Chesterton Global Ltd (t/a Chestertons) and another v Nurmohamed and another [2017] EWCA Civ 979 is the first case to go before the Court of Appeal for a view on the 'public interest' test.

In order to be protected against detriment or dismissal a worker must have made a qualifying disclosure, which means any disclosure of information that, 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:

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

Chesterton Global Ltd (trading as Chestertons) is a well-known firm of estate agents. Mr Nurmohamed was a senior manager responsible for the sales department in the Mayfair office. Chestertons introduced a new commission structure in January 2013. Mr Nurmohamed was unhappy about the change and was concerned that it would reduce his income considerably.

Between August and October 2013, Mr Nurmohamed made disclosures on three occasions to the area director and the HR director regarding his concerns about manipulation of the company's accounts. He showed the area director a series of spreadsheets and records, which he believed showed discrepancies in the figures. Mr Nurmohamed was concerned that the inaccurate figures were being used to calculate commission and that the deliberate misstatement of between £2 million and £3 million of costs and liabilities reduced the profitability of the office and therefore affected the earnings of over 100 senior managers.

He complained that members of senior management were manipulating the accounts for the benefit of the shareholders and that this resulted in lower commission payments for himself and approximately 100 colleagues. His allegation was capable of being a protected disclosure, if he could establish he had a reasonable belief that it was in the public interest. Mr Nurmohamed was dismissed.

Employment tribunal decision

Mr Nurmohamed brought various claims in the employment tribunal (ET), including that he had been automatically unfairly dismissed for having made a protected disclosure. The ET found that his allegations amounted to protected disclosures relating to a breach of legal obligations within section 43B of the Employment Rights Act 1996. The ET considered whether Mr Nurmohamed reasonably believed that the disclosures were in the public interest. Chestertons argued that his disclosures were personal and not in the public interest. Mr Nurmohamed maintained his belief that at the time the disclosures were made, they were in the interests of 100 senior managers. The ET noted that there was no authority on this point.

The ET concluded that the disclosures were made in the reasonable belief of Mr Nurmohamed and that they were in the interests of 100 senior managers, which was a sufficient group of the public to amount to a matter in the public interest. The ET found that Mr Nurmohamed had been unfairly dismissed and automatically unfairly dismissed by Chestertons and that Chestertons and the HR director had subjected Mr Nurmohamed to detriments on the grounds that he had made protected disclosures.

Chestertons and the HR director appealed to the Employment Appeal Tribunal (EAT) on two grounds, first that the ET had erred in concluding that 100 senior managers was a sufficient group of the public to amount to a matter being in the public interest and secondly that the ET had failed to determine objectively whether or not the disclosures were of real public interest.

The question for consideration under section 43B(1) of the Employment Rights Act 1996 is not whether the disclosure itself was in the public interest but whether the worker making the disclosure had a reasonable belief that the disclosure was made in the public interest.

The EAT was satisfied that, as well as his own interests, Mr Nurmohamed had the other 100 senior managers in mind and therefore satisfied the public interest test. The EAT dismissed the appeal and Chestertons appealed to the Court of Appeal.

The Court of Appeal dismissed the appeal and upheld the ET's decision that Mr Nurmohamed's disclosure did satisfy the public interest test. The mere fact that something is in the worker's private interest does not prevent it also being in the public interest, depending on the specific facts of the case.

The Court of Appeal adopted four relevant factors proposed by James Laddie QC (Mr Nurmohamed's barrister) as a good starting point for consideration:

  1. The numbers in the group whose interests the disclosure served.
  2. The nature of the interests affected and the extent to which they are affected by the wrongdoing disclosed.
  3. The nature of the wrongdoing disclosed (disclosure of deliberate wrongdoing is more likely to be in the public interest that the disclosure of inadvertent wrongdoing).
  4. The identity of the alleged wrongdoer.

In this case, the disclosure related to alleged deliberate wrongdoing, which took the form of financial misstatements on a substantial scale. There were therefore other factors beside the number of employees affected that could render the disclosure in the public interest.

The Court of Appeal gave a wide interpretation to the public interest test in this case, which is good news for whistleblowers but not so good for employers.

The public interest test is an additional hurdle for whistleblowers to overcome but this case sets a fairly low threshold for workers. However, it leaves open the question of how large a section of the public has to be in order for a disclosure that affects them to be protected: eg would two people be enough? What is sufficient will be fact-sensitive so will depend on the facts in any particular case.

However, the Court of Appeal limited the impact of its decision by stating that, where the disclosure relates to a personal matter (such as breach of the employee's contract), ETs should approach the case with caution because Parliament's broad intent was to exclude private workplace disputes from whistleblowing protection unless other factors pointing to a public interest were present.