Previous Article Next Article Blowing the whistleOn 1 Apr 2002 in Personnel Today The outcome of a recent employment tribunal could pave the way for claims ofunfair dismissal under the whistleblowing legislation – without the one yearservice required. Malcolm Pike looks at practical ways employers can protectthemselvesThere can be few employers who have not had to deal with breach of contractclaims from disgruntled former employees. Now imagine that in addition to theobvious claim under contract law, those employees also have a whole new causeof action for automatic unfair dismissal, with no service or age requirementand no cap on compensation. What is more, the employee can also claim interimrelief until the date of the hearing (likely to be several months in some areasof the country) which, if successful, would mean the employer must continue topay the dismissed employee their full wages during that period. With its controversial judgement in Parkins v Sodexho Ltd  IRLR 109,the Employment Appeal Tribunal has made this unwelcome scenario a potentialreality. The case established that a worker can claim the protection of thePublic Interest Disclosure Act 1998 – or the ‘Whistleblowing Act’ as it hasbecome known – where the ‘protected disclosure’ in question is a breach of theemployment contract. When it came into force on 2 July 1999, the PIDA inserted new provisionsinto the Employment Rights Act 1996 to protect workers from dismissal or otherdetriment at the hands of their employers for disclosing information aboutcertain kinds of malpractice. The Act provides protection for employees byrendering automatically unfair the dismissal of an employee for having made a‘protected disclosure’. The statutory definition of ‘protected disclosure’includes any disclosure of information which, in the reasonable belief of theemployee or worker making the disclosure, ‘tends to showÉ that a person hasfailed to comply with any legal obligation to which he is subject’. The EAT’sbroad and employee-friendly interpretation established that this failure caninclude a breach of the employment contract. Parkins v Sodexho – the facts Mr Parkins was employed by Sodexho Ltd from 17 January 2000 until 28 April2000, when he was summarily dismissed. The reason for his dismissal, heclaimed, was that he had complained to Sodexho that there was no supervision onone of the sites where he worked. He said that, instead, he had to telephonehis day supervisor to inform him when he left at the end of his shift and ofany problems that he had encountered during the shift. He brought a claimbefore an employment tribunal arguing that Sodexho was legally obliged, underhis contract of employment, to arrange for him to report directly to on-sitesupervisors and that the company’s failure to do so not only amounted to abreach of contract but also to a breach of ‘any legal obligation’ under thePIDA. Since he did not have the necessary one year’s service to claim unfairdismissal in the usual way his argument that he was covered by the PIDA wascrucial. The tribunal’s decision – claim not in spirit of the legislation In the employment tribunal Mr Parkins’ argument was rejected. As thetribunal saw it, “[w]hile everybody is obliged to comply with contracts ofemployment, we do not consider that an allegation of breach of an employmentcontract in relation to the performance of duties comes within the letter orspirit of the statutory provision”. This is not a surprising view for thetribunal to take. As one of the promoters of the legislation, Lord Borrie, saidduring the committee stage of the Bill’s passage through Parliament:”[t]his Bill is meant to encourage any worker in any workplace whodiscovers a malpractice of some kind, whether it is financial, a breach ofsafety regulations or the commission of a criminal offence by the employer –several examples were given to me and several other noble Lords during secondreading – to disclose those matters in the public interest. It is not concernedwith 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 clearlyindicates, it is concerned with the public interest’. So, an employee whomerely alleges breach of contract to contrive a claim for unfair dismissalshould fall outside the Act and should fail. That, surely, is what Parliamentintended and how most employers and workers would see it. The EAT decision – breaches of contract are caught Not so at the EAT. It allowed Parkins’ appeal and decided there is no reasonto distinguish a legal obligation which arises under an individual’s contractof employment from any other form of legal obligation. The EAT’s only comfort for employers, effectively acknowledging thepossibility of contrived claims from employees not qualified to claim unfairdismissal, was to make it clear that no claim would succeed unless theprincipal reason for the dismissal was a protected disclosure made by theemployee in good faith. The EAT added: “We anticipate that the difficulty for an employee toshow that that was likely to be the reason for his dismissal would be asdifficult a hurdle to surmount in this area as it has shown to be in the pastin other areas.” The issue of whether Mr Parkins was dismissed because he complained (as heargued) or because he refused to take orders (as Sodexho argued) was notresolved; the EAT remitted the issue to a freshly-constituted tribunal. It willbe interesting to see how robust a line that tribunal is able to take. Possible claims from private disputes The EAT’s decision to give a literal and therefore very wide interpretationto ‘legal obligation’ and extend it to breaches of the employment contract is,on the face of it, logical. After all, the employment contract is full of legalobligations. In Parkins, arguably, the nature of the breach of contract fellwithin the spirit of the whistleblowing legislation – a health and safetyobligation which had implications for the rest of the workforce. The problem with the decision arises from the fact the EAT, by its ownadmission, could not define the spirit of the legislation. Perhaps that was theunderlying reason it did not attempt to say which types of legal obligationsowed to employees under their employment contracts fall within the scope of thePIDA. The EAT’s failure to do that means we have no guidance on that issue yet.Meanwhile, employers risk whistleblowing claims arising out of a purely‘private’ dispute which has nothing to do with the wider public interest – forexample, an employee’s entitlement to wages or holiday. Clearly, this is notthe type of malpractice the whistleblowing legislation was intended to cover –in most cases the dispute will be of relevance only to the individual makingthe complaint. Policies and grievance procedures While the Parkins case concerned one particular type of protected disclosure– breach of a legal obligation – the range of qualifying disclosures is farwider. They include the commission of criminal offences, miscarriages ofjustice, the protection of health and safety and the protection of theenvironment. Complaints falling into any of these additional categories shouldbe dealt with under the employer’s whistleblowing policy, which should set outclearly to whom the complaint should be directed and how it will be addressed[see box]. The purpose of a whistleblowing policy is, primarily, to deter anddetect malpractice in the workplace and it should normally be kept separatefrom the normal grievance procedure, which is used to handle individual orgroup grievances. Despite the Parkins case, the grievance procedure will continue to be themore appropriate policy for handling the vast majority of complaints relatingto allegations of breach of contract. The contract of employment or thestatement of terms and conditions should identify the employer’s grievanceprocedure and specify the person to whom a complaint should be made in thefirst instance. Importantly, it should not be contractually binding, otherwiseany failure by the employer to follow it will amount to a breach of contractitself. Whistleblowing: practical steps to takeThe independent charity PublicConcern at Work offers the following useful guidance for employers.– Employers should make it clear that it is safe and acceptablefor workers to raise a concern they may have about misconduct or malpractice inthe organisation.– Where a worker raises a concern about a specifiedmalpractice, every effort should be made to ensure the employer responds (andcan show it has responded), rather than ‘shooting the messenger’.– It is in employers’ own interests to introduce effectivewhistleblowing procedures. This will not only help separate the message fromthe messenger but will also reduce the likelihood that a public disclosure willbe protected under the Act.– Where a protected disclosure has been made, employers shouldtake all reasonable steps to try and ensure that no colleague, manager or otherperson under its control victimises the whistleblower.– Confidentiality clauses in severance agreements andemployment contracts should be reviewed (since any such clause is void if itprecludes a protected disclosure).– Employers should review the terms and conditions in theirarrangements with contractors to ensure that those who work for key contractorsalso have access to the employer’s whistleblowing policy if the concern affectsit. Comments are closed. Related posts:No related photos.