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15 October 2017

69: Court of Appeal clarifies meaning of public interest requirement in whistleblowing legislation

In Chesterton Global Ltd (t/a Chestertons) and another v Nurmohamed, the Court of Appeal considered whether an employee’s disclosure about accounting irregularities which affected his own commission payments could also be in the public interest because it concerned other employees in the same company.

In order to be protected under the whistleblowing legislation, a worker must make a disclosure of wrongdoing which they reasonably believe they are making ‘in the public interest’. The addition of this public interest requirement in 2013 was intended to stop workers from bringing whistleblowing claims based on grievances about their own contractual terms.

Mr Nurmohamed was employed as an estate agent by Chestertons until his dismissal in 2013. He alleged that his employment was terminated because he had made a protected disclosure when he informed the company that the management accounts deliberately overstated expenses in order to reduce the commission which he and around 100 other managers were paid by around £2-3 million. Mr Nurmohamed brought a number of claims in the Employment Tribunal, including a claim of automatic unfair dismissal for whistleblowing.

The Employment Tribunal and the Employment Appeal Tribunal upheld his claims, finding that his disclosure satisfied the public interest test. Although he had a personal motivation for making the allegation, he also had his colleagues in mind, and the large number of managers potentially affected was sufficient for the disclosure to be in the public interest.

Chestertons appealed to the Court of Appeal, arguing that a disclosure which concerned the personal interests of a group of employees within the same organisation was insufficient to amount to a public interest. However, the Court of Appeal rejected this argument, finding that Mr Nurmohamed’s disclosure was in the public interest because it affected so many employees; the extent of the financial misstatements was significant; and Chestertons is a substantial and prominent firm. Whilst noting that there can be no absolute rules for determining what is, and what is not, in the public interest, the Court identified four main factors to consider:

  • the numbers in the group affected by the disclosure;
  • the nature of the interest affected by the wrongdoing disclosed (for example, a serious health and safety risk is more likely to be in the public interest than a less important issue affecting the same number of people);
  • the form of the wrongdoing disclosed (for example, disclosure of a deliberate act or cover up would be more likely to be in the public interest than the disclosure of an inadvertent oversight); and
  • the identity of the alleged wrongdoer (the larger or more prominent an alleged wrongdoer, the more likely it will be that the public interest is engaged).

This decision clarifies that a disclosure relating to the personal interests of a fairly small number of workers within the same organisation may potentially satisfy the public interest requirement. However, the Court of Appeal reiterated that the broad intent behind the public interest requirement was to exclude private workplace disputes. Employers should note that workers need only have an objectively reasonable belief that a disclosure is in the public interest. It does not matter if this belief is found to be mistaken.

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