Source of the breach
Labour & European Law Review Weekly Issue 505 01 February 2017
If a worker “blows the whistle” they have to believe that it was in the public interest and that it “tends to show” a failure to comply with a legal obligation. In Eiger Securities LLP v Korshunova, the Employment Appeal Tribunal (EAT) held that claimants have to show more than just a belief that there has been a breach of a legal obligation.
Eiger Securities, a financial broking firm, had a practice of allowing brokers to share passwords in relation to its computers and a tool called Bloomberg IB chat. In April 2014, Ms Korshunova noticed that her username and password were being used by the managing director, Mr Ashton. On May 14, she asked him to stop logging in under her name without introducing himself to the traders he was talking to. She then changed her password but when she received a text message from him warning her that her action constituted gross misconduct, she told him what it was.
After making two trading errors in July, she was asked to attend a disciplinary hearing to discuss “failure to follow instructions and poor performance”. She refused to attend and was suspended on 21 July. As a result, she turned off her screen and left the office. She was then asked to attend another disciplinary meeting to discuss the additional charge of changing her password without authorisation.
On 24 July she was dismissed for insubordination. She claimed automatic unfair dismissal as a result of making a protected disclosure.
Section 43A of the Employment Rights Act 1996 states that a qualifying disclosure is any disclosure of information which “in the reasonable belief of the worker making the disclosure, is made in the public interest and tends to show … that a person has failed to comply with a legal obligation to which they are subject”.
The tribunal held that Ms Korshunova had made a qualifying disclosure which she reasonably believed was in the public interest and which she believed was contrary to the legal obligation on the business not to mislead people about who was carrying out trades.
it was unlikely that Ms Korshunova would have been dismissed for making the two trading errors in July, had she not also made the disclosure. Although it agreed that by switching off the computer on 21 July she had refused to obey a management instruction, it was again highly unlikely that she would have been dismissed for that one misdemeanour.
It therefore held that Ms Korshunova had made a protected disclosure on 14 May and that her dismissal was mainly due to the fact that she disagreed with the practice of sharing passwords and traders not identifying themselves.
Although the EAT agreed with the tribunal that Ms Korshunova had made a disclosure to Mr Ashton on 14 May, it held that it was not a qualifying disclosure as there was no legal obligation on anyone using a Bloomberg terminal to identify themselves.
If a claimant argues that there has been a breach of a legal obligation, the EAT held that tribunals need to identify the source of the obligation and how the person had failed to comply with it. This did not have to be detailed or precise, but claimants had to show more than just a belief that certain actions were wrong. “Actions may be considered to be wrong because they are immoral, undesirable or in breach of guidance without being in breach of a legal obligation”.
The EAT therefore upheld the appeal.
This case is further reminder that where a “whistleblowing” claim based upon a breach of a legal obligation is made, it will usually be necessary to identify the particular legal obligation that has been breached. In this case a breach of industry guidance or rules did not mean that a legal obligation had also been breached.