Public interest disclosures


Kraus v Penna Plc & Another [2004] IRLR 260



Mr Kraus entered into a consultancy agreement with Penna Plc to provide HR services to a client of Penna in connection with the client's reorganisation and redundancy programme. He was soon informed that the client no longer required his services and his consultancy agreement was terminated.


The client contended that it decided to dispense with his services because of his appearance, demeanour and lack of enthusiasm for the project. He claimed that he had been subject to a detriment for making a 'protected disclosure', that is to say, because he had advised one of the client's directors that the redundancies proposed could breach employment legislation and make the company vulnerable to claims of unfair dismissal.


His claim was struck out on the ground that it had no reasonable prospect of success and was thus misconceived because he had not made any disclosure and that he had failed to demonstrate that the client was 'likely to fail to comply' with any legal obligation.


The Employment Appeal Tribunal upheld the tribunal's conclusion that Mr Kraus had not made a qualifying disclosure in terms of section 43B (1) (b) of the Employment Rights Act 1996.



The tribunal did not err in finding that the information disclosed could not be said to show that the company was 'likely to fail to comply' with its legal obligations. The word 'likely' requires more than a possibility or a risk that an employer might fail to comply with the relevant legal obligations.


Further, the tribunal was also entitled to find that Mr Kraus had failed to demonstrate that the employers were under any specific legal obligation with regard to the proposed redundancies that they were likely to breach.


The tribunal did not err in failing to have regard to the applicant's 'reasonable belief' as to that matter. If employers are under no legal obligation, a worker cannot claim the protection of this legislation by claiming that he reasonably believed that they were. His belief and the reasonableness of it relates to the factual information in his possession, namely what he perceives to be the facts and the basis on which he considers it reasonable to rely upon them. This can only properly be tested against the background of a legal obligation to which the employers are subject. Thus it was proper to strike out the claim.



By Martin Edwards, Mace & Jones, Liverpool