Charity Trustees could be protected for whistleblowing, Employment Tribunal decision suggests

Written by Marie Philippe, Associate in our Charities team, and Aimee Boundford, Solicitor in our Employment department.

Summary of the case

A recent employment tribunal case, MacLennan v British Psychological Society, suggests the protection for whistleblowing extends to charity trustees. In this case, Dr MacLennan was a member of British Psychological Society charity and was elected as president-elect of the charity. Following his election, he made numerous protected disclosures about the charity to the Charity Commission. The role of President-elect was voluntary but required significant commitments including attendance at the AGM, six board meetings and other events during the year. The charity’s governing document allowed the president to claim limited compensation for loss of earnings.

Relations between Dr MacLennan and the charity deteriorated and, following an investigation, he was expelled from the membership which resulted in his removal as trustee and president-elect. Dr MacLennan complained to the Employment Tribunal that these actions amounted to detriment resulting from the protected disclosures which he had made, contrary to the protection for whistleblowers contained in section 47B of the Employment Rights Act 1996 (ERA 1996). The Employment Tribunal dismissed Dr MacLennan’s claim on the basis he was a volunteer. On appeal to the Employment Appeals Tribunal, the judge ruled that the Employment Tribunal had given too much weight to the fact that Mr MacLennan was an unpaid volunteer. The fact that charity trustees often hold positions of significant responsibility gives them an “occupational status” similar to workers. The Employment Appeals Tribunal did not reach a final conclusion on the matter, but instead remitted the decision to the Employment Tribunal to do so. We therefore await a final decision on the question of whether charity trustees are protected by whistleblowing legislation.

What is whistleblowing?

In the employment context, whistleblowing is the act of reporting information relating to a wrongdoing, ranging from criminal offences to environmental hazards, in the workplace. This is known as making a “protected disclosure”. There are various requirements that must be satisfied in order for a disclosure to be protected (as set out below), thus enabling employees, and in some circumstances workers, to bring an employment tribunal claim.

What protection do whistleblowers have and who is protected?

Whistleblowers will be offered the following protection under the ERA 1996, depending on whether they are an employee or a worker.

Protection from dismissal

Employees will be protected from dismissal (including constructive dismissal) if the reason or principal reason for the employee’s dismissal is because they have made a protected disclosure. In this case, their dismissal will be considered “automatically unfair”.

There is no qualifying minimum period of service for an automatic unfair dismissal claim and there is no upper limit on compensation in respect of the compensatory award.

Protection from detriment

Employees and workers are protected from being subjected to a detriment because they have made a protected disclosure. Such detriment may, for example, include bullying, harassment disciplinary action, loss of work or pay or damage to career prospects.

The concept of a “worker” in this context is broader than the usual definition and includes, among others, agency workers, freelance workers, seconded workers and certain job applicants in the NHS.

As demonstrated by the Employment Appeal Tribunal’s decision in the case of MacLennan, a charity trustee can qualify for protection under whistleblowing legislation. Charity trustees are volunteers and can only be paid for their services in limited circumstances, so they are unlikely to meet any remuneration requirements to qualify as a worker. The EAT in this case, however, argued that  the definition of a “worker” as outlined in section 230(3)(b) ERA 1996 should be widened to take account of an individual’s rights under Article 14 (the right not to be discriminated against on any grounds) and Article 10 (freedom of expression) of the European Convention on Human Rights, and a “broad-brush” approach should be adopted in these circumstances. The EAT stated that a charity trustee should be able to bring a whistleblowing detriment claim as a result of these human rights.

What constitutes a protected disclosure?

In order to qualify for the above-mentioned protection, a whistleblower must have done the following.

Made a qualifying disclosure

The whistleblower must make a disclosure of information (which may, for example, include disclosing information which is already known by the person to whom they are disclosing the information) which they reasonably believe shows that one or more of the following has occurred, is occurring or is likely to occur:

• A criminal offence
• Breach of a legal obligation
• Miscarriage of justice
• Danger to the health and safety of an individual
• Damage to the environment
• Deliberate concealment of information regarding any of the above

The disclosure may be made verbally or in writing, although it is advisable that there is a written record of the disclosure being made which details the information that is disclosed.

Further, the individual making the disclosure must have a reasonable belief that the information disclosed is correct and that the disclosure is in the public interest. However, since the enactment of the Enterprise and Regulatory Reform Act 2013, the disclosure need not be made in good faith

The qualifying disclosure is made to one of the following categories of people

In order for a qualifying disclosure to be deemed a “protected disclosure” it must have been made to one of the following people:

1. An employer.
   The employer should follow their whistleblowing policy if they have one. In the case of a charity, this would be a report to the charity trustees. An employer’s whistleblowing policy may authorise disclosure to a third party, for example an external whistleblowing hotline, in which case if the individual makes the disclosure to that third party they will be treated as having made the disclosure to their employer.
2. A person responsible for the relevant failure.
   Disclosure to a responsible person will only be a protected disclosure if the individual reasonably believes that the wrongdoing relates solely or mainly to either the conduct of that person, or to a matter which is their legal responsibility and not that of the employer.
3. Legal advisers.
4. Government ministers.
   A disclosure to a Minister will be a protected disclosure if the individual is employed by an individual or body appointed under status or statutory instrument, including, for example, an NHS body.
5. A person prescribed by an order made by the Secretary of State.
   There is a list of “prescribed persons”, including the Charity Commission, HMRC, the Financial Conduct Authority (FCA) and the Health and Safety Executive (HSE), to whom workers can make disclosures. However, the worker must reasonably believe that the wrongdoing falls within the remit of the prescribed person in question and the information disclosed and any allegation are substantially true.
   Submitting a Serious Incident Report to the Charity Commission making a qualified disclosure would therefore be a disclosure to a prescribed person.
6. A person who is not covered by the above (wider disclosure).
   A disclosure can still be deemed a protected disclosure if made to another person, provided specific conditions are met.

Consequences of dismissal or detriment following a protected disclosure

An employee who is dismissed or an individual who suffers detriment as a result of making a protected disclosure can bring a claim in the employment tribunal. The most frequent remedy for this type of claim is financial compensation but, in certain circumstances, reinstatement or reengagement could also be ordered. Employers should note that there is no upper limit on the amount of compensation that can be awarded in unfair dismissal or detriment claims under whistleblowing legislation.

How will this case affect charities?

Although we are still waiting for a final decision from the Employment Tribunal, the MacLennan case is significant as it offers charity trustees the same protection as employees and workers when making protected disclosures. Charity trustees are uniquely positioned within charities to access a wide range of information which could lead to a protected disclosure being required. It is also in the public interest for wrongdoing within charities to be reported and investigated given the position of trust charities hold in society.

Charities are expected to report serious incidents to the Charity Commission. As the Commission is on the list of prescribed persons, certain disclosures made in a Serious Incident Report would be ‘protected disclosures’ under the whistleblowing rules, for example fraud, criminal activity or harm to the charity’s staff or beneficiaries including safeguarding issues.  This case should encourage trustees to speak out about wrongdoing within their charity with the knowledge that it appears likely that they cannot be removed from their role as a result of this disclosure.

Charities may see an increase in the number of protected disclosures being made by trustees. Trustees should ensure that there are appropriate policy and processes in place to investigate trustee whistleblowing allegations and that they have a comprehensive whistleblowing policy which covers disclosures by trustees.

It will be interesting to see whether this protection could extend more generally to volunteers given that they usually have lesser responsibilities than trustees and whether the Employment Tribunal will consider reinstatement of trustees, a remedy which is rarely applies to workers.