The legal background

Whistleblowing legislation is important because it encourages workers to raise important issues such as breaches of legal obligations or health and safety concerns with their employers, without fear of being subjected to a detriment for doing so. Whistleblowing protection is given to workers under the Public Interest Disclosure Act 1998 (PIDA).

Despite PIDA’s title, for many years there was no requirement for a disclosure to be made in the ‘public interest’ for it to qualify as a disclosure. This led to employees using complaints about breaches of their own employment contracts (e.g. a breach of trust and confidence, or an incident of racial harassment which were personal only to them) as a basis for bringing a whistleblowing complaint (Parkins v Sodhexo). In other words the employee would argue that a complaint made by them that their employer had breached its obligations to them amounted to a ‘disclosure’ for the purposes of PIDA. Arguably the legislation was not ever intended to apply to these private employment situations.

Categorising a complaint as ‘whistleblowing’ rather than ordinary unfair dismissal is important because neither the cap on unfair dismissal nor the usual qualifying period for unfair dismissal applies in a whistleblowing case. This meant that tactically many employees were alleging breaches of their own employment contracts and categorising it as ‘whistleblowing’ in order to benefit from the more generous compensatory awards associated with whistleblowing complaints. In practice we saw this commonly used as a tactic by employees and their representatives.

A legislative amendment was made in 2013 so that with effect from 25 June 2013, a disclosure will only be a qualifying disclosure if the worker reasonably believes that the disclosure is in the ‘public interest’. No definition is given of what is meant by ‘public interest’. Does it mean that the worker needs reasonably to believe that it is of interest to the general public, or would it be enough that it would be of interest to a section of the public for a disclosure to qualify as in the ‘public interest’?

The public interest test

The Employment Appeal Tribunal has recently considered for the first time the question of what amounts to ‘public interest’ for these purposes. In Chestertons v Nurmohamed a senior manager at Chestertons had made three disclosures about manipulation which he believed was happening to the company’s accounts and which he believed was having an adverse effect on commission arrangements for a large group of around 100 senior managers, including himself. He believed that the company was deliberately supplying inaccurate profit and loss figures to its accountant, which overstated actual costs and liabilities incurred, which in turn resulted in lower commission payments to him and the other senior managers.

The EAT found that although only 100 people (the senior managers) were affected by Mr Nurmohamed’s disclosures, this was enough to satisfy the ‘public interest’ test. It was not necessary for the employee to show that a disclosure was of interest to the public as a whole. It was inevitable that some disclosures would only directly affect certain sections of the public.

Chestertons is a private company and not a public company but the EAT said that this was not relevant to the question of whether or not the disclosures were in the public interest.

What does this mean for employers?

After the introduction of the ‘public interest’ requirement, many employers considered that they were likely to see fewer whistleblowing complaints arising from internal private matters relating to the individual employee such as an alleged breach of his/her contractual terms. The belief was that these types of complaints would not satisfy the ‘public interest’ requirement for whistleblowing complaints post-25 June 2013. However, early indications suggest that the Tribunals will take a narrow view of what is meant by ‘in the public interest’ so that if an employee complains about what is on the face of it an internal matter, it could still be deemed to be in the public interest if it affects other employees.

In the Chestertons case there were 100 other employees affected by the alleged manipulation of the figures. It remains to be seen whether the same decision would have been reached if the group of affected employees was much smaller. For example, what if there had only been 5 other managers affected? It is difficult to know where Tribunals will draw the line, but there will inevitably be more case law on this tricky issue.

In the meantime, employers would be well advised to review employee disclosures carefully. Where a disclosure only affects the individual making the complaint, it is unlikely to give rise to a valid whistleblowing complaint (though it is likely to need to be dealt with as a grievance). For example, an employee complaining of racial harassment which only affects him is unlikely to trigger protection under the whistleblowing legislation. However, if the disclosure relates to something which could affect a wider group of people, employers should consider whether the whistleblowing legislation applies. For example, an employee raising a concern that holiday pay has been calculated incorrectly, in breach of the employer’s legal obligations, could potentially have protection under the whistleblowing legislation.

Note that for the whistleblowing protection to apply, as well as being in the public interest, the disclosure itself must be a qualifying disclosure (e.g. alleging a breach of a legal obligation or a criminal offence, amongst others) and must also have been made to an appropriate person. There is no longer a requirement that the disclosure is made in good faith.

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