Whistleblowing – is it in the public interest?

Claims of detriment and dismissal for making a ‘protected disclosure’ (sections 47B and 103A of the Employment Rights Act 1996 (ERA)) otherwise known as “whistleblowing” will only be protected if they are ‘qualifying disclosures’ meaning a disclosure of information which, in the reasonable belief of the worker making the disclosure, is made in the ‘public interest’ and tends to show one or more of the following (section 43B of the ERA):

• that a criminal offence has been committed, is being committed or is likely to be committed;
• that a person has failed, is failing or is likely to fail to comply with any legal obligation to which he is subject;
• that a miscarriage of justice has occurred, is occurring or is likely to occur;
• that the health or safety of any individual has been, is being or is likely to be endangered,
• that the environment has been, is being or is likely to be damaged; or
• that information tending to show any matter falling within any one of the preceding paragraphs has been, is being or is likely to be deliberately concealed.

The Court of Appeal in Chesterton Global Ltd & another v Nurmohamed & another [2017] EWCA Civ 979 has clarified the position on whether the disclosure of information which is in the private interest of the worker making it can be in the public interest because it serves the (private) interests of other workers as well.

The background to this case is that in 2011 a new group of investors acquired a shareholding in Chesterton. Their involvement prompted a review of the system for payment of commission to the sales staff. Mr Nurmohamed believed that the new system would have a serious adverse impact on his earnings. He objected, but in February 2013 he agreed to the new system subject to some modifications. At a meeting on 14 August 2013 with Ms Farley, the director responsible for the London area, Mr Nurmohamed referred to a number of what he said were discrepancies in the monthly accounts which appeared to show that the profitability of the Mayfair office (where he worked) was being artificially suppressed so as to reduce the level of commission payable. He described this to Ms Farley as “manipulating the accounts to the benefit of the shareholders” and that this “affected over 100 senior managers earnings” and he believed Chersterton was deliberately “misstating between £2 and £3 million of actual costs and liabilities” throughout the entire office and department network.

On 17 October 2013, Mr Nurmohamed was dismissed and he claimed that the dismissal was automatically unfair for making protected disclosures and he further claimed to have suffered various detriments, besides his dismissal, because he had made the same disclosures.

An employment tribunal held that the disclosures were made in the belief of Mr Nurmohamed at the time that it was in the interest of the 100 senior managers. The tribunal concluded that this was a sufficient group of the public to amount to being a matter in the public interest and that belief was reasonable. The over inflation of the costs set against the office budgets would have decreased their profits and potentially reduced bonuses for all the senior managers. Although the tribunal were cognisant that the person Mr Nurmohamed was most concerned about was himself and that the amendments to the public interest legislation mean that there must be a public interest question and not a personal one, it was satisfied that Mr Nurmohamed did have the other office managers in mind. He referred to the central London area for which Ms Farley was responsible and suggested to Ms Farley that she should be looking at other central London office accounts. Therefore the tribunal concluded that the protected disclosures were in the public interest.

Chesterton appealed the decision and the Employment Appeal Tribunal rejected it.

Chesterton appealed the decision again and the Court of Appeal also rejected it. In the Court of Appeal’s view (adopting the grounds advanced by Mr Nurmohamed barrister) that in determining whether a disclosure of information is in the public interest, a tribunal should consider:

the numbers in the group whose interests the disclosure served;

• 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;
• 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;
• 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 – though this should not be taken too far.

Lord Justice Underhill (who gave the leading judgment of the Court of Appeal concluded that the statutory criterion of what is “in the public interest” does not lend itself to absolute rules, still less when the decisive question is not what is in fact in the public interest but what could reasonably be believed to be. He went to say that he was not prepared to rule out the possibility that the disclosure of a breach of a worker’s contract of employment may be in the public interest, or reasonably be so regarded, if a sufficiently large number of other employees share the same interest. However, he would certainly expect tribunals to be cautious about reaching such a conclusion. In practice, however, the question may not often arise in that stark form. The larger the number of persons whose interests are engaged by a breach of the contract of employment, the more likely it is that there will be other features of the situation which will engage the public interest.