Court of Appeal clarifies what “in the public interest” means in Chesterton Global Ltd case

The Court of Appeal has confirmed that a disclosure, made by a whistle-blower about actions by his employer affecting 100 of his senior manager colleagues, amounted to a disclosure made “in the public interest” (Chesterton Global Ltd & another v Nurmohamed [2017] EWCA Civ 314).

Mr Nurmohamed (“Mr N”) was employed by Chesterton Global Ltd (“Chestertons") as an estate agent until he was dismissed in October 2013. Mr N brought a claim in the Employment Tribunal stating that his employment was terminated because he had made a protected disclosure, by informing Chestertons that the management accounts deliberately overstated costs and liabilities. He had reported that the accounts had been manipulated for the benefit of shareholders to reduce the amount of commission paid to 100 senior managers employed by Chestertons, one of whom was Mr N.

To bring a whistleblowing claim, a worker must have disclosed information to an appropriate person, showing a wrongdoing. The worker disclosing the information must reasonably believe he is making the disclosure “in the public interest”. The public interest test was introduced for whistleblowing claims made on or after 25 June 2013 in order to try to limit the scope for workers making whistleblowing claims based on grievances relating to their personal contracts. In this case, the question arose as to:

• how many people need to be affected by the alleged wrongdoing; and
• whether those people needed to be outwith the worker’s organisation

for the public interest test to have been met.

At the Employment Tribunal stage, the Tribunal had found in favour of Mr N. It held that Mr N’s disclosure had been, in Mr N’s belief, in the public interest and the EAT upheld this decision.

The arguments before the Court of Appeal centred on whether "in the public interest" should be interpreted to mean that the interest must "extend outside the workplace" or whether it was in the interests of certainty for employers and employees, that a disclosure would be “in the public interest” if it was in the interests of anyone else beside the worker making the disclosure.

The Court of Appeal found that the fact that 100 employees were affected was a significant number and this should be factored into the decision as to whether a disclosure was "in the public interest". In this case it was sufficient. The Court considered the alternative outcome and indicated that, in a situation where there were multiple breaches of contracts arising from the same circumstances, it would be a "chilling effect" if that could never, by itself, convert a personal interest into a public interest. After all, the whistleblowing legislation seeks to encourage disclosures by employees to employers.

It was suggested in this case that a four-fold test would be useful when considering whether a disclosure is made in the public interest:

• The numbers in the group whose interests the disclosure served;
• The nature of the interests affected and the extent to which they are affected by the wrongdoing disclosed;
• The nature of the wrongdoing disclosed (for example, whether it was a deliberate wrongdoing which would be deemed to be more serious and therefore more so in the public interest);
• The identity of the wrongdoer – the larger or more prominent the wrongdoer, the more obviously the disclosure would be in the public interest.

This test will be helpful for employers when considering whether a potential protected disclosure has been made although the Court of Appeal did state that the test for what is considered to be “in the public interest” does not lend itself to absolute rules. What is clear from this decision however is that the position has not moved as far from the pre-2013 position as some might have expected. While an act by an employer affecting 100 managers is clearly very different to an act impacting one individual only, employers cannot rely on the fact that their actions are impacting employees only, rather than the wider public, to argue that the whistleblowing protections do not apply.