Whistleblowing: Dispute relating to contractual terms can be a matter of "public interest"

2015-10-29 chris posted:

The Employment Appeals Tribunal (EAT) has held that a dispute between an employer and a group of 4 employees relating to their terms and conditions of employment was capable of being a protected disclosure, entitling them to seek protection against unfair dismissal under whistleblowing legislation. The employees had raised a collective complaint regarding the allocation of overtime. The EAT overturned a tribunal's decision to strike out the claim and held that a dispute between employer and employee as to terms of employment is a matter capable of being in the public interest.

The decision appears to be inconsistent with the purpose behind the June 2013 changes made to section 43B(1) of the Employment Rights Act 1996 by the Enterprise and Regulatory Reform Act 2013. The amendments were intended to prevent employees seeking whistleblowing protection in relation to matters regarding their own terms and conditions of employment. (Underwood v Wincanton plc)

In order to be protected against detriment or dismissal under the whistleblowing legislation, a worker must have made a qualifying disclosure. This is any disclosure of information which, in the reasonable belief of the worker making it, is made in the public interest and tends to show that one or more of the six specified types of wrongdoing has taken place, is taking place or is likely to take place (section 43B(1), Employment Rights Act 1996 (ERA 1996)).

Although protection for whistleblowers was introduced by the Public Interest Disclosure Act 1998, for many years there was no "public interest" test in the legislation. The words "in the public interest" were added into section 43B(1) by section 17 of the Enterprise and Regulatory Reform Act 2013 (ERRA 2013) for disclosures made on or after 25 June 2013. This was intended to reverse the effect of Parkins v Sodexho Ltd, in which the EAT held that the definition of a qualifying disclosure was broad enough to cover a breach of the whistleblower's own contract of employment, despite the fact that this did not appear to have a "public interest" aspect. The government felt that this case fundamentally changed the nature of the whistleblowing legislation, widening its scope beyond what was originally intended.

During the passage of the Enterprise and Regulatory Reform Bill, the government resisted an amendment which would automatically exclude breaches of a worker's own contract of employment from constituting a qualifying disclosure. This left the door open for workers to argue that complaining about a breach of their own employment contract was in the public interest.

The EAT in Chedterton Global Ltd v Nurmohamed considered the meaning of "public interest" in the amended legislation and held that it is not necessary to show that a disclosure was of interest to the public as a whole, as it is inevitable that only a section of the public will be directly affected by any given disclosure. A relatively small group (in this case, 100 senior managers) may be sufficient to satisfy the public interest test.

In order to succeed in a whistleblowing claim, a worker does not have to prove that the facts or allegations disclosed are true, or that they are capable in law of amounting to one of the categories of wrongdoing listed in the legislation. As long as the worker subjectively believes that the relevant failure has occurred or is likely to occur and their belief is, in the tribunal's view, objectively reasonable, it does not matter that the belief subsequently turns out to be wrong, or that the facts alleged would not amount in law to the relevant failure (Babula v Waltham Forest College). Following the 2013 amendments to the whistleblowing legislation, a worker must also be able to demonstrate that they reasonably believed that the disclosure was "in the public interest".

Facts

This case concerned Mr Underwood, who was an HGV driver with Wincanton plc. In November 2013, Mr Underwood, together with 3 of his colleagues, submitted a written complaint, regarding their terms and conditions of employment, including, in particular, the way in which overtime was allocated among drivers. Mr Underwood was dismissed in June 2014.

Following his dismissal, Mr Underwood issued a claim in which he submitted, among other things, that the November 2013 complaint amounted to a protected disclosure under section 43B(1)(b) ERA 1996 and that his dismissal was automatically unfair. The claim was listed for a preliminary hearing at which strike-out of the claim would be considered.

In response to a tribunal order, Mr Underwood provided written submissions addressing why the November 2013 complaint was in the public interest. In these submissions, reference was made to the fact that some of the drivers who were granted less overtime had raised concerns regarding the safety and road-worthiness of vehicles. These references could have been interpreted as implying that there was a wider public interest in the case relating to road safety. However, this was not expressly stated or developed as an argument in the case.

The Regional Employment Judge struck out the claim, holding that as it related to a dispute between Mr Underwood (and three of his co-workers) and Wincanton, he was not entitled to seek the protection of section 43B(1) ERA 1996. He observed that a dispute between an employer and employee relating to the terms of employment existing between them is not something which the public are affected by, directly or indirectly. Therefore, Mr Underwood could not have held a reasonable belief that the matter was in the public interest.

Mr Underwood appealed to the EAT.

Decision

The EAT first looked at whether there were any grounds for distinguishing Chesterton and concluded there were not. In Chesterton, the inaccurate accounts had raised the question of whether there had been fraud, which the EAT noted was self-evidently a matter of public interest. However, although only implicit in the claim, there was a suggestion that those making the disclosure had been raising concerns of vehicle safety and road-worthiness, which raised wider issues of road safety, which the EAT noted might also be thought to be a matter of public interest.

The EAT went on to consider the various grounds of appeal. First, it considered whether the tribunal had applied too narrow a definition of “public” when applying the “public interest” test. It was clear from Chesterton that “public” could be constituted by a subset of the public, “even if that subset comprised persons employed by the same employer on the same terms”. Therefore, in holding that a dispute between Mr Underwood, and his fellow employees, and Wincanton could never be said to be in the public interest, the tribunal had plainly applied too narrow a definition of "public".

Further, the EAT noted that the tribunal had directed itself that disputes relating to terms and conditions of employment could not constitute matters in the public interest. This, the EAT held, was inconsistent with the decision in Chesterton and therefore a misdirection.

Finally, in relation to the tribunal's ruling on “reasonable belief”, the EAT noted that in Chesterton, it was held that a matter between employees and their employer, where mutuality of obligation existed, was capable of being a matter within the public interest. It followed that an employee could reasonably hold the belief that a disclosure relating to such matters could be within the public interest and the tribunal's conclusion on this point could not be sustained.

Comment

The nature of the disclosure in this case fell “squarely within the provisions of the Parkins v Sodexho case in that it is a dispute between the claimant and the respondent with reference to the terms of employment existing between the claimant and the respondent.” The judge was clear in his views that disclosures of this nature could not be a matter of "public interest". Given Parliament's intention in amending section 43B(1) ERA 1996, it is hard not to have some sympathy with this position. Following the EAT's decisions in Chesterton and now Underwood, it appears that the law has come full circle and a Parkins v Sodexho -type disclosure is once again capable of protection under the whistleblowing legislation.

Chesterton is being appealed to the Court of Appeal but is not due to be heard until October 2016. In the meantime, it is likely that further cases involving individual contractual disputes will be held as being within the public interest following this decision.

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