Whistleblowing – what does “in the public interest” mean?

Posted on: May 5th, 2015

A recent case looks at the question of when is it in the public interest for an employee to blow the whistle?

Regular readers of our monthly reviews may recall that a couple of years ago, the definition of whistleblowing was amended to include the requirement that the worker blowing the whistle must believe that his disclosure is “in the public interest”.

The intention behind this amendment was to crack down on the number of cases being brought where an employee relied on having raised a grievance as amounting to whistleblowing.  The argument that was made by employees was that, for example, by allowing a manager to bully them, the employer was in breach of its legal obligation to comply with the implied term of the employee’s contract that the employer would not act in a manner likely to seriously damage the relationship of trust and confidence.

It was a clever little argument, no doubt dreamt up by a clever little lawyer; however, of course, it wasn’t really the sort of whistleblowing the Government had in mind when in brought in the Public Interest Disclosure Act of 1998.

We now have the first case to deal with what is meant by the new “in the public interest requirement” with the recent case of Nurmohamed v Chesterton Global Ltd (Trading as Chestertons) (1) & Neal Verman (2).

The Facts

Mr Nurmohamed was employed by the well-known estate agents, Chestertons, and was responsible for the sales department of its Mayfair office.  The eagle-eyed amongst you may have spotted that Mr Nurmohamed brought his claim against both Chestertons and against a Neal Verman.  Mr Verman was Chestertons’ Director of Human Relations.  That’s got a number of you worried now, hasn’t it?!

Mr Nurmohamed reported into Ms Patricia Farley, who was the area director for the central London area.

In January 2013, Chestertons introduced a new commission structure.  Mr Nurmohamed was very unhappy about the change and concerned that it would considerably reduce his income; however, he largely accepted the change, albeit reluctantly.

On 14 August 2013 Mr Nurmohamed had a meeting with Ms Farley in which he presented her with a series of spreadsheets showing discrepancies in Chestertons’ profit and loss figures and he asserted that Chestertons’ senior management were manipulating the company’s accounts to benefit the shareholders.  On 24 September 2013 Mr Nurmohamed met with the HR Director, Mr Verman, and raised the same points with him.  On 8 October 2013 Mr Nurmohamed met again with Ms Farley and raised the issues a second time.

Unfortunately, the specific circumstances which led to Mr Nurmohamed issuing employment tribunal proceedings are not recorded in the Judgment, as Chestertons conceded that Mr Nurmohamed had been unfairly dismissed.  Nevertheless, we can of course deduce that Mr Nurmohamed was dismissed and that he considered he had been treated unfairly as a result of the disclosures he had made about Chestertons’ accounts.

The Employment Tribunal

The key issue to be determined by the Employment Tribunal was whether Mr Nurmohamed’s disclosures amounted to “protected disclosures” (the posh legal term for what the rest of us call whistleblowing).

This question was broken down into three elements:

  • Did Mr Nurmohamed make the disclosures as alleged.
  • Did the disclosures tend to show that there was (or was likely to be) a breach of a legal obligation; and
  • Did Mr Nurmohamed make the disclosures in the reasonable belief that they were in the public interest. This final element of course represents the new requirement.

In relation to the first element, the Employment Tribunal concluded that Mr Nurmohamed had made the disclosures.

In relation to the second element, Mr Nurmohamed’s argument was that he had made the disclosures because the inaccurate figures were being supplied to the “commission accountant” in order to calculate the commission payments for over 100 senior managers.  The Employment Tribunal concluded that the disclosures had therefore shown there was a breach (or likely to be a breach) of a legal obligation towards those managers.  It perhaps goes without saying that Mr Nurmohamed was of course one of those 100 senior managers affected.  Altruism will only get you so far in life.

In relation to the third, and for our purposes, most relevant element, that of whether the disclosures were made in the public interest, the Employment Tribunal found that “in the public interest” cannot mean “of interest to the entirety of the public”.  The Employment Tribunal gave an example of disclosures concerning hospital negligence, which would of course be in the public interest, despite only a section of the public being directly affected.

As a result, the Employment Tribunal concluded that “where a section of the public would be affected, rather than simply the individual concerned, this must be sufficient for a matter to be in the public interest.”

Applying that definition to the facts of the case, the Employment Tribunal decided that, although “the person Mr Nurmohamed was most concerned about was himself”, he did also have the other senior managers in mind and those managers, including Mr Nurmohamed, amounted to a section of the public.  In other words, Mr Nurmohamed satisfied the new “beefed-up-specially-designed-to-exclude-complaints-about-the-way-you’ve-been-treated-personally” test.

I should perhaps make it clear that those are my words, not those of the Employment Tribunal!

The Employment Appeal Tribunal

Inevitably, as this was the first case on a new piece of law, Chestertons appealed the decision.  And lost.

The EAT, after reviewing the minutes of the parliamentary debate concerning the introduction of the “in the public interest” requirement, decided that parliament had had the option of excluding from whistleblowing protection all complaints about breaches of an employee’s contract of employment, but had clearly decided not to adopt that approach.

The EAT concluded that “[t]he words, “in the public interest” were introduced to do no more than prevent a worker from relying upon a breach of his own contract of employment where the breach is of a personal nature and there are no wider public interest implications.”

The EAT also made it clear that this case should not be seen as introducing a rule that you need at least 100 affected individuals to amount to a section of the public, stating “a relatively small group may be sufficient”.

The EAT also reiterated that it is not relevant to look at whether the disclosure is, in fact, actually in the public’s interest, but instead the question is whether the worker reasonably believed it was.

What does this all mean for employers?

In short, whistleblowing claims in relation to an employee’s own contract are back on the table.

To put it in context, if I were to complain that I’m being bullied by my manager (I’m not, honest. They’re great! A wonderful manager! Why did I start this?!), that’s not in the public interest.  If I were to complain that they were bullying the entire team, that’s feasibly a small section of the public and so I have whistleblowing protection.

So, what do you need to do?  Employers should make sure that they have whistleblowing policies and procedures in place and any managers or HR advisers who have responsibility for hearing grievances should be alive to the question of whether there is a whistleblowing angle to the grievance.  Some refresher training would be a good idea as well.