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21 May 2015 0 Comments
Posted in Employment, Opinion

Public interest test for whistleblower protection

Author headshot image Posted by , Partner

In the first appellate decision on the public interest test which was inserted into the whistleblowing provisions of the Employment Rights Act 1996 in June 2013, Chesterton Global Limited and another v Nurmohamed is an EAT decision on what can pass the public interest test. Despite the employee’s motivation for making the disclosure being the effect on his and other managers’ commission payments, the manipulation by the company of profit and loss figures was held to pass the public interest test.

The individual was a director of one of Chesterton Global’s offices. He made three complaints to senior managers that there were inaccuracies in the company’s statements of profit and loss and the corporate figures were being manipulated to benefit shareholders. His concerns were that these inaccurate figures were being used to calculate commission and that a deliberate misstatement of figures in the profit and loss accounts would adversely affect the earnings of over 100 senior managers. When he was dismissed he brought claims of automatic unfair dismissal for having made a protected disclosure which was upheld by a Tribunal. The Tribunal held that his disclosure was a protected disclosure in relation to breach of a legal obligation and that it did pass the public interest test; and that the individual had reasonably believed that the disclosure was in the public interest.

The company’s appeal to the EAT was dismissed. It held that what was relevant was whether the individual making the disclosure had a reasonable belief that the disclosure was in the public interest; and it was held here that he did. Although the individual was understandably concerned about the effect on his own earnings, both the Tribunal and the EAT were satisfied that he also had at heart the concerns of other employees who would be similarly financial affected. The fact that the company was a private one rather than a public limited company did not matter.

This legal update is provided for general information purposes only and should not be applied to specific circumstances without prior consultation with us.

For further details on any of the issues covered in this update please contact Gemma Ospedale, Partner in Employment on 020 7583 2222.

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