EAT holds that Tribunal wrongly read words into statute allowing employee to seek disclosure of documents (The Office for Gas and Electricity Markets v Mr Pytel UKEAT/0044/17/JOJ)

In the case of The Office for Gas and Electricity Markets v Mr Pytel UKEAT/0044/17/JOJ, the Employment Tribunal (“ET”) held that words should be read into the Utilities Act 2000 to allow Mr Pytel (the “Claimant”) to continue his whistleblowing claim against The Office for Gas and Electricity Markets (“OFGEM”) in circumstances where he would otherwise have been committing a criminal offence by bringing it.  The Employment Appeal Tribunal (“EAT”) disagreed with the ET’s approach and said that the balance to be struck between the rights of whistleblowers and the safeguarding of business information obtained in the exercise of regulatory functions was a matter for Parliament, not for the courts.

The facts in The Office for Gas and Electricity Markets v Mr Pytel

The Claimant was employed by OFGEM as an economist.  He claimed that he suffered a detriment for making a protected disclosure under the Employment Rights Act 1996 (the “ERA”) about OFGEM’s implementation of a new smart meter scheme.  Smart meters are electronic devices for homes and businesses that measure the use of electricity and gas. Mr Pytel was tasked with scrutinising elements of a major project concerning smart meters for OFGEM.  He claimed that when he raised concerns with them about the project he was bullied, treated unfairly and side-lined at work.

OFGEM argued that restrictions in section 105(9) of the Utilities Act 2000 prevented the Claimant from providing or receiving any disclosure in the proceedings.  Section 105(9) prohibits the disclosure of certain types of information relevant to the energy sector and their consumers and breach of it is a criminal offence which can result in a fine or jail sentence of up to two years.

Whilst section 105(4) of the Utilities Act does permit disclosure to be made in civil proceedings under certain specified legislation, this exception did not include the whistleblowing provisions of the ERA.  Without the disclosure it would have been impossible for the Claimant to successfully pursue his claim and the ET would not have been in a position to consider whether the detriment the Claimant was complaining about had occurred as a consequence of him whistleblowing.

The decision of the Employment Tribunal

The ET agreed with the Claimant that the restrictions under the Utilities Act 2000 would have such a prohibitive effect on any whistleblowing claims that it would constitute a breach of his rights under the European Convention on Human Rights (“ECHR”), in particular his right to a fair hearing pursuant to Article 6 and his right to freedom of expression under Article 10.

The ET went on to consider whether it was possible to read the Utilities Act 2000 so as to make it compatible with the Claimant’s rights under the ECHR in accordance with section 3 of the Human Rights Act 1998 (“HRA”).  Section 3 of the HRA requires courts to interpret legislation so that their provisions are compatible with the articles of the ECHR wherever possible.

The ET concluded that the legislative bar under the Utilities Act 2000 had in fact been an oversight by Parliament and added the provisions of the ERA to the list of legislative exceptions listed at section 105(6) of the Utilities Act 2000.  Consequently, an order for disclosure was made.  The OFGM appealed this decision.

The decision of the Employment Appeal Tribunal

In allowing OGEM’s appeal, the EAT held that section 3 of the HRA only requires ET’s to read legislation compatibly with rights under the ECHR where it is possible to do so. In this case the exceptions to disclosure in section 105(6) were carefully crafted and the EAT was satisfied that the absence of a provision for disclosure in whistleblowing cases was deliberate. The ET’s decision to read words into that section contradicted Parliament’s intention. In any event, the HRA preserves Parliamentary sovereignty by recognising that Parliament is free to legislate in a way which is incompatible with Convention rights. The ET’s order for disclosure was therefore unlawful and of no effect.

Our solicitors’ views on the case of The Office for Gas and Electricity Markets v Mr Pytel

Sacha Barrett, a Senior Associates in the employment department at Redmans, made the following comment on the case: “In this instance the EAT’s decision curtailed the rights of whistleblowers in the energy sector, potentially leaving them without a remedy in respect of any detriment they suffer as a result of making protected disclosures about the actions or inactions of their employers”

The decision of the Employment Appeal Tribunal in The Office for Gas and Electricity Markets v Mr Pytel UKEAT/0044/17/JOJ  can be found here