Legal Update: Whistleblowing - the public interest test

11 May 2015

We recently had a new test introduced into the whistleblowing legislation (by Section 17 of the Enterprise and Regulatory Reform Act 2013) to reverse the principle in a case called Sodexho. This was the case that established that an employee was able to blow the whistle with respect to a breach of his own employment contract. 

The new test means that in order to bring a claim, an employee must show their disclosure was made “in the public interest”.  However, there has been considerable uncertainty as to what this test actually means.  Now we have had the first appeal decision to pronounce on these words. The case was brought by a senior manager (Mr Nurmohamed) at the Mayfair branch of the Estate Agents, Chestertons.  He had made various disclosures with regard to changes in the way their accounts were computed, and he claimed these changes had the effect of reducing, not only his own commission income, but also that of approximately 100 other senior managers.  As a result, Chestertons claimed that the disclosures were about personal or private matters, and did not pass the “public interest” test, such that the Claimant was unable to bring a whistleblowing claim. 

Mr Justice Supperstone sitting in the EAT disagreed.  First of all, he made the point that the worker making the disclosure had to have a “reason or belief” that the disclosure was made in the public interest. For this purpose it would not matter if ultimately the worker was wrong about that and/or there was, in fact, no public interest in the disclosure. What was important, was whether the worker’s belief that the disclosure was in the public interest, was objectively reasonable.

Secondly, the EAT looked carefully at the debate in Parliament at the time the Bill was being discussed.  This was particularly interesting given that the sponsoring minister was Normal Lamb MP, then Employment Minister of State, and himself a former employment lawyer.  The Minister made plain that the purpose of the legislation was specifically to prevent, what he termed “opportunistic use of breaches of an individual's contract that are of a personal nature”.  So what Parliament was seeking to do was to reverse Sodexho.  It was not looking to bring in any wider form of public interest test.  So in that sense, the definition of “public interest” has a specific meaning in employment matters, and is not comparable to that which applies in other areas of the law, such as in defamation cases.  It was enough in this case that the bonuses of 100 employees were potentially affected.  True, and unsurprisingly, Mr Nurmohamed was most concerned about his own position, but he also bore in mind the position of his other senior manager colleagues.  In that sense, a section of the public was affected.

It therefore does seem that this new “public interest” test is going to serve a limited purpose.  Sure, it will reverse the rule in Sodexho, and this was a rule which has caused considerable concern amongst employers. They felt this distorted what was intended by the whistleblowing provisions of the Employment Rights Act which had been introduced by what was termed the “Public Interest (Disclosure) Act 1998” (my emphasis).  However, it does now seem the newly imported (and narrow) test, will not even serve to block claimants who specifically do have in mind their own position, where that position may also have ramifications for a group of others, however limited that group might be. 

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