Chesterton Court of Appeal case examines new ‘public interest test’ for first time

26th June 2017

By PCaW Chief Executive Cathy James

The UK and Europe looked on eagerly as the Court of Appeal were for the first time asked to consider the new ‘public interest’ element of our whistleblowing law, the Public Interest Disclosure Act (PIDA). Public Concern at Work intervened in Chesterton Global Ltd vs Nurmohamed held at the Royal Courts of Justice on 8 June 2017.

It may seem odd, but when PIDA was first put on the statute books in 1998, while it was expressly described as a law to protect individuals who make disclosures of public interest information, it did not contain an express public interest test. Instead it contains six categories of information broadly relating to wrongdoing, risk and malpractice, which combined seek to define the public interest. By far the broadest, and as demonstrated by this appeal, the most controversial of the categories is wrongdoing which shows a ‘breach of a legal obligation’.

In June 2013, the whistleblowing law was changed to close a legal loophole whereby individuals were able to claim protection under PIDA for raising a concern about a breach of their own personal employment contract by claiming it was indeed a ‘breach of a legal obligation’. This was in a bid to overturn the ruling in Parkins v Sodexho which, it was said, had watered down the public interest purposes of the legislation. The new test requires any worker claiming protection under the Act to prove that they reasonably believed, both subjectively and objectively, that they were making a disclosure in the public interest. Parliament chose not to provide a statutory definition of the ‘public interest’ and instead left this to the Employment Tribunal and Appeal Courts to assess. This is the first case to reach the Court of Appeal in which the vexed issue of how to interpret the new test is considered.

Mr Nurmohamed was a senior manager working for Chesterton Global, a large firm of estate agents. He raised concerns that the company’s accounts were being deliberately manipulated by senior management to justify decisions around pay, to his detriment as well as to the detriment of more than 100 other office managers. Mr Nurmohamed was dismissed by Chesterton and brought a claim for unfair dismissal for having made a protected disclosure.

In the Employment Tribunal (ET) at first instance, while the tribunal agreed that Mr Nurmohamed had overcome many of the hurdles under PIDA; (namely that he had made disclosures in the reasonable belief that the information tended to show a breach of a legal obligation and that he had been subjected to detriment and unfair dismissal because of them), the main question to be determined was whether he had satisfied the new public interest test. The tribunal found in Mr Nurmohamed’s favour on the basis that his belief that the change to the company’s internal accounting procedures which negatively affected both his financial position but also that of the 100 other office managers, was sufficient to satisfy the public interest test. Chesterton appealed the ET’s decision.

In the Employment Appeal Tribunal (EAT), while they were “cognisant that the person that Mr Nurmohamed was most concerned about was himself”, it was clear from his disclosure that he did have the interests of other office managers in mind. Accordingly, the EAT found that the disclosures were made in the public interest. Chesterton then approached the Court of Appeal.

Given the importance of this case in terms of the interpretation of such a fundamental aspect of PIDA, PCaW chose to intervene to bring a wider perspective to the Court of Appeal’s deliberations and a perspective that considers the daily realities of workplace whistleblowing, drawn from the experience of thousands of individuals who contact the charity’s advice line every year. Our submissions considered how individuals raise whistleblowing issues, and the dilemmas and risks facing a typical whistleblower. Callers to the advice line come from all walks of life, including teachers, nurses, social workers, accountants, factory workers and care workers, and from all economic sectors in the UK. We submitted that the court should maintain the broad nature of the protection provided by PIDA and a flexible approach to the interpretation of the new public interest test particularly since

a. it is desirable that the law protects people who responsibly raise wrongdoing, unacceptable risk or malpractice, rather than trips them up with technicalities;

b. those who consider whether they have legal protection, and those who advise them, need clarity as to where they stand;

c. workers do not always know the law and generally do not have legal advice, so an overly technical approach is undesirable; and,

d. workers are often encouraged to come forward by non-technical policies and should not then be disadvantaged for following them.

The Court of Appeal heard submissions from the parties along the following lines:

Chesterton’s submissions
Chesterton argued that the EAT had erred in law by considering the public interest test in terms of the number of people that were affected by the concern. They said that it was immaterial that the matter affected over 100 people. As the matter was in the private interest of the affected parties it was not in the public interest, nor would it ever be simply because a larger number of workers were affected. The question of whether the disclosure meets the public interest test depends on how the wrongdoing affected other people and it was suggested that some categories of wrongdoing (e.g. health and safety or damage to the environment) would be more likely to meet the test than a breach of a legal obligation. A disclosure is more likely to meet the test should it relate to wrongdoing which has impact ‘beyond the workplace’.

Mr Nurmohamed’s submissions
A protected disclosure is in the public interest if it affects persons (including a person) other than the person making the disclosure, so long as it has ‘some level of importance’, and therefore is not merely frivolous. In deciding this the Courts should consider a variety of factors including the impact of the wrongdoing and the number of people affected. Adopting the strict approach proposed by Chestertons could put workers off making disclosures and could result in many perverse decisions by the courts - for instance, an individual raising concerns about a breach of a term in their employment contract to provide safe working equipment to all staff would not be protected because the disclosure would not involve matters beyond the workplace.

PCaW’s submissions
The disclosure can be in the public interest if the wrongdoing affects more than just the individual making the disclosure. The law should provide the simplest framework for protecting the raising of concerns, as the typical whistleblower acts promptly and not with the particular requirements of PIDA in mind. The law is drafted in such a way that individuals can still be protected if they reasonably believe something is in the public interest when it is not, and therefore should be interpreted as broadly as possible to achieve its overall public interest aims.

The Court of Appeal have reserved judgment in this case for later in the year. Time will tell whether this judgment will provide the clarity and certainty that is required for the definition of the public interest to be easily understood by workers and their advisers, or whether an already difficult area of law will be further complicated.