Veitch Penny LLP - Exeter | Crediton, Devon

Case

Babula v Waltham Forest College
Court of Appeal - 7 March 2007

Issues

1. Unfair dismissal
2. Whistleblowing
3. “Qualifying disclosure”

Facts

Mr Babula was employed by the College as a lecturer. He resigned from his position and submitted a complaint for constructive unfair dismissal alleging that the reason for his resignation was that he had made a protected disclosure within the terms of Section 43B of the Employment Rights Act 1996, known as “whistleblowing”. During his employment he had become concerned that his predecessor had made remarks which had incited racial hatred. He reported his concerns to his employer but the college took no action. As a consequence, he reported the matter to the police. He subsequently alleged that the treatment he had received during his employment left him with no choice but to resign.

Section 43B of the Employment Rights Act provides:

“(1) In this Part A “qualifying disclosure” means any disclosure of information, which in the reasonable belief of the worker making the disclosure, tends to show one or more of the following:
(a) that a criminal offence has been committed, is being committed, or is likely to be committed,
(b) that a person has failed, is failing or is likely to fail to comply with any legal obligation to which he is subject….”

At first instance, the tribunal struck out his claim taking the view that it was obliged to follow the judgment in the case of Kraus v Penna. In their view this judgment prevented an employee from protection if their disclosure turned out to be wrong. To qualify as a disclosure there needed to be a criminal offence or some other legal obligation which was capable of breach. The Tribunal found that the comments made by Mr Babula’s predecessor were incitement to religious hatred, not racial hatred, under Section 1(a). At the time of the complaint there was no such offence. Furthermore, there was no legal obligation on the college under Section 1(b) because their equal opportunities policy did not mention religious discrimination.

Mr Babula appealed the matter to the Employment Appeal Tribunal (EAT) which declined, for policy reasons, to hold that his case had been wrongly decided and dismissed his appeal. Mr Babula’s subsequent appeal was referred to the Court of Appeal.

Decision

The Court of Appeal allowed Mr Babula’s appeal. The Court of Appeal found that a belief may be reasonably held and still be wrong. If a whistleblower genuinely and reasonably believed that a criminal offence had been committed, was being committed or likely to be committed, then the employee should be protected even if that belief turned out to be wrong. Whilst Kraus v Penna had been correctly decided on its facts, the EAT’s interpretation of Section 43B was not correct and should not be followed. In the Court of Appeal’s view, Section 43B used the phrase “tends to show” rather than “shows” so there was nothing in the section that required the whistleblower to be right. The purpose of the statute was to encourage responsible whistleblowing by employees, so to expect employees to have a sufficient knowledge in order to make a decision whether or not the facts were capable of being a qualifying disclosure was unrealistic.

The matter would be remitted to a fresh Tribunal.

Comments

This Judgment overturns the ruling in Kraus v Penna which placed a heavy burden on the whistleblower to demonstrate whether or not the employer was under a legal obligation. This case strikes a better balance by providing protection for whistleblowers but also for employers by requiring that the employee act in good faith.

This case also endorsed the approach in Denton v University of Surrey which stated that a “reasonable belief” had to be based on information rather than rumour or opinion. There should be no ulterior motive in making the disclosure.

Rachel Billen - Associate Solicitor, Commercial Department at Veitch Penny.
Tel: 01392 278381, Fax: 01392 410247, Email: This e-mail address is being protected from spambots. You need JavaScript enabled to view it

This Employment Law Update does not constitute legal or other professional advice and should not be relied on as such. You should take specific advice regarding your circumstances before taking any action based on the information contained within this Update.