 831 8283