In Eiger Securities v Korshunova, the EAT held that the Tribunal had erred in finding that the Claimant reasonably believed her employer had breached a legal obligation for the purposes of the protected disclosure test.
The correct approach for the Tribunal would have been to identify the legal obligation relied upon by the Claimant. In order to satisfy the test it was not necessary for the Claimant to be able to point with precision to a specific obligation, but there had to be more than a belief that the employer's actions were generally wrong.
The Employment Rights Act 1996 prohibits employers from subjecting workers/employees to detriment as a result of them making a protected disclosure.
In order to be "protected" for the above purposes, a disclosure must (among other things):
- convey facts/information and not consist purely of allegations; and
- suggest (in the reasonable belief of the worker) that the employer has committed one of six types of wrongdoing.
Case law suggests that, unless it is obvious which legal obligation is allegedly breached, the worker/employee must identify a particular obligation which should be capable of verification.
The Claimant worked for a broking business, Eiger Securities LLP (Company) as a sales executive. She was dismissed for gross misconduct on 25 July 2014.
The Claimant and her colleagues frequently used a tool called Bloomberg Chat to communicate with its clients. The Managing Director of the Company (A) used the Claimant's login details to "chat" with the Claimant's clients using her computer screen, without explaining to clients that he was doing so.
The Claimant discovered this and told A that: (i) it was wrong for him to log in under her name when she was not in the office and to trade using his login details without identifying himself to clients; and (ii) clients disliked A pretending to be the Claimant when she was away from her desk (together, the Disclosures). However, A asked IT to unlock the Claimant's computer on a number of occasions and notified her that changing her login details without telling him would be gross misconduct.
Around two months later, three of the Claimant's clients were reallocated to other brokers. She was also suspended due to two unrelated trading errors and invited to a disciplinary hearing. She switched off her computer before leaving work. She did not attend the disciplinary hearing and was dismissed for the trading errors and for gross misconduct for her insubordination in switching off her computer without notifying A.
The Claimant brought claims in respect of her dismissal and the detriment she had suffered when her clients were reallocated. She alleged that both resulted from the Disclosures.
The Tribunal found that the Disclosures were protected disclosures, because:
- the Claimant had genuinely thought that the Company was under an obligation (which she believed must be a legal obligation) to be transparent with its clients about who was conducting communications with them; and
- she believed A's actions to be in breach of the above obligation.
It also found that the Company had reallocated the Claimant's clients as a direct result of the Disclosures.
The Company appealed, arguing that the Tribunal had not properly addressed the question of whether the Claimant reasonably believed a legal obligation had been breached. It also argued that the Disclosures were pure allegations and did not disclose information, and that the Claimant had not suffered a detriment.
The EAT held that the Tribunal ought to have determined whether the Claimant reasonably believed that the Company was in breach of a particular legal obligation. It had accepted that the Claimant reasonably believed it must be in breach of a legal obligation because she thought there must be a legal obligation on it not to mislead its clients. However, it was not immediately obvious from the evidence what this legal obligation was. The Tribunal ought to have gone one step further and identified a particular legal obligation in legislation or industry guidance, in order to then establish reasonableness of belief.
The EAT overturned the finding that the Disclosures had led to the alleged detriment. Rather the alleged detriment was a result of the Claimant's conduct, which amounted to insubordination.
This case is a helpful reminder that in order to demonstrate a reasonable belief in the breach of a legal obligation Claimants must do more than simply believe the employer's actions are wrong. Protected disclosures must be made in such a way as to allow a Tribunal to identify a specific legal obligation. This may scupper litigants in person who do not have nuanced knowledge of case law and may well not take this principle into account when pleading their cases. Respondents should, therefore, ensure that this requirement is considered when drafting their defence.