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Landmark decision, comfort to prospective whistleblowers

The Court of Appeal has held in Chesterton Global Ltd (t/a Chestertons) and anor v Nurmohamed that an estate agent’s complaints about the manipulation of accounts which potentially adversely affected the bonuses of 100 senior managers amounted to a protected disclosure in the public interest. Comment from Emma Burrows, Partner at Trowers & Hamlins.
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The Court of Appeal has held in Chesterton Global Ltd (t/a Chestertons) and anor v Nurmohamed that an estate agent’s complaints about the manipulation of accounts which potentially adversely affected the bonuses of 100 senior managers amounted to a protected disclosure in the public interest. Comment from Emma Burrows, Partner at Trowers & Hamlins.

While he was principally concerned with his own position, Mr Nurmohamed did have other senior managers in mind and, as a section of the public would be affected, the public interest test was satisfied. The words “in the public interest” were inserted into whistleblowing legislation by the Enterprise and Regulatory Reform Act 2013 for disclosures made on or after 25 June 2013.  The purpose of the introduction of the public interest test was to reverse the effect of a case called Parkins v Sodhexo Ltd so that a worker cannot rely on a breach of his own employment contract where there are no wider public interest implications.

Mr Nurmohamed was employed as a senior manager at the Mayfair branch of Chestertons, the estate agent.  Following changes to the company’s commission structure, he made disclosures to the area director and the HR director on three separate occasions in which he complained about manipulation of the company’s accounts, which he believed had an adverse effect on his commission income, and the commission income for around 100 senior managers.  The effect of the manipulation was to make the company appear more profitable, to the benefit of its shareholders.

He was dismissed and brought various claims against Chestertons.  At first instance the tribunal found that he had been automatically unfairly dismissed and that Chestertons had subjected him to detriments on the grounds that he had made protected disclosures.  The tribunal noted that there was no authority on the meaning of “in the public interest” and held that it was not required that a disclosure had to be of interest to the entirety of the public, as it was inevitable that only a section of the public would be directly affected by any given disclosure.

Chestertons appealed against the finding that the disclosure was made in the public interest, arguing that 100 senior managers did not comprise a sufficient section of the public to satisfy the public interest test.  The EAT disagreed, holding that the tribunal’s reasoning had been correct.  It also held that there was no need for the tribunal to determine objectively whether a disclosure is of real interest to the public.  The public interest test can therefore be satisfied where the basis of the public interest disclosure is wrong and/or there was no public interest in the disclosure being made, provided that the worker’s belief that the disclosure was in the public interest was objectively reasonable. The Court of Appeal agreed with the tribunal and the EAT and refused Chesterton’s appeal.

Emma Burrows, Partner at Trowers & Hamlins commented: “The Court’s decision will offer comfort to prospective whistleblowers as it shows that the public interest requirement is perhaps less onerous than it was intended to be.  Following Nurmohamed it seems that, provided that a claimant can show that a section of the public will be directly affected, a disclosure will comply with the public interest test.

As Lord Justice Underhill concluded “…where the disclosure relates to a breach of the worker’s own contract of employment…there may nevertheless be features of the case that make it reasonable to regard disclosure as being in the public interest as well as in the personal interest of the worker”.   Provided that the disclosure is also made in the reasonable belief of the individual that it falls into one of the prescribed categories in the Employment Rights Act 1996 it will gain the protection of whistleblowing legislation.”

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