(1) Chesterton Global Ltd (2) Verman v Nurmohamed UKEAT/0335/14/DM

Why care?

A worker (a wider category than simply an employee) is entitled to be protected against detriment or dismissal if he or she has made a qualifying protected disclosure (in other words, is a whistleblower). Although protection for whistleblowers was added to the Employment Rights Act 1996 by the Public Interest Disclosure Act 1998, until June 2013 there was no requirement that a disclosure be in the public interest. In Parkins v Sodexho Ltd [2002] IRLR 109, the EAT held that a qualifying protected disclosure could include a breach of the whistleblower's own contract of employment. Section 17 of the Enterprise and Employment Reform Act 2013, which came into effect on 25 June that year, introduced a new requirement that any disclosure protected by the law must, in the reasonable belief of the worker making it, be made in the public interest. However, without any further guidance, it was unclear what the effect of this would be in practice.

The case

The Claimant was employed as a senior manager at the Mayfair office of the Respondent, a chain of estate agents. Changes were made to the Respondent's commission structure.  Between August and October 2013 he complained about manipulation of the Respondent's accounts to the HR director on three occasions. He claimed that the Respondent was deliberately supplying inaccurate profit and loss figures to its accountant, meaning that he and other senior managers were receiving lower commission payments than that to which they were actually entitled, and benefiting the shareholders.

He was dismissed and brought claims which included that he had been dismissed for being a whistleblower. The Tribunal agreed that he had been automatically unfairly dismissed, and that he had been subjected to detriments on the ground that he had made protected disclosures. 

Since June 2013, any protected disclosure must have been made "in the public interest".  The Tribunal remarked that only a section of the public would be affected by any disclosure, and therefore it was not necessary that the disclosure be of interest to the entirety of the public. The Tribunal held that the Claimant reasonably believed that the other 100 senior managers had an interest in his disclosure and that this was sufficient to get over this hurdle, even though the Claimant's principal motivation was his own income.

The Respondent appealed to the Employment Appeals Tribunal, arguing that 100 of its own senior managers did not constitute a sufficient section of the public for the matter to be in the public interest, and that the Tribunal had failed to determine objectively whether the disclosures were or were not of real public interest.

The EAT (Supperstone J) dismissed the appeal. The correct test under s43B(1) of the Employment Rights Act 1996 is whether the worker making the disclosure has a reasonable belief that the disclosure is made in the public interest, as the Tribunal had asked itself.  The public interest test is satisfied even if the disclosure is wrong, or there was no actual public interest, provided the worker's belief was objectively reasonable (Babula v Waltham Forest College [2007] EWCA Civ 174).  There was no requirement to determine objectively whether or not the disclosures were actually of public interest.

In this case, the protected disclosures concerned accounts which could affect the remuneration of 100 other senior managers as well as the Claimant himself.  It was clear that the purpose of the amendments to s43B(1) ERA had been to reverse the effect of Parkins v Sodexho Ltd [2002] IRLR 109, and to prevent a worker from relying upon a breach of his or her own employment contract without wider public interest implications. The Tribunal was satisfied that the Claimant had the position of others as well as himself in mind and that he genuinely believed the Respondent's accounts were inaccurate.  Accordingly, it was permissible for the Tribunal to conclude as it did that the public interest test was satisfied.

What to take away?

This is an interesting case as is the first case on the meaning of "public interest" in employment law since June 2013. The EAT's judgment suggests that, contrary to what was written at the time the law changed, the new test will not provide a substantial barrier for whistleblowers. The EAT has also indicated that employment tribunals do not need to consider definitions of "public interest" which may arise in other areas of law. Before July 2013, whistleblowing law included a requirement that any protected disclosure be made in good faith. This was removed (although the question of good faith is still relevant to compensation awarded).

The Respondent was a private limited company but this had no relevance to the public interest test, said the EAT.