An update on whistleblower protections for charity trustees

A recent case, MacLennan v British Psychological Society, has confirmed that charity trustees are not entitled to bring claims for whistleblowing detriment under the Employment Rights Act 1996 (ERA 1996).

This is an interesting case which has relevance for directors of academy trusts and governors of maintained schools (as trustees of exempt charities).

What is whistleblowing? 

Whistleblowing involves an employee or a worker reporting their employer's malpractice in the public interest. Whistleblowing is a protected act and cannot be used as a reason to dismiss, punish, or otherwise unfairly treat an employee or worker. When an employee or worker reports a whistleblowing matter, they are said to have made a “protected disclosure”.

Legislation defines “employee” and “worker” separately, but both are awarded whistleblowing protections. In both cases, the individual will have some form of contract with the employer (whether written or unwritten).

Employment tribunal

This particular case concerned a charity trustee (acting as president-elect of the charity) who had made a number of alleged protected disclosures regarding the management of the charity. Relations between the trustee and the charity deteriorated, and his membership of the charity (and as a result his trusteeship and presidency) was eventually terminated.

He then brought a claim in the employment tribunal alleging that his expulsion from the charity amounted to a detriment resulting from the protected disclosures he made.

The judge found that the trustee was not an employee or worker for the purposes of the ERA 1996 and the tribunal therefore had no jurisdiction to hear the claim. The judge held that the trustee accepted a volunteer role and there was no intention for him to become an employee or worker.

Appeal 

The trustee appealed the decision, arguing that the tribunal had made an error in finding that there was no contract in place. The trustee also argued that, regardless of whether there was a contract in place, Articles 10 (freedom of expression) and 14 (prohibition of discrimination) of the European Convention on Human Rights (ECHR) meant that he should be treated as a worker in any event.

The employment appeal tribunal (EAT) allowed the appeal regarding the application of the ECHR. The EAT held that the original tribunal had been wrong to find that the ERA 1996 could not be interpreted to take account of the trustee’s rights under the ECHR, and that the tribunal should take a broad approach when considering whether the trustee was in an analogous position to an employee or worker. The EAT held that the tribunal should consider factors such as:

• The type of role, including the level of responsibility the individual had, as well as the duties the role included.
  
  
• The possibility of the individual becoming aware of wrongdoing in their role, and the importance of that individual making protected disclosures in the public interest taking into account the nature of their role.
  
  
• Other routes available to the individual for making disclosures, and any other protections they may have.
  
  
• The potential retaliation the individual might suffer as a result of making the disclosure. 

The case was sent back to the original tribunal for consideration.

Decision

The tribunal applied the criteria identified by the EAT and, once again, held that the trustee was not entitled to whistleblower protections under the ERA 1996.

While the tribunal accepted that there were similarities between an employee or worker and a charity trustee, other factors that distinguished the roles outweighed these similarities. These factors included:

• Volunteer status – as a charity trustee, the role is voluntary; the charity does not pay the trustee. Although the tribunal did explain this was not determinative, it was still an important distinction. Trustees are required to abide by charity law (and any other relevant legislation) and rules relating to their charity, but they are not subordinate to the charity. In fact, trustees sit at the very top of a charity’s governance and leadership structure. The tribunal held this was materially different to the role of an employee or worker.
  
  
• Dismissal not possible – the potential damage a charity trustee could face by making a protected disclosure could not include dismissal from employment. The tribunal held that as a result, charity trustees are less likely to lose their source of income as a result of making a disclosure.
  
  
• The role of the Charity Commission – charity trustees can raise concerns regarding malpractice in their charity to the Charity Commission, who can investigate concerns and may use their legal powers to take a range of actions. The tribunal was therefore satisfied that alternative avenues to report wrongdoing existed. This principle could also to apply to the role of the Department for Education as principal regulator of schools and academy trusts.

The tribunal then considered how the difference in whistleblowing protections afforded to charity trustees and employees or workers is justified under the ECHR.

The tribunal found that there was a legitimate aim to be pursued, which was the avoidance of conflicts of interest that may arise where a charity trustee brings a claim against their charity. This could require the charity to expend charitable funds in dealing with the claim. The tribunal therefore held that the exclusion of charity trustees from whistleblowing protections was a proportionate means of furthering this legitimate aim.

Conclusions

This case is an important reminder that, at present, whistleblowing protections do not extend to trustees. It is important to flag that, as a first instance decision, this decision is not binding on other employment tribunals who may reach different conclusions on the facts, and a further appeal is still possible by the trustee in question.

It is also worth noting that there were two interveners in this case, the Government and the Charity Commission, both of which argued that it was not Parliament’s intention to extend whistleblowing protections to charity trustees.

It is possible that there will be further legislation in this area. Meanwhile, schools and academy trusts should consider their policies and procedures for allowing trustees to speak up and raise concerns, and how these concerns are handled.

Please contact Rachael Chapman at [email protected] or on 0191 211 7801 with any questions.