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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.

Mother Suffered Discrimination after Part-Time Return From Maternity Leave

Many mothers resume work on a part-time basis after having children and employers must be very cautious to ensure that they are not subjected to any unfair detriment. In one case, a woman won the right to substantial compensation after her return to the office was blighted by less favourable treatment.

On returning from maternity leave, the software engineer had been made redundant after her manager reneged on an agreement that she would be permitted to leave at 5:00pm each day to pick up her child from nursery. A new role within the company that she could have applied for as an alternative to redundancy was subject to a requirement that she remain at work after 5:00pm.

After she launched proceedings, an Employment Tribunal (ET) found that she had suffered indirect sex discrimination, harassment and less favourable treatment as a part-time worker. Although the redundancy process was not a sham, the ET also ruled that her dismissal was unfair, having been tainted by discrimination.

In rejecting the company’s appeal against those findings, the Employment Appeal Tribunal could detect no flaw in the ET’s approach. The company’s challenge to a finding of direct sex discrimination – which related to an inappropriate comment allegedly made by a manager on hearing of the woman’s pregnancy – was, however, upheld. The reasoning in support of that finding was deficient and the issue was sent back to the same ET for reconsideration.

Rules May Be Rules but Blanket Policies Are Unwise

Some forms of misconduct may appear so serious that dismissal is the only option. However, one case in which a hospital radiographer was sacked for mishandling confidential patient information showed that blanket policies are rarely a good idea and that room should be left for considering each case on its own facts.

The woman had used confidential information in compiling her defence to a disciplinary charge. The manager who summarily dismissed her took the view that she had shown a complete disregard for the importance of patient confidentiality and that, regardless of any extenuating circumstances ‘a breach is a breach’. Her internal appeal against that decision was subsequently rejected.

In upholding her unfair dismissal claim, an Employment Tribunal (ET) noted that she had felt isolated at the time and was unaware that, by taking steps to defend herself, she was breaching patient confidentiality. By his rigid adherence to the rules, the manager had placed himself in a straitjacket and the appeal procedure had been wholly inadequate.

In rejecting the employer’s challenge to that ruling, the Employment Appeal Tribunal could find no fault in the ET’s conclusion that that the woman’s dismissal fell outside the band of reasonable responses to her misconduct. Other issues in the case, including as to whether the dismissal was also wrongful and whether there had been any contributory fault on the woman’s part, were sent back to the same ET for further consideration.

Whistleblower Finally Wins Case Against HSBC After 13 Years

After thirteen long years a whistleblower has finally prevailed in his case against HSBC banking group. This ruling will lead to a £4 million financial award getting distributed across 6,700 people who previously held credit cards with either HFC Bank or John Lewis Financial Services; both of which became part of HSBC after a merger in 2003.

Solicitor Nicholas Wilson, 59, has been relentless in his goal of pursuing a case against HFC, which he always stated were responsible for mistreating credit card holders who struggle to make payments.

Mr Wilson of Hastings, Easy Sussex always asserted that the HFC’s actions were illegal in regard to dealing with card charges, and although The Financial Conduct Authority (FCA) reviewed his case on a previous occasion, this second hearing ruled that between 2003 and 2009 clients in debts were indeed subjected to an unfair referral in which their debt was increased by 16.4% of the balance amount, which HFC called a “debt collection charge”.

Mr Wilson “lost everything” in his pursuit of justice against HSBC. He lost his job as a solicitor at the firm he worked for, and now repossession of his personal property is underway. He also believes his whistleblowing caused to him being sacked in 2006 by the law firm he worked for. He asserts that major figures of the financial and political worlds “closed ranks” to protect their own interests from scandal.

His case against HSBC began when he worked as a solicitor to investigate whether HFC were unfairly charging customers. His complaint to the Financial Services Authority, the FCA’s predecessor, was rejected as the organisation ruled the issue was outside its authority.

It was only when Mr Wilson later contacted the Office of the Complaints Commissioner with his concerns that the issue was fully addressed. In December 2015 the Commissioner acknowledged the charges and criticised the FCA for showing behaviour of a “negligent” nature that was “bordering on the farcical”.

Under pressure from the Office of the Complaints, the FCA was forced to conduct a deeper enquiry into the HFC’s actions and found that approximately 6,700 HFC customers had paid all or some of the debt collection fee they were unfairly charged for, and were therefore eligible for protection

The FCA has released information of how HSBC has made voluntary plans for a compensation scheme of £4m to be distributed across those customers who have suffered financially as a result of paying “unreasonable” debt collection charges imposed by the bank’s subsidiaries.

This miscalculation has resulted in approximately 350 accounts being overcharged, leading HSBC to announce that “customers will receive redress where they paid more than the actual and necessary cost of collecting their debt.”

HSBC has also promised to credit these customers with an additional 8% interest. A statement has been released:

This is a historical issue, dating back to the period between 2003 and 2009. We have revisited the debt collection charge and, as a result, a small number of HFC and John Lewis Financial Services Limited customers may be due a refund. We will be directly contacting these customers shortly.”

For Mr Wilson, this win does not fully reflect the inaccuracy carried of HFC charges. He believes hundreds of thousands of other customers have also been overcharged, although this has been denied outright by both HSBC and government watchdogs.

Following the tribunal hearing Mr Wilson made the following statement:

After all the abuse and derision about my HSBC allegations, it feels great to be vindicated. But the truth about HSBC is still not acknowledged. There are a great many more than the alleged 6,700 customers. When I left my firm there were 80,000. And that’s just the one firm.”

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.

Landmark Employment Rights Win for Bicycle Courier

In a case that could have a considerable impact upon the UK gig economy, a London tribunal ruled that Maggie Dewhurst, who works as a courier at the logistics firm City Sprint, should be granted the same rights as other workers despite her status as a self-employed worker.

To receive the same treatment as a fully employed worker gives Ms Dewhurst certain employment rights otherwise denied to self-employed staff, such as sick pay, holiday and and the right to UK national living wage.

The tribunal decision largely relates to a complaint Ms Dewhurst made in regard to pay issues. A statement issued by the tribunal acknowledged that City Sprint “unlawfully failed to pay her for two days’ holiday”, despite the two years of dedicated service she gave to the company.

Reacting to the ruling, City Sprint expressed “disappointment” and will now be reviewing options for an appeal. A spokesman for the business commented:

“This case has demonstrated that there is still widespread confusion regarding this area of law, which is why we are calling on the government to provide better support and help for businesses across the UK who could be similarly affected.”

This individual case could have a large impact upon all companies that are part of the so-called gig economy. This is an area of customer focused UK employment that consists of companies hiring self-employed workers using contracts that limit their employment rights so that they are given working without regular shift patterns unlike full-time workers.

A recent tribunal ruling much like the City Sprint case involves another popular courier business; the taxi-hailing app Uber. This hearing saw legal action being taken by Uber employees and resulted in the business having to provide self-employed drivers with the same benefits that ordinary workers benefit from.

Although Uber intends to appeal this ruling, there are several other tribunal cases currently being heard against other courier businesses relating to claims of unfair treatment against self-employed workers which might also challenge conduct of the gig economy. The other businesses at the centre of these cases include Excel, Addison Lee and E-Courier.

Ms Dewhurst’s case was ruled as one of unfair treatment due to the extent of the workplace expectations placed upon her by City Sprint, which goes far beyond self-employed duties. She stated the following regarding workers of her position:

“we spend all day being told what to do, when to do it and how to do it. We’re under their control. […] that’s why we deserve basic employment rights like the national minimum wage. I’m delighted that the tribunal ruled in our favour as it has set a legal and moral precedent which others can use to make similar claims.”

Some self-employed workers believe flexible working contracts deny them basic employment rights in a job market that leaves them little to no other employment option.

Employers are unsurprisingly less critical of the use of such contracts, which they often defend on the grounds that they are beneficial to workers due to the flexible working hours offered, which in can potentially let workers conveniently balance personal responsibilities with work.

Many workers and employers both feel that current employment laws need to be edited so that all contracts make clear the law for self-employed workers, thus protecting everyone in a manner that is clear for both parties.

The UK government is currently awaiting the results of an independent review into the modern practices of self-employed workers. It is due for publication in spring 2017.

 

How Will Employment Law Change in 2017?

Each year the employment law world experiences a number of changes that will ultimately affect the rulings made by many tribunal hearings.

The past twelve months saw the sanction of a number of government established changes take that will come into law during 2017. Both employers and employees should understand what these changes mean for them. Read on for a number of the most prominent changes that will shape 2017.

Increase of Minimum Wage
From April 2017, the British National Minimum Wage will rise for workers aged 25 and over. The new rate will be set at £7.50 per hour; a 30p increase.

The government has long expressed support for working towards a minimum wage of £9 per hour for all workers aged over 25 by the year 2020.

Although reaching this goal appears to be increasing, the current UK rate is still far below the sum that analysts believe is a fair level of pay when measured against the cost of living in Britain, which is an estimated £8.45 per hour, with £9.75 for London workers.

There will also be a pay increase for workers below 25, as both the 18-20 and 20-24 age groups will see increases of £5.60 and £7.05 respectively.

Foreign Staff Employment
From April 2017, employers who rely on the contribution of workers who hold a Tier 2 visa will now be required to pay a £1,000 employment fee for each worker in accordance with the introduction of the new immigration skills charge. However, charity organisations and smaller businesses will only be required to pay the lower fee of £364 each.

This change coincides with new laws that require Tier 2 workers planning to apply for jobs in Britain as an ‘experienced worker’ to be earning a salary with a minimum of £30,000 per annum. Although some workers employed in the education and health sectors may be exempt from this rate of earning.

Mandatory Apprenticeship Funding
The upcoming year will see large companies need to fund apprenticeship schemes across their business; a move that is hoped to raise at least £3 billion for the UK economy; of which the government will contribute an additional 10% per month.

The tax for this apprenticeship scheme will be set at a rate equivalent to 0.5% of each company’s overall salary bill. This tax, sometimes referred to as the ‘payroll tax’, applies to companies with an annual salary roll in excess of £3 million. This salary cap prevents smaller businesses from suffering against the financial costs involved.

The costs incurred must be also be used to support existing apprenticeships and job training opportunities to allow workers aged 16 and over then opportunity to learn whilst working, with the goal of them gaining a nationally recognised qualification relevant to the business’s industry.

Employers can track their levy sums via a custom account created by the Digital Apprenticeship Service, and they will have the option of an allowance of £15,000 to assist with any difficulties incurred by the cost of the new scheme which begins in May 2017. Businesses that have only recently begun to trade may qualify for additional government assistance.

Gender Pay Gap Report to be Issued

After years of planning, businesses in the public sector with a pay-roll of more than 250 employees will finally have to reveal details of any pay gap between men and women that may exist within the company.

Private and voluntary sectors will be obligated to reveal this information at a later date, with a deadline for the publication of these reports expected in 2018.

Additionally, new rules will be set for stipulating how employers are allowed to release key information regarding the salaries and bonus payments for male and female workers.

Tax-Free Childcare 
The long-awaited tax-free childcare scheme will at last be implemented in 2017. This will allow working families with children aged under twelve to receive 20% support for overall childcare costs, with the maximum amount for an eligible claim set at £2,000 per annum. Although the financial income of a home might be a factor in deciding what the individual minimum and maximum entitlements should be for that family.

Families with disabled children will see the maximum age for their children to receive support raised to seventeen.

The current childcare voucher scheme, supported via employers, will continue to be available for new applicants until April 2018. Families currently relying on this scheme can continue to do so as long as their employer maintains the policy, or until the new tax-free childcare system becomes mandatory.

Salary Sacrifice 
Salary sacrifice benefits are to change from April 2017 as outlined in the 2016 Autumn Statement. This means that most salary sacrifice schemes will soon no longer have permission to avoid the costs required by income taxes, although tax arrangements arranged before April 2017 are to stay protected until April 2018.

Trade Union Balloting 
During 2017 new balloting rules will begin under rules outlined by the Trade Union Act 2016. This includes strike action only being granted if the majority of workers vote in favour of it. A 50% minimum turnout of workers is required.