12 July 2017

The Public Interest Disclosure Act gives important protection to employees and other workers who raise concerns about wrongdoing they believe is taking place. Where the statutory conditions are met, these workers are protected from detrimental treatment and from dismissal.

The original 1998 legislation was amended in 2013 to emphasise what perhaps should have been obvious – that for a public interest disclosure, the alleged wrongdoing must be in the public interest.  Previous cases had suggested that where an individual complains of a breach of his own employment contract, which affects no-one else, that could be protected.  The legislation was changed to ensure that such claims could not now succeed – matters which affect private/personal interests rather than public interests are not protected.  

The current position is that the worker must have a genuine and reasonable belief that the wrongdoing is taking place, and that it is a matter in the public interest. He need not be acting in good faith (which was previously required) but where the disclosure is made in bad faith, that can affect compensation.

What, though, is meant by “public interest”? The Court of Appeal has just issued its decision in the case of Chesterton Global Ltd v Nurmohamed, upholding the earlier findings of the Employment Appeal Tribunal (“EAT”).

An employee had complained that the owners were artificially suppressing the profitability of the business, and manipulating the internal accounts by some millions of pounds. This had the effect of significantly reducing the bonuses paid to approximately 100 managers, including Mr Nurmohamed.

He was dismissed and brought claims against the company, and its HR Director, for automatically unfair dismissal and detrimental treatment, arguing that he made protected disclosures and these were the reasons for his mistreatment and dismissal. The tribunal had to consider whether the matter complained of by the employee (artificial manipulation of bonuses) was a matter “in the public interest”.

It was argued for the company that allegations can never be in the public interest if they do not affect anyone outside the particular place of work. The EAT had rejected that and said that while a disclosure cannot be protected if it affects only the person making the complaint, and there needs to be impact on a “section of the public”, in this case 100 managers could form a “section of the public”

The Court of Appeal agreed that an issue that affects only certain employees of a company could be a protected public interest disclosure (but will not necessarily be) – it depends on a full consideration of the case though. Matters to consider:

• The nature of the wrongdoing: was it deliberate?
• The nature of the interests affected: how serious a matter is it?
• The numbers of individuals affected: the more people affected, the more likely to be protected
• The identity of the wrongdoer: for a large well-known business, there may be more public interest in knowing about alleged wrongful practices

In this case the Court concluded that it had been legitimate to find that the disclosure made by the employee about deliberate wrongdoing of a large well known national estate agency, were matters in the public interest, so the protection of the legislation applied.

The Court did comment that tribunals should be slow to find that “internal” company matters are in the public interest, but it is entirely legitimate to reach that conclusion. As with so many aspects of employment law, it all depends on the particular facts, which makes it difficult for employers to have certainty in this complex area. Expert advice should be sought.

Contact: Douglas Strang Senior Associate dst@bto.co.uk T. 0141 221 8012