PIDA Whistleblowing and the “In the Public Interest” – Latest on Whistleblowing Law

The Court of Appeal has delivered an important judgment clarifying the phrase ‘in the public interest’ in the context of the Public Interest Disclosure Act (PIDA), the UK’s core whistleblowing legislation. We explain PIDA below, and go on to summarise the key aspects of ‘whistleblowing‘, and look at the decision in Chesterton Global Ltd v Nurmohamed [2017] EWCA 979 which confirms that a disclosure may be in the public interest even if it includes a ‘private interest’ element.

What is PIDA?

The Public Interest Disclosure Act 1998 (PIDA) is the legislation that protects whistleblowers in the UK. It gives workers the right to speak up about wrongdoing in the public interest without fear of being dismissed or treated unfairly by their employer. Protection applies from the very first day of employment, and if a worker suffers detrimental treatment after making a disclosure, they can bring a claim for compensation before an employment tribunal.

What is a qualifying disclosure under the PIDA?

Under the Public Interest Disclosure Act 1998 (PIDA), a qualifying disclosure is when a worker shares information they reasonably believe highlights a “relevant failure” that has happened, is happening, or is likely to happen — and where raising it is in the public interest. The law recognises six types of failures, such as criminal offences, breaches of legal duties, risks to health and safety, and damage to the environment.

PIDA whistleblowing

The Public Interest Disclosure Act 1998 (PIDA) protects workers who raise issues of wrongdoing at work with their employer. The main provisions of this legislation are incorporated into Part 4A of the Employment Rights Act 1996. Key points to remember are:

• The legislation protects ‘workers’
• The worker must make a ‘qualifying’ disclosure, and must follow the procedure set out in the legislation, in order to be protected
• A ‘qualifying disclosure’ relates to specific activities that are defined in the legislation
• The worker must reasonably believe that the activity has already taken place, is taking place or will happen in the future
• ´Blowing the whistle’ (ie. making a disclosure) does not, in itself, give the worker a right to make a claim. The protection arises if the worker is punished, or is dismissed or suffers another detriment relating to the disclosure they made.
• It is of critical importance that the worker has a reasonable belief that the disclosure is in the public interest
• If a worker is dismissed for making a protected disclosure – it is automatically unfair, and has no qualifying service requirement
• A clause in a settlement agreement requiring confidentiality will not apply if the individual concerned is making a protected disclosure.

“In the public interest” and reversing the EAT’s decision in Parkins v Sodhexo

Section 17 of the Enterprise and Regulatory Reform Act 2013 introduced the words ‘in the public interest‘ into the definition of a ‘qualifying disclosure’. It was inserted following the decision in Parkins v Sodexho Ltd [2002] IRLR 109 and the fallout from that decision. In that case, Mr Parkins argued that his disclosures about his employer’s alleged breaches of his employment contract amounted to disclosures showing a breach of ‘any legal obligation’ under the PIDA. This meant that he could claim automatically unfair dismissal and did not need the usual 1 year’s qualifying service.

The Employment Tribunal agreed with the employer that the whistleblowing legislation was “designed to disclose those matters in the public interest. It is not concerned with a worker who wishes to disclose some malpractice for his own ends, possibly to try to gain a private advantage. As the title of the Bill clearly indicates, it is concerned with the public interest”.

The Employment Tribunal dismissed the claim. However, the Employment Appeal Tribunal did not agree, and gave a very wide definition to the phrase ‘any legal obligation‘ to the extent that it covered the breach of an employment contract.

The widening of the scenarios covered by the PIDA following the EAT’s decision in Parkins was reversed with the introduction of the words “in the public interest” into the legislation by section 17 of the Enterprise and Regulatory Reform Act 2013.

Defining ‘In the Public Interest’ Under PIDA

The question of what “in the public interest” means has now been considered by the Court of Appeal in Chesterton Global Ltd v Nurmohamed [2017] EWCA 979, clarifying the approach the Employment Tribunal should take to what is a ‘reasonable belief in the public interest’. The disclosure by Mr Numohamed in this case was that his employer, Chestertons, was manipulating internal accounts to reduce the amount of commission he, and about 100 fellow managers, would receive. At the heart of the case was the question of whether the interests of a group of managers could fall within the meaning of ‘in the public interest’.

Can a private matter which affects one employee be ‘in the public interest’ because it is also in the private interest of a larger group of individuals?

Private matters can also be ‘in the public interest’

This interpretation aligns with the broad approach taken under PIDA, which allows for overlap between private and public concerns in certain circumstances. There can be a overlap, depending on a number of factors, including how many workers are affected, the nature of interests affected, the nature of the wrongdoing and the identity of the alleged wrongdoer. The Tribunal needs to take all these factors into account.

In Mr Nurmohamed’s case, the Court of Appeal found that in addition to the number of managers affected, the activity that was disclosed amounted to deliberate wrongdoing, of a sizeable amount (some £2-3 million). The employer’s size and importance in the London property market was also influential in the decision. As a result, the Employment Tribunal had been entitled to find that the disclosures were ‘in the public interest’ even though there was also a ‘private’ element to the disclosure.

A “reasonable belief” under PIDA

Although the Court of Appeal focused on the question of ‘in the public interest’, the decision also confirmed the EAT’s view on what constitutes a ‘reasonable belief’ under PIDA that the disclosure was in the public interest. The Court held that there is both a subjective and an objective element to this – there could be more than one ‘reasonable belief’ and the Tribunal should not substitute its own decision as to what would be reasonable.

The fact that the belief is incorrect does not prevent it from being reasonable at the time. What is more, the reasonable belief that the disclosure is in the public interest does not have to justified by the reasons relied on by the employee at the time. An employee can justify his reasonable belief retrospectively, by relying on reasons other than those he held at the time – provided, on the evidence, that the employee can provide credible reasons for why he thought the disclosure was in the public interest.

Next steps

We would encourage every organisation to review their whistleblowing policy and make sure processes are in place to allow workers to disclose concerns about the workplace in an appropriate way.

If you don’t have a whistleblowing policy in place or feel you need more guidance and advice about the rules around PIDA whistleblowing, our employment law solicitors will be happy to help.

Equally, if you’re a worker who has concerns about matters at work which may involve the public interest and are unsure what to do about these, or you’ve raised your concerns and have been dismissed or feel you are being treated unfavourably as a result, our whistleblowing solicitors can talk through the issues with you and help you understand the next steps to take.

Whether you are an employer or a worker, understanding your rights and obligations under PIDA is essential when handling whistleblowing concerns

Meredith Hurst