Employment Law Cases

Chase v Northern Housing Consortium Ltd

Disclosures made to an investigating auditor appointed by the employer were protected under whistleblowing legislation.

Law

As is well known by now, if a qualifying disclosure is made to the worker’s employer, it will be a protected disclosure for whistleblowing purposes. However, less well known, is that under s. 43C(2) of the Employment Rights Act 1996, disclosures by workers made under a procedure ‘authorised’ by the employer are treated as made to the employer, and also capable of being protected disclosures.

Background

Mrs Chase worked as procurement director for NHC (a publicly funded not-for-profit). From 2016-2018 she made multiple disclosures to NHC. From 2020, she made a series of disclosures about potential fraud. She was dissatisfied with NHC’s response and felt that her concerns were being ignored. In 2020, an external auditor was appointed to investigate NHC’s compliance with procurement and contract rules. Mrs Chase made additional disclosures to that auditor. The relationship between Mrs Chase and NHC further deteriorated and in March 2021 she resigned.

Mrs Chase brought several tribunal claims, among them detriment on the grounds of having made protected disclosures. The tribunal held that the disclosure made to the external auditor was not a qualifying disclosure because the auditor had ‘no responsibility’ within NCH. Mrs Chase appealed.

EAT decision

The appeal was upheld and the issue sent back to a different tribunal to be looked at again.

The tribunal had erred in finding the disclosure to the auditor was not protected because the auditor was external to NCH and had no responsibility to it.

An employer did not have to sanction the making of disclosures to the auditor for it to be ‘authorised’. In deciding whether a disclosure was protected by virtue of s.43C(2), a tribunal should determine whether the procedure in question was one which either expressly or impliedly could be expected to be used by workers to raise protected disclosures.

Here, given Mrs Chase’s original concerns were that alleged misconduct had been ignored or downplayed by NCH and that insufficient measures had been taken to prevent the repetition of similar events, it was not only foreseeable but highly likely that she and maybe others would not only repeat the previous disclosures to the investigator but also provide new information revealing related concerns or evidence of continuing issues.

Comment

There has been little case law on s. 43C(2) - the assumption being that it was aimed at whistleblowing hotlines.

This decision provides helpful guidance on the application of s. 43C(2), and when a disclosure made to an individual independent of the employer will be treated as having been made to the employer. Protection can extend beyond general whistleblowing mechanisms - such as employer-backed hotlines - and can cover one-off appointments of external investigators.