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Court of Appeal clarifies scope of whistleblowing protection

The Court of Appeal has recently clarified the scope of whistleblowing protection provided by Part IVA of the Employment Rights Act (ERA) 1996 in Day v Health Education England & others [2017] EWCA Civ 329.

Whistleblowing protection is afforded to employees and workers, and an extended definition of worker set out under section 43K ERA 1996 covers persons who perform work but do not fall within the general concept of worker found in section 230(3) ERA 1996. This includes individuals supplied by an intermediary, provided the terms of their engagement are substantially determined by the end-user and/or intermediary. Accordingly, protection is provided to workers in multi-party relationships, including agency workers and individuals who contract with employment businesses to perform work via personal service companies.

Background to the Day case

In Day, a junior doctor was placed by Health Education England (HEE), a national training body, into a fixed-term training post with Lewisham and Greenwich NHS Trust (the Trust). While the Trust had day to day control of the doctor’s work, HEE continued to review his training progress and pay a sizeable proportion of his salary. The doctor brought claims against the Trust and HEE after making protected disclosures to both. HEE sought to strike out the whistleblowing claim on grounds that it could not be regarded as an employer. The doctor argued that HEE had acted like an employment agency, placing junior doctors with Trusts.

The Employment Tribunal (ET) struck out the doctor’s claims, holding that HEE was not the body which substantially determined the terms of his engagement. The doctor appealed to the Employment Appeal Tribunal (EAT), which dismissed the appeal. In doing so, Langstaff J (Past President) held that the doctor could not be a worker as against HEE as he was an employee of the Trust and therefore covered by the section 230(3) carve-out. The doctor appealed on grounds that:

  • He was not precluded from having worker status as against HEE because he was an employee of the Trust; and
  • It was feasible that both HEE and the Trust determined the terms of his engagement.

Public Concern at Work intervened in the appeal.

Court of Appeal decision

The Court of Appeal upheld the doctor’s appeal. In respect of the first ground of appeal, Elias LJ (delivering the judgment with which the rest of the court agreed) held that the doctor could be a worker at HEE, even though he was an employee of the Trust. Applying a purposive construction to the legislation, Elias LJ concluded that a worker who has protection as against an end-user still requires protection as against an intermediary where the intermediary is alleged to have acted detrimentally. Therefore, the section 230(3) carve-out cannot be read literally; rather, section 43K protects individuals who are not section 230(3) workers “as against a given respondent”.

Elias LJ’s conclusion was reinforced by the reasoning of Simler J (President) in McTigue v University Hospital Bristol NHS Foundation Trust UKEAT/0354/15. In McTigue, Simler J rejected an argument by the NHS Trust, which relied upon the EAT decision in Day, that an agency nurse could not be a worker of the Trust because she was employed by the agency. In reaching this conclusion, Simler J considered the unsatisfactory consequences if the argument put forward by the Trust was correct: an agency could be insolvent and the end-user liable for detriments done because of protected disclosures, but no remedy would be available, which would substantially reduce the scope of whistleblowing protection. It is helpful to see some tensions between the EAT decisions in Day and McTigue (which I have previously discussed here) have been resolved.

As to the second ground of appeal, Elias LJ held that the ET appeared to see its task as being to identify the body which substantially determined the terms of engagement, thereby overlooking the possibility that both HEE and the Trust could have played a role in determining the terms. However, he rejected an argument that the ET would have been bound to find in favour of one party or the other as to the issue of whether HEE substantially determined the terms of engagement, had it properly directed itself.  Accordingly, the matter has been remitted to a differently constituted ET to consider the matter as a preliminary issue so findings of fact can be made.  In the course of these proceedings, HEE will be required to disclose evidence of the nature of its training relationship with junior doctors

Commentary

The Court of Appeal’s decision confirms that an individual may have several employers for the purposes of whistleblowing protection. The fact that an individual may be regarded as an employee or worker as against an intermediary does not preclude the individual from being a worker of the end-user (or vice versa). Moreover, it is feasible that several entities may substantially determine the terms of an individual’s engagement. It is not necessary for an ET to assess which entity determines the most significant terms of engagement.

An ET may look at the wider circumstances in considering whether an entity substantially determines the terms of an individual’s engagement. Elias LJ clarified that an ET should assess a particular relationship on a “broad brush basis having regard to all the factors bearing upon the terms on which the worker was engaged to do the work”. In the Day case, non-contractual factors such as the manner in which HEE monitors a junior doctor’s training progress may be relevant. However, the relationship between the individual and putative employer must still have a contractual basis: see Sharpe v Worcester Diocesan Board of Finance Ltd & Anor [2015] ICR 1241. Non-contractual employment relationships will not be subject to whistleblowing protection.

There was one issue which was not directly addressed by the Court of Appeal, namely what is meant by the term “substantially”. As discussed in my previous post, there were further tensions between the EAT decisions in Day and McTigue: Langstaff J held that “substantially” means “in large part”; whereas Simler J held that a comparison was required of whether it is the individual on the one hand or the intermediary or end-user on the other that determines the terms of engagement. The Court of Appeal stated by way of observation that an individual cannot come within the extended definition of worker if they substantially determine the terms themselves, even if the intermediary and/or end-user can also be said to substantially determine the terms. Consequently, parties are likely to suggest the term “substantially” has a neutral meaning and a multi-factorial investigation of the parties’ respective bargaining powers is required.

The clarity provided by the Court of Appeal in Day is to be welcomed. In the context of the healthcare sector, this decision applies an expansive approach to whistleblowing protection and mirrors the government’s proposal to prohibit discrimination of NHS job applicants by employers which include HEE. More widely, organisations which use workers through an employment agency or business may be found to be an employer, even if they do not exercise significant control over the individual. Agency workers or individuals who provide services through personal service companies should be able to access an end-user’s whistleblowing policies and may make qualifying disclosures to the end-user as the putative employer.

Devereux Marianne Tutin

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