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Potential Public Interest in Whistleblowing Case after Breach of Contract

 

Public interest disclosure were introduced from 25th June 2013, under S.43B (1) of the Employment Rights Act 1996, public interest disclosures had to be “in the public interest” to qualify for protection. In Parkins v Sodexho Ltd the Employment Appeal Tribunal’s (EAT) ruling was reversed due to the ‘in the public interest’ test being added. For Parkins v Sodexho Ltd the definition of a qualifying disclosure concerning a failure to comply with a legal obligation was broad enough to cover a breach of an employee’s own contract of employment.

In the landmark whistleblowing case Chesterton Global v Nurmohamed, Nurmohamed (N) believed Chesterton were purposely miss allocating  between £2 and £3 million of actual costs and liabilities. N had been dismissed which he believed was due to him disclosing in the public interests about the alleged use of completely false profit and loss figures to estimate commissions, transitional payments and profit bonus calculations paid to over 100 managers.

It’s for the ET to consider all of the circumstances pf the particular case, the following four factors should be taken into account:

  • The figures of people in the group whose interests the disclosure served.
  • The nature of the interests affected and the extent to which they are affected by the wrongdoing disclosed.
  • The nature of the wrongdoing disclosed.
  • The persona of the alleged wrongdoer and its ‘community’, i.e. staff, suppliers and clients

In this case, N did have other outside of himself (the other managers) in mind, which resulted in a section of the public would be affected and the public interest test was satisfied. An EAT upheld N’s claim, after the ET also did. The EAT ruled that the key issue was whether the worker believed on an objectively reasonable basis that the disclosure was in the public interest. The court of appeal found the interest in question to be personal in character, this conflicted the facts of the case that made it reasonable to regard the disclosure as being in the public’s interest. Inevitably it was ruled there was dual interest, between personal and public.For example, a disclosure which provided evidence that police officers workforce were being largely reduced might well be in the public interests, as well as in the personal interests of the police themselves, because of the impact on public safety.
However in the same breathe many other cases it could be reasonably ruled for that such a disclosure ultimately was in the public’s’ interest.

 

For this case, it had over 100 people affected by the alleged misconduct, plus there were other features which rendered the disclosure in the public interest. Most vitality the disclosure consisted of allegations of misstatements in the accounts to the sum of £2m to £3m. It impacted numerous people inevitably, there was no mistake of law in the ET’s decision.
This case can be seen as progression and new interpretation on the new statutory test means in whistleblowing legislation. However the ruling still shows that the “in the public’s interest” is broad concept, each cases circumstances must be considered using the four-factor approach.

Plumbing Firm Loses Appeal In Landmark Gig Economy Ruling

In the greatest victory yet for a gig economy tribunal hearing, a plumber has won an employment rights case for a second time despite an appeal by his ex-employer.

Gary Smith worked as a self-employed plumber for the revered London firm Pimlico Plumbers over the course of a six year period. He took the firm to tribunal in 2011 to challenge his official status as a self-employed worker. After winning his case in 2014, Pimlico Plumbers launched an appeal which was finally heard in February 2017 and again saw Mr Smith win.

This marks a major ruling in employment law, as it is the first major undertaken by an employer of the gig economy to be rejected at tribunal. This loss is not a good sign for other businesses hoping to reverse recent tribunal rulings of a similar nature.

The claim brought by Mr Smith challenged legislation deeming him a self-employed contractor rather than a full employee. Although Smith was VAT-registered and paying tax in accordance with self-employed regulations throughout his six years at Pimlico Plumbers, he did not work for any other business during that time. He claimed this was due of a contract agreement that made him “tightly controlled” by the firm, and therefore found it it difficult to seek additional employment.

After Mr Smith suffered a heart attack in 2010 he requested the business reduce his working hours from five days a week to three. Pimlico refused and Mr Smith was allegedly dismissed shortly afterwards because of this.

Pimlico Plumbers founder, Charlie Mullins, disputes the claim, saying that workers are hired on a self-employed basis with a generous fee of £80,000, for which the company in return expect workers to provide their own materials for their daily job duties .

Pimlico Plumbers is one of the most prestigious plumbing businesses in Britain, having acquired a value in the region of £75 million since Mr Mullins, a prominent Tory Party donor, founded the company 45 years ago.

Mr Mullins expressed relief that gig economy law is now being clarified for employers. He claims Pimlico Plumbers has benefited from the change and joked “Like our plumbing, now our contracts are watertight.”

Key businesses of the gig economy like Deliveroo, Uber and City Sprint have been in the spotlight recently in publicised cases launched by employees with concerns over their status as a self-employed worker, and what the expected duties of this should involve.

Each of these businesses has lost at tribunal, resulting in Deliveroo having to pay all self-employed staff the minimum wage, City Sprint needing to pay self-employed workers holiday pay, and Uber no longer being able to class workers as self-employed at all.

Lord Justice Underhill, a Court of Appeal Judge at the Pimlico ruling, believes employers should not accept the result as an indication of forthcoming legislation for the gig economy: “They should be careful about trying to draw any very general conclusions from it” he said.

A team of legal experts has been commissioned by government officials to determine a fair criteria for the expectation of gig economy workers. The investigation will be led by Mathew Taylor, the chief executive of the Royal Society for the Arts.

Issues for the team of analysis will include issues of pay during periods of holiday, sickness and maternity leave, and issues of pension employment and job security. The findings are due for publication later this year.

Inventive Employees and Exceptional Rewards – Court of Appeal Test Case

Companies are entitled to reap the benefits of their employees’ inventiveness – but patent law does require compensation to be paid to those whose ideas make an outstanding contribution to profits. In an important test case, the Court of Appeal analysed the circumstances in which such exceptional rewards are justified.

A professor employed by a global company had invented a blood glucose testing device that, after it was patented, generated benefits worth £24.5 million to his employer. Part of his work in developing the device had been carried out in his own time and it had been produced at almost no cost to the company. He argued that his invention had brought an outstanding benefit to his employer and sought compensation pursuant to Section 40(1) of the Patents Act 1977.

His claim was, however, rejected by a hearing officer appointed by the Comptroller-General of Patents and that ruling was subsequently confirmed by a judge. Amongst other things, the hearing officer noted that the profits generated by the device were dwarfed by the company’s overall multi-billion-pound turnover.

In seeking to re-open his case, the professor pointed to the great disparity between the level of his remuneration and the profits yielded by his invention. No other single patent had achieved an equivalent rate of return for his employer. Had he worked for a smaller company, the outcome might well have been different and his employer had, in effect, been found to be ‘too big to pay’.

The Court accepted that it would be wrong to focus solely on a simple comparison between the benefits generated by the invention and the company’s overall profits. In dismissing the professor’s appeal, however, it found that the hearing officer had taken all relevant matters into account before concluding that the outstanding benefit test was not satisfied in the context of the company’s overall performance.