Whistleblowing Claim Failed as Legal Obligation Not Identified

A tribunal had been wrong to find that an employee had made a protected disclosure as it had not identified any legal obligation, as opposed to guidance, which the employee believed the employer had breached.

Speedread

A tribunal had been wrong to find that an employee had made a protected disclosure as it had not identified any legal obligation, as opposed to guidance, which the employee believed the employer had breached. Other than in cases where the legal obligation said to have been breached was obvious, the employment tribunal must identify the legal obligation, its source and how it was breached before moving on to consider whether the employee reasonably believed that it had been breached (and that the disclosure was in the public interest).

Facts

In Korshunova v Eiger Securities, Ms Korshunova worked as a sales executive for Eiger, a broking business. Eiger had a practice of sharing passwords for computers and for Bloomberg Chat, which it used to liaise with traders at its client banks. Mr Ashton was the managing director and compliance officer and he had a habit of using other employees’ computers whilst they were not at their desk. On 14 May 2014, Miss Korshunova challenged Mr Ashton for using her computer screen without identifying himself to clients. She told him:

"It is wrong for you to log in under my name when I am not in the office and trade under my name without making it clear that it is not me who is making the trade and identifying that it is you. Yes, and my clients do not like that you talk to them pretending it is me when I am away for lunch."

She changed her password. In response, Mr Ashton told her that changing her password without notifying him would be gross misconduct.

Following two trading errors, she was invited to a disciplinary hearing for poor performance. Charges of misconduct were added after she switched off her computer and changed the password. She was dismissed for gross misconduct.

She claimed that her dismissal was automatically unfair on whistleblowing grounds, arguing that she had made a protected disclosure to Mr Ashton on 14 May 2014. She had disclosed information which she reasonably believed tended to show a breach of a legal obligation by Mr Ashton and the disclosure was in the public interest.

The employment tribunal upheld her claim. It found that Miss Korshunova genuinely believed Mr Ashton had breached industry regulations and a legal obligation to be transparent with clients about who they were communicating with.

Eiger appealed, arguing that Miss Korshunova had not disclosed any information and had instead simply made an allegation of wrongdoing. It also argued that the tribunal had failed to consider whether she reasonably believed that there had been breach of a legal obligation, as opposed to industry guidance or rules.

Decision

The Employment Appeal Tribunal upheld her appeal. It rejected her first argument, finding that whilst the first sentence may have been no more than an allegation of wrongdoing, the second sentence contained information. It informed Mr Ashton that her clients did not like his behaviour and this was new information to him.

However, as this was not a case where the legal obligation said to have been breached was obvious, the tribunal should have decided what legal obligation Miss Korshunova believed Mr Ashton had breached. It should have identified the source of the legal obligation and how Mr Ashton had failed to comply with it. The identification of the obligation did not need to be detailed or precise, but had to be more than a belief that certain actions were wrong. Identification of the legal obligation was a necessary step before determining whether she reasonably believed that the obligation had been breached.

Implications

Whistleblowing cases tend to be complex and an employee has to overcome a number of hurdles if they are to succeed in a claim. Many case fall at the first hurdle as the employee is unable to show that they have disclosed information, rather than simply made an allegation or set out their position. This case makes it clear that other than in cases where there is an obvious cases, employees will have to identify the legal obligation said to have been breached, rather than simply asserting that behaviour was wrong or in breach of industry guidance. Only then will the employment tribunal will move on to consider whether the employee’s belief that a legal obligation had been breached was reasonable.