Whistleblowing - Michelmores Employment Law Update

Those of you who attended our Autumn Conference in 2006 may be interested to learn of some recent developments in the area of whistleblowing ? that is, claims of suffering a detriment or dismissal on account of making a protected disclosure under the Public Interest Disclosure Act 1998 (PIDA).

The scope of PIDA

The case of Croke v Hydro Aluminium Worcester Ltd concerned an individual who supplied his services to an employment agency through his own service company. The employment agency, in turn, supplied the services of that company to an end user client. Despite this very commercial arrangement, the Employment Appeal Tribunal (EAT) held that the individual was a ?worker? for the purposes of section 43K of the Employment Rights Act 1996 (ERA) (which incorporates provisions of PIDA). The individual was therefore entitled to bring a claim that he had suffered a detriment (in this case the termination of this contract) on the grounds that he had made a protected disclosure.

Reasonable Belief

To gain protection under the PIDA, a worker need only hold a reasonable belief that the information disclosed tends to show one of the ?relevant failures? under s.43B ERA (e.g. that a criminal offense was being committed, that the employer was in breach of a legal obligation, or that there was a risk to health and safety or the environment). If the worker is ultimately shown to be wrong, this will not be fatal to his whistleblowing claim, providing that the mistake was reasonable.

In 2004, the case of Kraus v Penna plc & anor imposed a controversial limitation on the concept of reasonable belief. The EAT in that case held that, although a whistleblower?s claim will not be defeated if he is reasonably mistaken about the factual basis of the alleged malpractice, the claim will fail if, as a matter of law, the employer was not actually under any legal obligation in the first place, or the alleged act(s) could not amount to a criminal offence.

This is a subtle but important distinction which has recently been examined by the Court of Appeal in the case of Babula v Waltham Forest College. Mr Babula was a lecturer on a business course who discovered that his predecessor, Mr Jalil, had not taught the course curriculum but had divided the class into an Islamic group (to whom he taught religious studies) and a non-Islamic group (which he ignored). He had also told the Islamic group that he wished that a terrorist incident, similar to September 11, would occur in London. Mr Babula reported these allegations to the Head of School but subsequently resigned, claiming that he had been subjected to a number of detrimental acts as a result of raising his concerns.

In pursuing a claim for automatic unfair dismissal under PIDA, Mr Babula sought to establish that he had made a protected disclosure on the following grounds:-

That he reasonably believed that a criminal offence of incitement to racial hatred had been committed; and

That the College had failed to comply with a legal obligation by failing to implement it?s equal opportunities policy against those who discriminate on the grounds of religion.

Applying the strict test in Kraus, the Tribunal and the EAT concluded that Mr Babula failed on both of these grounds. Firstly, the alleged actions of Mr Jalil were undertaken on the grounds of religion, not race, and at the time, there was no such offence to incitement to religious hatred. Secondly, the Respondent?s equal opportunity made no reference to religious discrimination and so no legal obligation was established. According to Kraus, Mr Babula?s reasonable beliefs were irrelevant if no criminal offence or legal obligation actually existed.

However, the Court of Appeal thought otherwise. Overturning the decision in Kraus, the Court ruled that such a restrictive interpretation would undermine the whole purpose of the whistleblowing legislation, which is to encourage workers to come forward on the basis of their reasonable beliefs ? not their legal expertise. Mr Babula therefore won his appeal.

Breaking the Chain of Causation

In order to succeed in a claim under the PIDA, a worker must prove causation i.e. that the relevant detriment or dismissal was a direct result of having made a protected disclosure. The case of Bolton School v Evans involved an information technology teacher who was concerned about the security of the School?s new IT system. His initial concerns were not addressed and so to demonstrate the system?s potential weaknesses, he hacked into it from a student?s computer, disabled some of the accounts and then told the Head Teacher what he had done. For his trouble, he received a written warning on the grounds of misconduct for breaking into the system without authority. In response to this he resigned, claiming that he had been subjected to a detriment and constructively dismissed for making a protected disclosure.

The Employment Tribunal accepted that there had been a qualifying disclosure under PIDA because the teacher reasonably believed that his employer was likely to be in breach of its legal obligation under the Data Protection Act 1998. The Tribunal further decided that the teacher?s conduct in breaking into the system was so interrelated to his original disclosure that it should be considered to be ?part and parcel of it?. According, as the teacher had clearly suffered a detriment on account of such conduct, his claim was upheld.

However, both the EAT and now the Court of Appeal have rejected this analysis. The EAT drew an important distinction between the disclosure of information itself (which is protected) and the conduct designed to demonstrate that a particular belief was reasonable (which is not). Put simply, E was disciplined for his actions in hacking into the system, not for informing the school that its system was insecure. A worker is not permitted to commit what would otherwise be an act of misconduct in order to justify a disclosure.

Comment

Whilst the EAT?s reasoning is persuasive, it does reveal a weakness in the whistleblowing legislation. If a worker?s actions in investigating suspected malpractice are not protected, it may be difficult to establish a sufficient ?reasonable belief? to ensure that any subsequent disclosure is protected. This will deter potential whistleblowers from coming forward and undermine the purpose of the legislation. Commentators have suggested that one solution may be to soften the statutory test so as to only require a ?genuine belief? (subjective test) or a ?reasonable suspicion?.

Whilst employers will welcome this decision, it is not a ?get out of jail free card?. Tribunals will be wary of employers alleging that an employee was dismissed because of an act related to a disclosure rather than the disclosure itself and employers running this argument can expect a thorough examination of their underlying motives.

AND IN OTHER NEWS

Religion (or a lack thereof) has featured heavily in a number of recent employment law cases.

In the highly publicised case of Azmi v Kirklees Metropolitan Borough Council, Mrs Azmi has lost her appeal regarding her right to wear a veil whilst performing her duties as a bilingual support teacher. The EAT found that an instruction to remove the veil was neither directly or indirectly discriminatory on the grounds of religion or belief. Although the instruction met the criteria for indirect discrimination, the EAT held that the employer was entitled to rely upon the defence of ?objective justification? ? the instruction being a proportionate means of achieving a legitimate aim (namely, the provision of the best quality education).

In Glasgow City Council v McNab an atheist teacher working in a local authority-maintained Roman Catholic school sought a promotion to the position of ?principle teacher of pastoral care?. However, he was refused an interview on the grounds that being of Roman Catholic faith was a prerequisite for the post in question. The Council accepted that it had discriminated against Mr McNab but sought to rely upon the ?genuine occupational requirement? defence contained in the Religion or Belief Regulations. In rejecting the Council?s argument, the EAT held that the responsibilities of a pastoral care teacher involved giving advice upon a large number of issues, not simply the teachings of the Roman Catholic Church (which could be delegated to another teacher). It followed that it was not a genuine requirement for the post holder to be of Roman Catholic faith and the Council had unlawful discriminated against Mr McNab.

Finally, in New Testament Church of God v Stewart, the EAT has confirmed that a minister of religion can bring a claim for unfair dismissal as they are employed under a contract of employment. In rejecting the traditional view that a cleric is merely ?a servant of God?, the EAT held that: ?if the relationship between church and minister has many of the characteristics of a contract of employment in terms of rights and obligations, these cannot be ignored simply because the duties are of a religious or pastoral nature.?

Tim Davies http://employment.michelmores.com/pages/team.asp is an Associate Solicitor at Michelmores Solicitors http://employment.michelmores.com in the Employment Law Department. Contact Tim on tjd@michelmores.com for info.