Whistleblowing is in public interest if it only affects one company, judges rule

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Jul 12, 2017
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A Chestertons estate agent claimed that the company’s profits were being artificially suppressed to reduce the level of commission payable to him and some colleagues 

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Whistleblowers can meet the public interest test even if only members of their business or organisation are allegedly affected by their claims, Court of Appeal judges have ruled in a landmark decision.

Lawyers said that the ruling on Monday in a case involving the estate agent Chestertons would provide a significant boost to those considering blowing the whistle on what they allege to be discriminatory internal business practice. 

The court ruled that whistleblowers must demonstrate that they “reasonably believe” that their disclosure was made “in the public interest”. The case involved Mohamed Nurmohamed, who worked for the estate agents Chestertons. He brought a whistleblowing claim after his employer changed its commission payment system to agents from one based on revenue to one calculated on actual profits.

Nurmohamed reluctantly agreed to this change despite taking the view that it would damage his earnings. After monitoring the revised arrangement, he took the view that the company’s profits were being artificially suppressed to reduce the level of commission payable.

He claimed that about 100 other Chesterton staff were negatively affected by the commission restructuring and claimed that, as a result of the number of people involved, his complaint was in the public interest. The court was told that shortly after complaining Nurmohamed was dismissed. Nurmohamed brought claims of unfair dismissal and whistleblowing to the employment tribunal, which backed him as did the appeals tribunal.

Now three Court of Appeal judges – Lady Justice Black, Lord Justice Beatson and Lord Justice Underhill – have also found in Nurmohamed’s favour. They found that Nurmohamed’s disclosure was in the public interest because it affected a significant number of employees. It also found that the wrongdoing was deliberate and the misstating of the accounts was significant. It was also important that the organisation was a well-known national business.

Glenn Hayes, a partner at the national law firm Irwin Mitchell, said: “This decision makes it clear that what is or is not in the public interest is not just about the numbers of people affected. Other factors must also be in play. The identity of the whistleblower is also important and the court suggested that the more prominent the whistleblower, the more likely the disclosure will be in the public interest.”

Hayes said that the court’s decision means that the nature of the wrongdoing is also relevant. “Something that is done deliberately is more likely to be in the public interest than if it was inadvertent even if it affects the same number of people,” he said.

However, Udara Ranasinghe, a partner at the defendant insurance specialist practice DAC Beachcroft, argued that the court’s decision “has the benefit of legal purity at the cost of certainty”. He said: “In essence, the court has said that there are no hard and fast rules about whether or not something is in the public interest – an employment tribunal in making this decision will have to look at the substance of what was said and decide by looking at all the circumstances whether this is in the public interest.”

Acting for Nurmohamed were James Laddie, QC, of Matrix Chambers in Gray’s Inn, who was instructed by Teacher Stern. David Reade, QC, of Littleton Chambers in the Temple, acted for Chesterton and was instructed by Doyle Clayton. Thomas Linden, QC, also of Matrix, acted for the intervener, Public Concern at Work; he was instructed by CM Murray.

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