01 June 2007

Whistleblowers uncapped

Under whistleblowing legislation, an employee has the right not to be dismissed if the reason, or the principle reason, for the dismissal is that he made a protected disclosure. The employee also has the right not to suffer further detriment, for example the non-payment of his bonus, on the grounds that he made a protected disclosure.

A protected disclosure is a disclosure of information to the employer (or certain other recipients), which in the reasonable belief of the employee making the disclosure, tends to show that certain types of ‘wrongdoing’ have been, are being, or are likely to be committed. These ‘wrongdoings’ include criminal offences and failure to comply with legal obligations (including a breach of the employee’s contract of employment) and/or concealment of information tending to show either of these. 

Such whistleblowing claims are on the rise. Typically, they are brought by well remunerated employees who consider they have been dismissed, or suffered other detriment for raising concerns about financial or other serious irregularities in their employer’s business. The financial stakes are high. A successful whistleblower will see the statutory cap on his unfair dismissal claim removed, allowing him to recover damages for his full financial loss.  In our experience, most claims settle before they reach a public tribunal hearing.

The recent Court of Appeal ruling in Babula v Waltham Forest College is good news for whistleblowers and therefore bad news for employers. 

Dr Babula, a lecturer at Waltham Forest College, reported concerns about Mr Jalil, a fellow lecturer, to the College principal saying that Mr Jalil had incited racial hatred and was a threat to national security.   At first instance, the tribunal held that Mr Jalil was inciting religious hatred not racial hatred.  At the time the disclosure was made, religious hatred was not a criminal offence.  Therefore Dr Babula could not be a whistleblower as there was no qualifying disclosure. The EAT upheld this decision but it was overturned on appeal.

Now, it may be sufficent for the employee to be protected if he has a subjective belief that a criminal offence has been, is being or is likely to be committed.  If this belief is held by a tribunal to be objectively reasonable, it is irrelevant that the employee’s belief turns out to be wrong.  In short, there is no requirement for the employee to be right about whether a criminal offence has been committed provided his belief was reasonable and the disclosure was made in good faith.  This applies equally to breaches of legal obligations and the disclosure of such breaches.  If the disclosure was the reason or principal reason for the employee’s dismissal or other detriment suffered, his claim will succeed.

Whilst there is no doubt that many whistleblowing claims are genuine, employers are right to feel sceptical about the true motivation of some employees who raise such concerns. Branding them as ‘troublemakers’ or ‘whingers’ however and ignoring them could prove costly. Employers need to deal with complaints as and when they arise and ensure that reasons for dismissal or other detriment, eg non-payment of bonuses, stand up to scrutiny. If not, well advised employees will see an advantage in bringing a whistleblowing claim to remove the cap on damages for unfair dismissal, leaving employers with an expensive tribunal claim to settle or fight.   

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