What counts as whistleblowing by employees? Why the ‘public interest’ could be much wider than employers realise

In a nutshell

What is it all about? Employers will be familiar with the whistleblowing legislation, introduced in 1998 to prevent individuals suffering detriment or dismissal if they made a “protected disclosure” about wrongdoing by their employer. A new test was introduced in 2013, meaning that in order to qualify as a “protected disclosure”, the worker must have a reasonable belief that the disclosure is made in the “public interest”.  The recent decision of the Employment Appeal Tribunal (“EAT”) of Underwood v Wincanton plc is only the second case to consider what is in the “public interest”.
What do you need to know? That what is in the “public interest” is a lot wider than may initially be thought. The ‘public interest’ test could potentially be met even though the alleged disclosure of wrongdoing affected only a small group of employees and relates to a contractual matter. This case gives guidance as to what can qualify as a whistleblowing disclosure under the revised law. Employers must be careful to treat any potentially disclosure in the correct manner and take care not to subject the whistleblower to any detriment or dismissal.   
Why should you care? Employers should take whistleblowing disclosures seriously, both from a regulatory perspective and from a risk management perspective. Unfair dismissal claims based on whistleblowing need no qualifying length of service and are not subject to a cap on the compensatory award. 
Get in touch: If you would like to speak to someone about the issues raised, please contact Scott Milligan or find out more on our Employment Law page.

Whistleblowing Whistleblowers

In detail

A recent appeal decision by the EAT is likely to be of importance for employers and employees alike in terms of the protection offered for protected disclosures, or ‘whistle blowing’ cases. In particular, the decision to allow the appeal in Underwood v Wincanton plc looks to have widened the scope of protection which is available. An important aspect of the case was that it showed that contractual matters can satisfy the ‘public interest’ test for protection, as will be discussed.

The decision may have a significant effect for both employees and their employers. For employees, it may offer an extra avenue to raise claims following dismissal under the protection offered within the legislation. For employers, the worry may be that many more unfair dismissal claims are raised as whistle blowing claims. The main concern in this context is the potential for uncapped damages in those cases. This may also be an incentive for those bringing claims to see if their claim can fit within the protection offered by whistle blowing. 

The Law

Protection for ‘whistle blowing’ is afforded in law under the Employment Rights Act 1996, Section 43. Section 43B specifically sets out what amount to “qualifying disclosures” to be afforded protection. A “qualifying disclosure” will be one where the worker making the disclosure has a reasonable belief that one or more of a list of issues is shown (such as criminal activities) and they have a reasonable belief that the disclosure is made in the public interest. There have only been a few cases since this amendment as to how far the ‘public interest’ test limits the types of disclosures that are protected. Therefore, the decision in the present case may have a significant impact on the interpretation of this test moving forward. 

Underwood v Wincanton Plc

The original case on behalf of the employees to this action for automatic unfair dismissal as a result of whistleblowing was struck out as having no reasonable prospects of success. This was because the Employment Judge held that there was no “public interest” to the claim.

In brief, the facts of the case were that some employees made a disclosure to their employer, complaining of unfair allocation of overtime between drivers at the same depot. It was suggested in their letter that drivers who were more thorough in their vehicle safety checks were being overlooked for overtime, thus losing earnings. 

In making the appeal it was argued that the Employment Judge had adopted too narrow a view of the meaning of ‘public interest’.

Importantly, the case of Chesterton Global Ltd (t/a Chestertons) v Nurmohamed had been decided in the time since the tribunal’s judgment. This case offered authority that the ‘public interest’ test could be met even though the alleged disclosure of wrongdoing affected only a small group of employees, in this case being a group of employees who raised concerns about miscalculation of commission payments due to them. 

This case was considered and agreed with by the EAT, who overturned the tribunal’s decision, with a focus placed on the possibility of the ‘public interest’ test including a subset of the public, which may be a small group of employees. Moreover, it was already established that contractual matters could constitute matters in the public interest. Therefore, the appeal allowed the case to proceed to a full tribunal, which has not yet been heard.  

Importance Moving Forward 

The judge in Underwood had several reasons for taking the approach which was taken. A significant influence on their decision to allow the appeal appears to have been the fact that an intervening decision, Chesterton, was decided which gave weight to the arguments in Underwood concerning the ‘public interest’ test. 

The full impact of this case remains to be seen. That being said, it is clear that the decision has widened the extent of what is covered by ‘public interest’ within Section 43B. In particular, it is authority to the point that employees can be protected when they raise a contractual matter that affects a small group of employees. Those employees can be considered as a sub-set of the ‘public’ if they are employed by the same employer and have an interest in the same matter. This case has held that persons in those circumstances can have a reasonable belief that their disclosure was in the public interest. 

Therefore, it appears that additional cases may now be brought under the protection offered by Section 43B which previously many may have considered to have been restricted by the ‘public interest’ test introduction by the 2013 Regulations. For employers this may raise concerns over dismissal claims being brought through the protected disclosure route due to the potential for uncapped damages. Time will tell the full implications of this judgement, and it remains possible that a future case may restrict the interpretation of the ‘public interest’ test.

Get in touch

If you would like advice on any aspect of the issues raised, how these potential changes might affect you, or how the current system operates, please contact a member of our employment team or find out more on our employment law page.