We will be talking about the first Court of Appeal decision on what "in the public interest" means in deciding whether a person makes a disclosure that gives them whistle-blower protection.

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Jane Fielding: Hello, I am Jane Fielding, Partner in the Employment Team at Gowling WLG. In this podcast I am going to be discussing with my partner Martin Chitty an important whistleblowing case that's been recently decided by the Court of Appeal: Nurmohamed v Chesterton.

Why do you need to know about it? Well it is the first time the Court of Appeal has looked at what having a reasonable belief that what you are disclosing is in the public interest, what that means in a whistle-blowing context.

So perhaps surprisingly when the whistle-blowing legislation first came in in the late 90s there was no requirement that someone believed that what they were disclosing was actually in the public interest despite the name the Act - Public Interest Disclosure Act. Fairly early on though after the legislation came in, there was a decision in a case called Parkins v Sodexho that a disclosure about breach of an individual's own employment contract could form the basis of a protected disclosure. Now previously that would just have been treated as a grievance, and this led to a lot of debate about whether this finding meant that the protection of the whistle-blowing legislation had actually expanded too far, a sort of floodgates argument, and the fact that you do not need any particular length of service to claim whistle-blowing protection and damages if you succeed are uncapped that creates a dual incentive to claim whistle-blowing status which gave people concern, on the employers' side at least.

So nearly a decade later in 2013 this debate culminated in changing the definition of whistle-blowing and it is that change which this Chesterton case now explores and that change is the additional requirement that when you make a disclosure, you need to have a reasonable belief that doing so is in the public interest. Now like the original Sodexho case this case involved alleged breach of an employment contract and it essentially explores what turns an individual raising a grievance into a whistle-blower with the protection that that then brings.

So, Martin do you want to put some more flesh on the bones in terms of the facts and what the Court of Appeal decided.

Martin Chitty: This case actually came about from events not long after the legislation changed and Mr Nurmohamed was one of about 100 managers, quite senior employees within Chesterton Global, who had the benefit of a particular bonus scheme and he said on three occasions between August and October of 2013 that the company was in effect manipulating its own internal accounting which had two results: one was that he and others were not getting the level of bonus which they believed they were entitled to and secondly that it misrepresented the company's overall trading position.

So there we have, and this is important in terms of the later decisions, we have a large organisation where an individual's personal rights and the rights of others were being adversely affected, he says by manipulation by wrongdoing, and that a significant group of individuals were affected by this. So not just him although clearly he had an interest but also the other 99 or so people within that group who benefited under the scheme.

Now that of itself would have been simply a grievance issue but later in the day and he says because he raised these issues he was then fired, so he claimed that his dismissal was automatically unfair because he had raised these whistle-blowing complaints and as we know whistle-blowing complaints do not have a cap on the level of compensation that you can seek to recover, so he sued in the Tribunal and he won. The Tribunal looking at the then new legislation said yes, we accept that Mr Nurmohamed had a reasonable belief that the disclosures were made in the public interest as required by the Act.

Now perhaps not surprisingly given the unlimited nature of the potential award, Chesterton Global then appealed to the Employment Appeal Tribunal (EAT) and the EAT sided very strongly with the Tribunal and said yes, the Tribunal is entitled to reach that conclusion. Mr Nurmohamed had a reasonable belief that the disclosures were in the public interest, yes he had a personal motivation because he says he was being disadvantaged, but it was not personal just to him but to all of the other people who were in that and they accepted that there was evidence before the Tribunal that Mr Nurmohamed had the position of all of those others in mind at the time and the Tribunal had concluded rightly, said the EAT, that a sufficiently large number of people were impacted, adversely affected, to make this in the public interest, not of interest to the public, but in the public interest.

Jane: Yes and those are not necessarily the same thing are they, lots of things could be of interest to the public, lots of things appear in the tabloids everyday but being in the public interest means it is in the public interest more generally that the concern is raised and is able to be looked at and examined and if it is a genuine concern that something has gone wrong that that be addressed or at least the opportunity be given for it to be addressed.

Martin: Yes, and if somebody does do something and raises an issue which is in the public interest that they're protected, whether it is from some sort of detrimental treatment in the context of their employment, so they do not get a promotion or they always get the rubbish work assignments or shift patterns, or whether it is as extreme as Mr Nurmohamed claimed it was in this case that raising those issues resulted in him being fired.

Jane: Yes and so the Court of Appeal as we will now come on to look at decided in Mr Nurmohamed's favour as well. We were discussing earlier that it is interesting that this judgement is very clearly written, it is admirably short for an Appeal judgment which is always good for lawyers, but it does not give employees or employers any real certainty whether they will be in whistle-blowing territory or not.

The Court deliberately decided against creating what they refer to as a bright line test, so if you are on one side of it you are protected, if on the other you are not, and that is perhaps not surprising when we look at the arguments made by Chesterton and also Public Concern at Work which is the whistle-blowing charity which given the work they do in this area were invited to intervene with their views.

So Chesterton argued that an alleged breach of a personal interest does not become in the public interest just because it is shared by other employees. There has to be some interest of the public engaged outside the workplace so their QC gave the holiday pay situation for example, the fact that thousands of colleagues in one workplace may have been underpaid holiday pay is not enough to engage the public interest in and of itself. Their holiday pay remains a personal interest only. Contrast a situation where somebody disclosing information about the excessive working hours of hospital doctors where they themselves are a hospital doctor would be a protected disclosure and in the public interest, because although that working pattern will affect the doctor's personal interests, we all have an interest as the public in patient safety and that those excessive hours are not impacting on that. So Chesterton were arguing that it is the nature of the concern raised that is important not just the numbers involved.

Public Concern at Work on the other had took the opposite approach arguing that the only type of disclosure that is now excluded following this new amendment in 2013 was the purely individual grievance situation which has no wider ramifications for anybody, and that was the very case in Mr Parkins' situation in the original Parkins v Sodexho case. So the charity argued there should be a bright line to give certainty to individuals and employers as to when a grievance had tipped into whistle-blowing territory if you like. But, taking that argument to its logical extreme, the individual in question only needs to show one other employee affected to meet the public interest part of the test so both of those arguments were rejected as too binary.

Martin what we are really left with is a sort of broader test are we not, more akin to the sort of range of reasonable responses in unfair dismissal cases.

Martin: Yes, absolutely and it is that sort of analysis by the Court, that sort of conclusion which leads to massive uncertainty I think for employers and employees alike, and although in lots of ways that degree of flexibility is desirable, so that the outcome can fit the situation concerned, it actually makes life extremely difficult for everybody involved.

So the Court said, what they refer to as a multi-factoral test and the important thing to remember here is that no single factor is any more important or any more persuasive than any other and they have given four real sort of focus points for future Courts to look at in these cases and I will just talk a little bit about them.

The first one is the number of people in the group whose interests the disclosure which has been made actually served. So this is not solely, the Court says, so the sheer numbers involved do not, that is not decisive but the more people who are adversely affected by it the more likely it is going to be that it's in the public interest and this, in some respect, is fine but only to a point because if you said one person is saying I was adversely affected is unlikely to meet this test but one plus one, does that equal public interest or is it only if we go over a particular tipping point and the Court, very assiduously, has avoided making any sort of definitive statement about any of that, and what I have in mind here is that we have some sort of matrix of rights or issues and the further up both axis we go, the more likely it is that the disclosure will be in the public interest. So, if we start in the bottom left hand corner with only one person, or two people, adversely affected then it is pretty unlikely that it is going to be in the public interest, but let us have a look at some of these other issues.

The next one is the nature of the interests affected and the extent to which they are affected by the wrongdoing. So, does this mean that some rights of the individual in their relationship with their employer are more important than others? So if it is a fundamental issue like pay, is a failure to pay more serious in this context than the right to exercise let us say a policy in a particular way or to observe a certain practice in terms of how employees are to be treated, and I think that starts to become very divisive actually and for an employer dealing with a complaint by an individual trying to assess whether they have to treat them as a whistle-blower or simply somebody who is playing the grievance system is going to become increasingly complicated.

The third factor is the nature of the wrongdoing disclosed and what the Court said here was that there is a difference between looking at a situation where an employer has deliberately done something wrong, so there is deliberate wrongdoing, as against inadvertent wrongdoing albeit that each one affects the same number of people. Now I have to say I really struggle with this because that starts to point to motivation and conscious decision making on the part of the employer. Now if I deliberately fail to pay you, is that any more serious than me inadvertently failing to pay you. The fact is I have still failed to pay you, you may say well yes but Martin you consciously deciding to withhold wages I am legitimately entitled to is much more serious than you just being a bit forgetful, but there is an issue there about how the Court is going to react and that creates uncertainty.

And the last point and actually I think the biggest issue here, the one that will cause the most problems going forward is the identity of the alleged wrongdoer. Now why should it be that the identity of the employer in this situation makes a jot of difference? As an example, if it is the NHS failing to do something, is that any more serious than a small privately owned business in terms of the impact on the individual. Yes, one is high profile, employs millions of people, takes up billions of pounds worth of public money, but should it be held to a higher standard than a small private entity because the impact on the individual is going to be the same and that I think is, in terms of the matrix I was trying to describe that seems to be a huge multiplying factor. So from an individual point of view you disclose wrongdoing, a breach which absolutely meets the criteria on the other three heads but because you work for a small private organisation and they sack you for it, that somehow is not going to garner the protection the legislation ought to provide and that is where the arguments will be going forward.

Jane: Yes and it was clearly a factor was it not in the Court of Appeal's decision in favour of Mr Nurmohamed here that Chesterton were a very well known, albeit private sector organisation, they were a very high profile brand in their particular market and that was clearly an influencing factor.

So I have seen some commentary suggesting that the way to early on test which side of the line you sit as an employer is actually to quiz the individual when they first raise their concern about what they think the public interest is. Now I can see some real concerns to coin a phrase with that because from a policy perspective this is all about trying to find ways for people to raise issues without fear of retaliation and if you immediately start quizzing somebody about the nature of their concern simply to determine the level of protection they have, it could send to my mind completely the wrong message about whether your organisation is really trying to uphold this legislation if you like.

Martin: No I entirely agree I think that is a quite dangerous line for an employer to take. As soon as I raise something on the whistle-blowing hotline I am immediately quizzed as to my motivation for it; so Martin, why do you believe this is in the public interest? That is not going to encourage me to do that again is it? It is going to feel a bit like the Spanish Inquisition I suspect, and one of the things to bear in mind with the legislation is that the disclosure of a breach does not oblige the employer to do anything by way of reaction or to remedy the alleged problem and it does not matter whether that is that personal issues or whether it is one of the other criteria that amount to a protected disclosure, so I think that is quite dangerous territory for employers to drift into. The legislation itself provides a retrospective protection if, you as an individual, suffer a detriment at a later stage or you are fired at a later stage. So quizzing you as to your motivation at the time really does seem entirely at odds with that approach.

Jane: Agreed.

Okay, so the Court of Appeal have not given us the certainty of a bright line test and it is going to be a case of weighing up the factors in each case. In some cases it is going to be obvious whether the tests are satisfied but in more borderline cases our view is an employer is likely to be sensible to treat the individual as if they are a whistle-blower, but not concede that in case later down the line they want to argue that they do not meet the necessary tests.

If you have any questions about whistle-blowing or any other employment law issue do get in touch with me, Martin or your usual Gowling WLG contact, full contact details are on our website.

Thank you for listening and enjoy the rest of your day.