Court of Appeal gives its decision on the meaning of "in the public interest"

Posted by Paula Kathrens on
In Chesterton Global Limited v Nurmohamed the Court of Appeal considered the relevant factors to take into account in assessing whether or not a worker had a reasonable belief that disclosure was in the public interest. It upheld the Employment Appeal Tribunal's decision and dismissed the employer's appeal.   

Background  

It was back in 2013 that the words "in the public interest" were added to the definition of what constituted a "qualifying disclosure". As a result, the individual making the disclosure had to have a reasonable belief that disclosure was in the public interest. The purpose of the change was to correct an anomaly in the Public Interest Disclosure Act 1998 that did not refer to the public interest test and to reverse the effect of the decision in Parkins v Sodexho Limited regarding the definition of "qualifying disclosure". In Parkins, the EAT held that the definition of "qualifying disclosure" was wide enough to include a disclosure regarding the whistleblower's own contract of employment which went beyond what was originally intended by the government when introducing the whistleblowing legislation.

Mr Nurmohamed was a senior manager working for a large estate agent firm, Chesterton Global. He commenced his employment in January 2008 and was dismissed in October 2013. A new commission system was introduced in early 2013 and Mr Nurmohamed believed that the new system would have a serious adverse impact on his earnings. Against that background, he monitored the internal accounts over the following months. In August 2013, at a meeting with the London director, he demonstrated a number of discrepancies in the monthly accounts which appeared to show that the profitability of the Mayfair office, where he worked, was being artificially suppressed which reduced the level of commission payable. In the following months, Mr Nurmohamed made similar allegations regarding the manipulation of the company's accounts which he believed was resulting in lower profit-based commission for around 100 senior employees including himself. He was dismissed and claimed that his dismissal was due to making a protected disclosure and the dismissal was automatically unfair. 

Employment Tribunal and EAT proceedings

The Employment Tribunal held that the dismissal was automatically unfair due to the fact that it related to the disclosures Mr Nurmohamed had made and he had suffered a detriment as a result of these disclosures. Although Mr Nurmohamed had personal motivation because of the impact on the commission arrangements, the Employment Tribunal concluded that it was his reasonable belief that the disclosures were in the interest of the 100 senior managers, and this constituted a sufficient group of the public for the matter to be disclosed in the "public interest".

Chesterton appealed on the basis that 100 people was not a sufficient section of the public and that the Employment Tribunal had failed to assess whether the disclosures were of real public interest. The appeal was dismissed. The EAT held that there was no need for the Employment Tribunal to decide whether the disclosure was in the public interest. Rather, the issue was whether the worker believed that the disclosure was in the public interest and whether this belief was objectively reasonable.

Chesterton appealed to the Court of Appeal.

Court of Appeal decision

The Court of Appeal dismissed the appeal. It considered Babula v Waltham Forest College stating that a worker's belief that their disclosure was made in the public interest has a subjective and objective element. Even though it may be wrong, the belief may still be reasonable.  

The focus of the Court of Appeal turned to the meaning of "in the public interest".

The particular issue was whether a disclosure which is in the private interest of the worker making it becomes in the public interest simply because it serves the private interests of other workers as well.

Chesterton argued that mere multiplicity of workers sharing the same interest is not enough. In order for a disclosure to be in the public interest, the interests served have to extend outside the workplace.

Interestingly, the whistleblowing charity Public Concern at Work (PCW) were also involved in the Court of Appeal case as an "intervener". PCW argued that any disclosure should be treated as being in the public interest if it is in the interests of anyone else besides the worker making the disclosure.  

Mr Nurmohamed took a position between those two. The mere fact that the disclosure was in the interest of other workers beside the worker making it was not sufficient to make it a qualifying disclosure but he did not accept that numbers were irrelevant or that disclosures always had to be in the interests of people outside the workplace. He argued that in deciding whether a disclosure is in the public interest the Employment Tribunal should consider all the circumstances but certain factors would be relevant: 

  • The numbers in the group whose interests the disclosure served.
  • The nature of the interests affected and the extent to which they are affected by the wrongdoing disclosed - a disclosure of wrongdoing directly affecting a very important interest is more likely to be in the public interest than a disclosure of trivial wrongdoing affecting the same number of people, and all the more so if the effect is marginal or indirect.
  • The nature of the wrongdoing disclosed - disclosure of deliberate wrongdoing is more likely to be in the public interest than the disclosure of inadvertent wrongdoing affecting the same number of people.
  • The identity of the alleged 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 should a disclosure about its activities engage the public interest".

Adopting this approach, Mr Nurmohamed argued that the Employment Tribunal was right to reach the conclusions that it did.   

The Court of Appeal agreed and dismissed Chesterton's appeal. Its decision on "public interest" fell somewhere between the arguments of PCW and Chesterton.  

A disclosure about a personal matter or relating to a breach of the individual's contract of employment could, depending on the features of the case, make it reasonable to regard disclosure as being in the public interest as well as in the personal interest of the worker. The Employment Tribunal would need to consider all the circumstances of a particular case and the Court of Appeal stated that the four factors cited by Mr Nurmohamed "may be a useful tool" in considering the reasonableness of the worker's belief that disclosure was in the public interest.   

In this case, apart from the numbers of individuals involved, there were other relevant features which could make disclosure in the public interest. As the Court of Appeal said, the disclosure was said to be deliberate wrongdoing, the alleged wrongdoing took the form of mis-statements in the accounts in the region of £2 - £3 million and this was a very substantial and prominent business in the London property market.

Comment

As the Court of Appeal stated, Parliament chose not to define the phrase "in the public interest" and the intention "must have been to leave it to Employment Tribunals to apply it as a matter of educated impression". The guidance given by the Court of Appeal about the factors to take into account in assessing the reasonableness of the worker's belief that disclosure was in the public interest could be very helpful in future disputes. In dismissing Chesterton's argument that for a disclosure to be in the public interest, the interests served have to extend outside the employer's workplace the Court of Appeal ensured that a very restrictive interpretation of "public interest" was avoided.   

PCW said that the decision is good news for whistleblowers. "It is obviously desirable that the law protects workers who responsibly raise wrongdoing, rather than trips them up with the technicalities or leaves them exposed to retaliation or uncertainty as to whether they are protected". 

About the Author

Paula is a Partner in our Employment law team advising organisations in both the public and private sectors on all aspects of contentious and non-contentious employment law.

Paula Kathrens
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