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EAT clarifies the “public interest test” for whistleblowing claims

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A disclosure does not need to be in the interest of the public at large in order to satisfy the “public interest test” as set out in whistleblowing legislation, and can concern only a small group of people.

The Claimant, Mr Nurmohamed, was employed by Chestertons as a senior manager. He made disclosures regarding manipulation of the company’s accounts, which were modified in order to overstate costs and liabilities resulting in lower commission payments for around 100 employees (including himself). Mr Nurmohamed was subsequently dismissed and brought a claim for unfair dismissal against Chestertons.

It was submitted by Chestertons that, as the disclosure only concerned a class of its employees, it did not satisfy the ‘public interest’ requirement. The EAT considered the meaning of ‘in the public interest’ and held that a disclosure is not required to be of interest to the public at large. As such, although Mr Nurmohamed’s disclosure was only of interest to a small group of persons, i.e. the 100 senior managers affected by lowered commission payments, it still qualified as a protected disclosure for the purposes of whistleblowing legislation.

The EAT took a broad view of the ‘public interest’ test, thus setting out a lower threshold for who a whistleblower is than many had anticipated. It should be noted that the EAT reached this conclusion despite the fact that Mr Nurmohamed’s principal concern was for his own income, rather than that of other affected employees.

Chesterton Global Ltd and another v Nurmohamed UKEAT/0335/14

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Employee’s admission to misconduct meant limited subsequent investigation required

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Where an employee admits to misconduct, it may be reasonable for an employer to limit its investigation into the situation.

Mr Wiltshire was employed by CRO Ports London as a Heavy Lift supervisor. In January 2013, Mr Wiltshire gave permission for a driver to lift a container, despite a known problem with the locking of the container to the crane. The container fell to the ground from a height of 20 feet; this could have been fatal. Mr Wiltshire was subsequently suspended. In light of his unblemished record with the company and long service, he thought he would simply be reprimanded. As such, Mr Wiltshire took full responsibility for the incident, and admitted it had been a dangerous practice. He was dismissed for gross misconduct, and brought a claim for unfair and wrongful dismissal.

The EAT found that the employer was entitled to curtail the scope of the investigations based on Mr Wiltshire’s admissions and that must be taken into account in looking at the reasonableness of the investigation as a whole.

This decision is useful to employers, in that it gives some guidance as to how to manage an employee’s admission in respect of misconduct, and the subsequent investigation. It should be noted that, depending on the nature of the admission, a full investigation may still be required, so it is best to approach this on a case-by-case basis.

CRO Ports London Ltd v Wiltshire UKEAT/0344/14, 23 January 2015

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Court jails litigants for contempt of court

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Custodial sentences of 12 months and 20 months have been passed down in respect of two parties who were found to be in contempt of court.

One party to the case deliberately disposed of assets, and failed to disclose other assets, despite having been notified of a freezing order. The High Court took this to be a serious breach, which justified imprisonment of 12 months – although this was suspended to provide the individual a chance to repay the sum owed, which was in excess of USD 3 million.

Another party had signed a statement of truth for a defence, as well as a disclosure statement. The court found that she could not have believed the defence to be truthful, and that the disclosure statement had been misleading. The court concluded that 20 months imprisonment was justified in this case.

This case illustrates the seriousness of deliberate breaches of Court orders, and makes clear that a court will not shy away from a sentence of imprisonment in either of those occurrences. Parties should ensure they comply with any court orders.

Otrikitie International Investment Management Ltd and others v Gersamia and another [2015] EWHC 821 (Comm) (25 March 2015)

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Costs award was justifiable despite party’s inability to pay

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Tribunals are able to make costs awards against parties who are unable to pay at that time, so long as the tribunal considers that the party will be able to pay at some point in the future.

Mrs Chadburn brought an unfair dismissal claim and several race discrimination claims against her employer, an NHS Trust. The tribunal held that, whilst Mrs Chadburn’s unfair dismissal claim was tenable, she had fabricated the race discrimination allegations. The tribunal found this to be unreasonable conduct and, accordingly, made a costs award of £10,000. Evidence was presented to the tribunal to the effect that Mrs Chadburn could not afford to pay as a result of debts of £600. Nonetheless, the tribunal found that as Mrs Chadburn is 39 years old, her finances are likely to improve over the many years’ work she has ahead of her.

Mrs Chadburn appealed against the costs award on grounds that her debts actually amounted to £4,000 rather than the £600 taken into account by the tribunal.

The EAT upheld the costs award, finding that affordability is only one consideration as to whether such an award should be made. When affordability is considered, the tribunal can do so using a broad-brush approach, and taking into account future financial earning capacity, rather than undertaking a precise assessment of a party’s current finances.

Chadburn v Doncaster & Bassetlaw Hospital NHS Foundation Trust and anor UKEAT/0259/14

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ECJ rules that “establishment” for collective redundancy consultation purposes means a local employment unit, not the whole company

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An employer making 20 or more people redundant in a 90 day period in a single establishment must consult on a collective basis. But what is meant by ‘establishment’? The EAT held this meant the entire operation of the employer but the Euopean Court has decided that “establishment” means the local employment unit at which the redundant employees carry out their duties. This means that, for example, employees working in shops with fewer than 20 staff, even if they are part of a large national chain which is also being shut down, are not entitled to be consulted over proposed redundancies.

Woolworths and Ethel Austin, both national retail chains, went into administration. Only those staff who worked in shops with over 20 staff were given compensation for the failure to inform and consult them over redundancies. Those staff who did not receive compensation appealed to the Court of Appeal on grounds that the “establishment” is the entire chain which employed thousands of staff.

The European Court of Justice held that an “establishment” only refers to the local employment unit – in these cases, most likely the individual shops. To construe it more widely would lead to a disparity between the law in different EU member states. The case has returned to the Court of Appeal for determination, though it is next to inconceivable that the result would be anything other than a finding that the employees of the shops with fewer than 20 staff did not need to be consulted.

This decision will be welcome news for large employers with multiple outlets, as it has previously been difficult to see when collective redundancy consultation is necessary.

USDAW and another v WW Realisation 1 Ltd (in liquidation), Ethel Austin Ltd and another (C-80/14)

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Disobeying instruction not to contact external independent authority is grounds for dismissal

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“Too many foreigners in the English game” has been cited by the Brazilian football legend Carlos Alberto as a reason for the English national side’s poor showings in international tournaments. Could Brexit give more English-born players a chance to play in the Premier League?

An employee who disobeyed an instruction not to contact the Information Commissioner’s Office was fairly dismissed.

Mr Barton was a tenancy relations officer employed by the Royal Borough of Greenwich. Having heard from a colleague that his manager may have sent confidential personal data to her home computer, Mr Barton contacted the ICO requesting advice. Mr Barton was then asked by Mr O’Malley, the department head, whether he had sought his manager’s authority before doing so. Mr Barton responded by saying that he did not require such authorisation. Mr O’Malley then made clear that Mr Barton was not to have any further communications with the ICO whilst he investigated the allegations.

Despite this instruction, Mr Barton subsequently contacted the ICO to check whether his employer had the authority to prevent him from contacting the ICO. The ICO confirmed that they did not. The outcome of the subsequent investigation showed that only 11 emails had in fact been sent by Mr Barton’s manager to her home computer, none of which contained confidential information. There was a subsequent tenant complaint regarding Mr Barton, following which he was dismissed for gross misconduct. Mr Barton brought a claim for unfair dismissal as a result of whistleblowing.

It was relevant for the tribunal that the instruction to Mr Barton had been simply not to contact the ICO without his manager’s consent. Furthermore, the instruction was for a limited duration, and there was nothing to suggest that the manager would not have given Mr Barton consent to contact the ICO afterwards. Therefore the tribunal could not find that the instruction was unlawful, and concluded that Mr Barton’s dismissal as a result of his disobedience was a reasonable response.

In light of the facts of the case, it would be dangerous to construe this decision as a carte blanche for employers to prevent employees from contacting external authorities. The scope of the instruction, in particular the limited duration of the prohibition, was a decisive factor in the tribunal’s decision. Nevertheless, this decision will help employers, as it is in line with most employers’ aims which would be to address any concerns internally before external bodies are contacted.

Barton v Royal Borough of Greenwich UKEAT/0041/14

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