UK: Whistleblowing: Court Of Appeal Gives Guidance On The Public Interest Test

Last Updated: 15 September 2017
Article by Nick Elwell-Sutton and Ruth Bonino

For the first time the Court of Appeal has given guidance on the factors to take into account in order to assess whether a whistleblower's disclosure meets the "public interest" requirement. In this case, the Court decided that an employee had a reasonable belief that his disclosures about his employer's manipulation of profit and loss accounts were made in the public interest, despite his personal motivation in doing so.

Background

The Claimant Mr Nurmohamed had complained to his employer, Chesterton estate agents, that it was deliberately misstating its accounts, the effect of which was to lower his and some 100 or so other senior managers' commission earnings. Following that disclosure he was dismissed, which led him to bring a claim for automatically unfair dismissal under whistleblowing legislation.

Under current whistleblowing rules, a worker's disclosure is only protected if they reasonably believe it is made in the public interest. The question this case raised is whether a whistleblowing disclosure can be said to be in the public interest if it concerns only the personal complaint of that worker and affects only a small and limited section of the employer's workforce.

The Court of Appeal's decision

Rejecting the employer's appeal, the Court of Appeal found that the disclosure about the misstating of the accounts was in the public interest because, although personal to the Claimant, it said there were sufficient other factors which made it so. Specifically, the disclosure was of a deliberate wrongdoing and that it allegedly took the form of misstatements in the accounts to the tune of Ł2-3million. The Court observed that if the accounts had been statutory accounts, even of a private company, the disclosure of such a misstatement would unquestionably be in the public interest. The accounts were only internal accounts which made the position less black and white. Nevertheless, the Court observed that internal accounts fed into the statutory accounts and Chestertons was a very substantial and prominent business in the London property market.

The question of whether a disclosure is in the public interest depends on the character of the interest served by it rather than simply the number of people sharing it. Helpfully, the Court of Appeal set out in its judgment useful guidance of factors to be taken into account in determining the public interest element. Factors to consider include: the number of persons affected, whether the subject of the disclosure is important or trivial, whether the wrongdoing was deliberate or inadvertent and the identity of the 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 a disclosure about its activities engage the public interest.

Conclusions

Is an employee now protected when making a disclosure about his/her own contract?

This decision confirms that a disclosure that goes beyond a purely private matter may be in the public interest such that the worker making the disclosure will be entitled to protection from detriment or dismissal. It also gives some helpful guidance on the circumstances in which such a disclosure will attract protection.

By way of background, it's worth remembering that to gain protection from the whistleblowing rules when they were first introduced in 1998, there was no requirement for a disclosure to be made in the public interest. This meant that even disclosures about breaches of an individual's own contract of employment, which were personal to the individual, and not in the wider public interest, were capable of gaining the enhanced protection afforded by the whistleblowing legislation. Concerned that this was an unintended effect, Parliament amended the legislation on 25 June 2013, removing the requirement that they should be made in good faith and effectively replacing it with a new public interest test. Even so, there is still no requirement that the disclosure is actually in the public interest, so long as the whistleblower holds a reasonable belief that it is.

The Chestertons case is important as it represents the first true test of the success of the 2013 statutory amendments, and has given the courts an opportunity to give guidance on what "public interest" really means. The guidance given by the Court of Appeal is helpful (see above) but it has made it clear that the answer of what is "in the public interest" does not lend itself to absolute rules. Importantly, it did not rule out the possibility that the disclosure of breach of a worker's contract may nevertheless be in the public interest, but it cautioned employment tribunals about reaching such a conclusion, advising them to bear in mind the broad intent behind the 2013 statutory amendments that workers making disclosure in the context of private workplace disputes should not attract protection from the whistleblowing rules.

In practice though, we are now fairly close to a return to the pre-2013 position when the rules provided that workers could gain whistleblower protection by making disclosures which concerned their own contracts.

Summary of practical points

It does not matter if the employer is a private company – the public interest test may still be capable of being satisfied, even where the disclosure is found to be of interest to a group of employees in a private company.If the disclosure had been made by an employee of a public company, it would likely be much easier to satisfy.

Individuals may still make a disclosure about their own contract, provided they believe the disclosure also has wider public interest implications. Whether it is a protected disclosure will not depend necessarily on the numbers of other interested employees (in this case there were 100 senior managers) but the character of the interest served by making the disclosure.

Finally, it does not matter if the disclosure is ultimately not in the public interest – the test is whether the worker's belief that it was in the public interest, was objectively reasonable. This will depend on the circumstances, but it is likely that the threshold is higher for whistleblowers with specialist knowledge of the topic of their disclosure.

This decision establishes the new public interest test represents a low hurdle for workers to overcome in seeking to establish a protected disclosure.

Chesterton Global Ltd (T/a Chestertons) & another v Nurmohamed – 2017

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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