Case law on whistleblowing

[2018] EWCA Civ 1436
Issue: Protected disclosures - Whistleblowing

Facts

An Education Achievement Project Manager was dismissed by her local authority employer allegedly by reason of redundancy. She then brought a whistleblowing claim, arguing that her dismissal was because she made protected disclosures.

She had previously made allegations about colleagues concerning discrimination, health and safety, bullying and safeguarding. Following these concerns she had been suspended pending a disciplinary investigation in about unfounded allegations against her colleagues. She had remained suspended until the redundancy  dismissal.

The key issue was if the Claimant’s disclosures amounted to a protected disclosure for the purposes of whistleblowing.

Decision

The Court of Appeal confirmed the EAT’s view that none of the Claimant’s disclosures amounted to a protected disclosure. So, there could not be a whistleblowing claim. To amount to Whistleblowing there must be a relevant disclosure of information. Here the employees allegations failed to convey specific information which showed a breach of a legal obligation.

Implications for employers

This case is important for employers as it helps explain how each allegation must have sufficient and specific information disclosed to show information which would qualify as a protected disclosure:

• If the employee provides vague information lacking relevant detail, employers can say there has not been a relevant disclosure of information.

• Employees and workers claiming protection under whistleblowing legislation must show breach of an actual legal obligation, rather than just a belief that actions were undesirable.

• It is no longer necessary to determine if a statement is an ‘allegation’ or a disclosure of information. Employers can simply focus on whether there are specific facts which are relevant failures for whistleblowing purposes. 

During a meeting with a customer, an employee with the Royal Mail became concerned that her manager was not following Royal Mail protocol and was failing to meet Ofcom standards. She emailed her manager, effectively blowing the whistle about the manager’s own conduct. The manager said that the employee did not understand the protocol and requested a retraction of the allegation. As the employee feared being sacked she retracted the allegation. After this her manager’s attitude to her changed and she had to attend weekly meetings to monitor her alleged poor performance and was set an 'ever changing unattainable list of requirements’. The employee went off sick and raised a grievance which was allocated to another manager. This manager knew that the employee had raised allegations and then had retracted them, but no further information was given about the original protected disclosures.

The employee was then dismissed by the new manager for poor performance and brought a claim for automatically unfair dismissal on the grounds of her whistleblowing (a protected disclosure).

The matter reached the Employment Appeal Tribunal who decided against the employer. If the manager deciding about the employee’s protected disclosures has been misled and does not in fact have all of the relevant information this does not mean the employer can avoid liability.

Effectively where one manager deliberately misleads another so that the new manager is unaware of the protected disclosure, the employer is still aware of the disclosure and the unlawful motives can be attributed to the employer as a whole.

Implications for employers

• Whistleblowing occurs when a worker brings to the attention of their employer or other relevant organisation information about a wrongdoing.

• The Public Interest Disclosure Act (PIDA) 1998 aims to protect individuals who make disclosures.

• Whistleblowers should not face adverse consequences. It is unlawful to dismiss them and such dismissals are deemed to be automatically unfair.

• Awards for automatically unfair dismissal claims on the grounds of a protected disclosure are uncapped.

• Whistleblowing complaints should be investigated immediately.

• Employers should have a whistleblowing policy and regularly train staff, especially managers, on the contents of the policy and how to handle whistleblowing situations.

• Whistleblowers can become alienated from their colleagues and subjected to victimisation and harassment from management. This is often the case if the complaint is against their manager.

• Employers will always be held responsible for the acts carried out by their staff and so when a whistleblowing complaint arises, employers should ensure there is no detrimental treatment for the person making a complaint.

• Difficulties can arise where the person responsible for the problem is also the manager to whom the complaint should be made. There should be a system for reporting to a more senior managers and all staff should know to whom their complaints should be made.

• All necessary information should be given to the decision making manager before a decision is reached. The balance is difficult as the manager must be aware of all relevant facts, yet not be unduly influenced in their decision.

• In some direct discrimination case law for a decision to dismiss to be discriminatory the dismissing manager must have had discriminatory motives - see CLFIS (UK) v Reynolds (unreported, [2015] EWCA Civ 439, CA). By contrast in this case it was sufficient if unlawful motives can be attributed to the employer.

​(unreported, UKEAT/0163/15 27 August 2015, EAT)
Issue: Whistleblowing - public interest

An HGV driver and three colleagues complained about the safety and road-worthiness of their lorries and after doing so alleged they were then granted less overtime and paid less. After raising this complaint, the driver was dismissed.

He claimed automatically unfair dismissal and detriment as a result of the protected disclosure he had made. The issue was whether a contractual dispute between employees and their employer was a matter of public interest and if the claim had no reasonable prospect of success.

The Employment Appeal Tribunal held that an employee may rely on the whistleblowing legislation in relation to a complaint about the application of terms in their own contract of employment where there is a public interest dimension to the complaint. Because the complaint related to concerns about vehicle safety and road-worthiness, it could be considered a matter of public interest.

The claim would therefore proceed to another hearing to determine whether the driver was dismissed because he had made a protected disclosure.

Implications for employers

• Employers should be aware that employees may bring claims on the basis of allegations about their own contracts (which seems to be bringing the position closer to how the law used to be before 2013).
• If an employee can show that they were dismissed because of whistleblowing they do not need two years’ service to bring a claim of unfair dismissal. The dismissal will be automatically unfair and the compensation is unlimited.
• When the whistleblowing legislation was introduced in 1998 it was drafted so widely that employees simply making a disclosure about their own contracts were included.
• In 2013 the legislation was amended so that a disclosure had to be made 'in the public interest.' What is meant by 'the public interest' has not been entirely clear.
• Previous cases such as Chesterton Global Ltd v Nurmohamed decided that the term 'public' could mean a small group of the public, including other employees employed by the same employer.
• Employees may therefore bring claims based on their own contracts if there is a health and safety or other public interest element to the claim.
• Employers may need to keep their whistleblowing policies under review to see if complaints about employees' own terms and conditions are included as possible matters of concern falling within the policy.

[2016] Appeal No. UKEAT/0149/16/DM
Issue: Protected disclosures - Whistleblowing

Facts

A sales executive for a broking business was dismissed for gross misconduct. She and her colleagues frequently used a tool called Bloomberg Chat to communicate with clients. The Managing Director used the employee’s login details to chat with her clients on her computer, without explaining to clients that it was him.

The  employee said it was wrong for him to effectively pretend to be her. However the MD still got IT to unlock the her computer on a number of occasions. He said that changing her login details without telling him would be gross misconduct. Later three of the executive's clients were reallocated to other brokers and she was suspended due to two trading errors. She switched off her computer before leaving work and did not attend the disciplinary hearing. She was dismissed for the trading errors and for gross misconduct for insubordination because of switching off her computer without notifying her boss. 

She claimed automatically unfair dismissal and whistleblowing related detriment. 

Decision

The EAT held that the employer had not breached a legal obligation for the purposes of the whistle blowing legislation. 

The EAT found that the employee had made a disclosure of information, but that sheit was not established that she reasonably believed all employees were bound by a particular, legal obligation that had been breached. As this could not be proved, the employee could not rely on having made a protected disclosure.

The EAT overturned the finding that the disclosures had led to the alleged detriment. The alleged detrimental treatment  was due to the Claimant's conduct, which amounted to insubordination. 

Implications for employers

Employers must not subject workers or employees to detriment as a result of them making a protected disclosure. In order to be protected a disclosure must (among other things) convey facts or information; and show that the employer has committed certain types of wrongdoing.

If the employee cannot show which legal obligation is allegedly breached, the employer may have a defence:

• The employee must hold a reasonable belief in the breach of a specific legal obligation and at least identify the legal obligation they are relying on. 
• There has to be more than a belief that the employer's actions were generally wrong. 

When sued by an ex-employee especially those who are representing themselves employers should consider if a legal obligation has been identified when drafting their defence.

​(unreported, UKEAT/0335/14 8 April 2015, EAT)
Issue: Whistleblowing - public interest test

A senior manager at an estate agent blew the whistle on three occasions. He was concerned about his employer’s commission structure and alleged that the company’s accounts had been manipulated to the detriment of around 100 senior managers who were all paid on a commission basis. The senior manager was eventually dismissed and claimed automatically unfair dismissal for whistleblowing i.e. for making the three protected disclosures.

The Employment Appeal Tribunal held that the disclosures potentially affected the bonuses of the 100 managers and that was a sufficient section of the public to satisfy the public interest test.

Implications for employers

• Employers should introduce, review and promote effective whistleblowing policies.
• Where a worker raises a concern about malpractice every effort should be made to ensure that the employer deals with the concern properly.
• Where a protected disclosure has been made, employers should take all reasonable steps to try and ensure that no manager victimises the whistleblower.
• A worker making a public interest disclosure (whistleblowing) must have a reasonable belief that it was made in the public interest.
• A reasonable belief that the disclosure affects a relatively small section of the public will be sufficient to form the basis of a whistleblowing claim.
• A whistleblower cannot simply rely upon a breach of his own employment contract if there are no wider public implications at all.
• A relatively small group will satisfy the public interest test and the number of people in that group will vary from case to case.

​(unreported, EAT/0464/13 14 September 2014, EAT)
Jurisdiction (legal test for whether foreign nationals can bring unfair dismissal and whistleblowing claims)

The claimant was a US employee of a US company who was paid in US Dollars. He worked about half his time in the UK (managing the UK and Abu Dhabi businesses) and the rest in the US. He got a daily allowance for each day spent in the UK.  Employment contracts should always expressly state which country's legal system applies to the relationship, but this one did not. There was a clause in the contract saying that all disputes would be dealt with under the rules of the American Arbitration Association. The claimant was on numerous US boards and committees of the employer company. When in London he lived in rented accommodation paid for by the employer. He had furniture and home effects in Texas where he and his partner lived.

The employer introduced a permanent local Chief Executive Officer to head the UK business. While he was in the US the claimant's UK secondment was ended, followed by a redundancy dismissal. He claimed unfair dismissal and whistle blowing and sexual orientation discrimination under the Equality Act 2010. The issue was did the UK employment tribunal have jurisdiction to consider his claims or was it a matter for the relevant state in the US?

The Employment Appeal Tribunal (EAT) decided the strongest connection of the employment contract was to the US. The EAT held that neither UK or EU law was engaged and the employment relationship was an American relationship.

Implications for employers

• Employers should ensure that all contracts of employment have a 'choice of law' clause which clearly specifies which legal system applies to the contract.
• Employers should ensure that all contracts of employment have a choice of jurisdiction clause which clearly specifies which legal system has the power to deal with any disputes regarding the contract.
• The choice of law and jurisdiction often select the same place, but not in all cases.
• Employers must understand the implications of international postings and secondments.
• The Employment Rights Act 1996 and the Equality Act 2010 for example, do not have a clear statement of their territorial scope. The courts and tribunals therefore left decide which sorts of employees are entitled to protection and which are not.
• Where UK nationals are working within the EU, the UK courts should seek to allow employees to pursue any rights deriving from EU Directives, for example paid holiday and anti-discrimination rights.
• Generally an employee must show a sufficiently strong connection to the UK and that the connection is stronger than with any other jurisdiction.
• Different issues can arise with UK nationals working overseas and overseas nationals working in the UK.
• The House of Lords decision in Lawson v Serco [2006] IRLR 289, HL states which employees are governed by UK employment law. This includes:
  • those employees who ordinarily work in the UK
  • ‘peripatetic employees’ who are based in the UK, but travel internationally on their employer’s behalf, and
  • expatriates who can show a close connection to the UK.
• An employee’s base therefore depends on a number of factors such as home residence, pay and tax and application of contractual terms.
• Ordinarily, working in the UK at the time of dismissal is an indication that that the employee falls within UK employment law. However it is not absolutely definitive. In establishing the strongest connection, numerous factors, including the deliberate intention of both parties, the contractual terms and the workings of the contract in practice will be taken into account.

​(unreported, UKEAT/0449/12 27 March 2014, EAT)
Issue: Whistleblowing - victimisation guidance by EAT

A chain of pharmacies employed a pharmacist who was required to ensure compliance with all relevant statutory and regulatory requirements. During her first week of employment she identified 17 health and safety concerns which she set out in an email. Shortly afterwards she was dismissed which she claimed was for whistleblowing for making protected disclosures. She claimed automatically unfair dismissal and unlawful detriment based on her having made the protected disclosures.

The Employment Appeal Tribunal (EAT) held that the employment tribunal had failed to identify properly, with reasons, which of the various concerns raised by the claimant amounted to protected or qualifying disclosures. However it upheld the tribunal’s decision that the claimant was unfairly dismissed and set out some useful guidance as to how tribunals should analyse employees' claims for victimisation for having made protected disclosures:

• Each disclosure should be identified separately by reference to date and content.
• The basis on which each disclosure was said to be protected should be identified.
• The alleged failure to comply with a legal obligation and the source of the legal obligation should be identified in each case.
• Each detriment should be identified separately and, where relevant, the date of the act or deliberate failure to act.
• The tribunal should determine whether the disclosure was made in the public interest or for disclosures before June 2013, whether the disclosure was made in good faith.

Implications for employers

• In this case, the EAT gave comprehensive guidance on how employment tribunals should approach claims by employees that they have been victimised after whistleblowing.
• Employers involved in a whistleblowing claim should carefully identify the protected disclosures and detriments in each case and should wait for the employee to identify the precise reason why they say they were subjected to a detriment. If the employee cannot identify these issues tribunals should not uphold the employee's claims.
• If an employer has whistleblowing concerns during a grievance or disciplinary process then the employers should separate out the issues and verify if any of the actions being taken by the employer’s managers were the result of the whistleblowing concern.
• Employers should decide if they or their managers are:
  • tackling unacceptable behaviour by employees which arise in the aftermath following an earlier whistleblowing complaint, or
  • treating the employees detrimentally because of the whistleblowing itself.
• If the managers were acting in response to the unacceptable behaviour, rather than the whistleblowing then the employee may not have been entitled to the extra whistleblowing protections.

​(unreported, [2012] EWCA Civ 1207 26 September 2012, CA)
Issue: Whistleblowing and sex discrimination

A solicitor and equity partner with a City law firm was seconded to a Tanzanian law firm in 2010. A few months later she discovered that the Managing Director of the Tanzanian law firm had paid bribes to get work and a favourable outcome to a case. She blew the whistle, but the allegations were denied by the City law firm and she was subsequently dismissed. She had also recently informed the firm that she was pregnant. She brought claims in the UK employment tribunal alleging that she had been subjected to a detriment for making a protected disclosure (whistleblowing) and that she had been unlawfully discriminated against because of her sex and/or pregnancy. The City law firm contended that the tribunal did not have jurisdiction to hear the claims and maintained that she was not a worker in respect of the whistleblowing claim.

The Court of Appeal, disagreeing with the Employment Appeal Tribunal, held that where someone is a partner of a traditional partnership, or member of a limited liability partnership ( LLP), they cannot be a worker. Her sex discrimination claim could proceed as this was specifically allowed under the Equality Act 2010, but the whistleblowing claim could not.

Implications for employers

• This is the first case to consider if members of LLPs fall within the class of ‘workers’. Previous cases, including Tiffin v Lester Aldridge LLP have considered whether a member of an LLP is an employee.
• If an employer is an LLP then it may not be vulnerable to claims under the whistleblowing legislation or other regulations (for example those governing working time) which apply to workers as well.
• However the terms of the members’ agreement will be critical in establishing if individuals are genuinely members, so these should be drafted very carefully.
• If an employer is an LLP it will still be vulnerable to discrimination claims under the Equality Act 2010.
• Importantly for LLP employers, this case suggests that there is no obligation to provide a qualifying pension scheme for members under the automatic enrolment pension legislation which applies to workers.
• In other cases partners have been found to have employee status where they had a fixed share (rather than an equity share) in the partnership, so some partners will still be protected.

​(unreported, [2011] EWCA Civ 1190 25 October 2011, CA)
Issue: Whistleblowing - detriment

Three registered nurses were employed in a walk-in health centre. The nurses had made genuine protected disclosures about another employee who had been exaggerating his qualifications. This employee eventually apologised about exaggerating his qualifications and it was decided that no further action would be taken against him. The nurses were then subjected to the actions of other members of staff at the centre who were supportive of the employee. Ultimately one nurse was removed from her managerial responsibilities and she and another were redeployed away from the walk-in centre. The third nurse, who was a bank nurse, was not given further work. All three brought employment tribunal proceedings, alleging that they had been subject to a detriment as a result of their protected disclosure, contrary to the protection for whistleblowers in Section 47B of the Employment Rights Act 1996.

The Court of Appeal disagreed with the Employment Appeal Tribunal and found that the employer was not liable for the actions of the other members of staff towards the three nurses or the subsequent treatment. An employer can only be vicariously liable where the employees have committed a legal wrong. Under the discrimination legislation, individuals may be personally liable for their acts of victimisation taken against those who pursue discrimination claims. However by contrast, there is no provision which says it is unlawful for workers to victimise whistleblowers as such. There is no claim of whistle blowing victimisation and so the claims could not succeed. The employer could only be liable if the whistle blowing had materially influenced the employer’s treatment of the employees.

Implications for employers

• If workers allege a detriment for whistle blowing the employer will only be liable if the protected disclosure has materially influenced the employer's treatment of the whistleblower (a material influence is more than a trivial influence).
• Employers cannot be vicariously liable for the acts of general victimisation of whistleblowers where the employees doing the victimisation have not committed a legal wrong.
• If a protected disclosure does materially influence the employer's treatment of the whistleblower then the employer will still be liable for failing to protect the whistleblower.
• Whistle blowing allegations can lead to a breakdown in workplace relationships but employers will have to be very careful to pro-actively manage the relationships between employees after such allegations.
• Employers must still ensure that any steps taken to resolve any discord do not amount to detrimental treatment of the whistleblower.