Public Accounting Issues Considered - It's a Serious Concern Indeed

Introduction
In the first three years of the Public Interest Disclosure Act,

• Employees lodged over 1200 claims alleging victimisation for whistleblowing.
• Two-thirds of these claims were settled or withdrawn without any public hearing.
• At full hearings, 54% of claimants lost, 23% won under other employment or discrimination law and 23% won under PIDA.
• The highest award made by a tribunal under PIDA was £805,000, the lowest £1000 and the average £107,117.

Tribunals reached full decisions in 152 cases. The 63 case summaries in this Report look at all the notable decisions that focused on the Public Interest Disclosure Act. On their facts, these summaries provide a telling insight into the modern workplace, labour relations and employment law. The whistleblowing concerns range from serious crimes and cover-ups to the inconsequential; the victimisation complained of covers both the outrageous and the trivial; and the claimants include both the publicly spirited and time wasters. Above all, the cases show that the Act is helping to tackle serious wrongdoing at work by providing a practical alternative to silence. The summaries also provide an accurate picture of how the Act’s legal principles are applied by tribunals and the higher courts. In this regard, they -

• confirm that whistleblowers do not lose statutory protection simply because they are mistaken;
• show the good faith test being applied in a handful of cases to bar, what on the facts appear, plainly unmeritorious claimants;
• provide examples of disclosures to the media being protected; and
• demonstrate that causation is ultimately a matter of fact, not law.

Extrapolating from the 152 tribunal decisions to the 1200 claims, £30 million¹ was paid out under the Public Interest Disclosure Act in its first three years. By comparison in 2002, Crown Courts dealt with cases involving frauds totalling £717 million, while the public inquiry into child deaths at the Bristol Royal Infirmary cost the taxpayer £14 million.
1. The actual figure may have been higher, as claims that settle are more likely to be stronger than those that go to tribunal. The strength of the claim may also impact on the size of settlement, a point borne out by reports from lawyers that there have been several seven figure settlements.
Explanatory note
The emboldened titles (e.g Aspinall v MSI Mech Forge) represent decisions of the higher courts. These courts are the Court of Appeal (CA), Scotland’s Court of Session (CS) and the Employment Appeal Tribunal (EAT).
Most of the decisions cited below are from Employment Tribunals (ET). Although they are not definitive statements of the law, they do have a persuasive effect. Many of the ET decisions below consider an important or finer point under the Public Interest Disclosure Act. We hope these summaries will be helpful not just to lawyers but to any interested reader who wants to understand how the Act is working in practice. Copies of these decisions are available for £16.50 (exc. VAT) from Public Concern at Work.
A v B & C (2002)
Detriment: Failure to investigate a complaint of sexual assault was a detriment justifying resignation.
Ms A was the personal assistant to the Managing Director (MD) of B company. The MD took Ms A on a business trip to New York and sexually assaulted her when she was “drunk and insensible”. Ms A was too ill to work for 13 months, during which time police in the UK and US investigated the matter. When Ms A was ready to return, she wrote to the Financial Director saying what had occurred and pointed to the ongoing risk to B company’s female staff. She said she would not work for the MD, whom she thought should be investigated by the company’s Board and sacked. After 3 months there had been no news of any investigation or a considered response so Ms A resigned. ET held that Ms A’s letter was a protected disclosure, and that B’s failure to investigate was a detriment, so entitling Ms A to resign. Ms A was awarded £79,308.
A v X (2001)
Damages: Aggravated damages award where as part of an attempt to keep complaints of indecent assault secret, the manager who had reported the complaints was subjected to a detriment justifying resignation.
Mr A was a branch manager for a major employer (X). Two of his female staff reported to him that a senior manager (SM) had subjected them to indecent assaults and sexual harassment. Mr A passed these concerns to the MD who initiated an inquiry, which led to SM’s suspension. ET found that his employers had tried to keep the whole affair secret by threatening Mr A and the two victims with dismissal and slander actions if they mentioned the incidents to anyone. When an employee asked Mr A what was happening to SM, Mr A said he might not be coming back. The employers viewed this as a breach of confidence and disciplined Mr A. SM resigned and after the disciplinary hearing Mr A was given a written warning. He then went off sick with stress and later resigned. ET stated that instead of complimenting Mr A for his proper behaviour, the employer had subjected him to a detriment. Mr A was awarded £140,000, of which £5,000 was aggravated damages because the employer’s behaviour was ‘totally inappropriate’. [The ET case revived the police enquiry and SM, who had left X to join the police service in a civilian role, was prosecuted for the assaults. He was convicted and jailed for 18 months for what the judge called his ‘outrageous sex assaults’].