In a test of the Public Interest Disclosure Act 1998, an employment tribunal has found unanimously in favour of John Travers and ordered his employers in the city council to pay him pound;5,000 damages.
The council disciplined Mr Travers after he sent an anonymous email in October 2002 to Donald Anderson, the council leader, alleging malpractice in the Cityconnect organisation, part of the high-profile Edinburgh's Lifelong Learning Partnership, an arm's-reach body backed by colleges, universities and the city council.
The partnership is at present being wound up after eight years and is being replaced by a similar organisation. Cityconnect was launched in 2002 and financed by the New Opportunities Fund.
Mr Travers emailed Mr Anderson under the name "Donald Reekie" but the council traced the message back to a community centre where he worked. Mr Travers admitted he had tipped off the council leader.
In his email, he wrote: "I would ask that you look into this politically sensitive matter with your usual prudence. It would be rather unfortunate if the individuals who are acting in these unprofessional ways are alerted to your interest."
The council took a different view, however, believing Mr Travers was malicious in his allegations, and subsequently disciplined him.
Mr Travers contested the internal action and took his case to an employment tribunal. After a lengthy case, the tribunal this week said the council was wrong to discipline him under section 47B of the Employment Rights Act 1996.
The section updated by the 1998 Act advises: "A worker has the right not to be subjected to any detriment by any act, or any deliberate failure to act, by his employer done on the ground that the worker has made a protected disclosure."
In effect, Mr Travers was acting in the public interest in making his disclosure, whether his allegations were subsequently proved right or wrong.
Auditors' reports for the year ending 2003, obtained from Companies House by The TES Scotland, state: "Evidence available to us was limited because there was no system of control over the expenditure of pound;265,126 on the Cityconnect project on which we could rely, which could provide us with assurance that the expenditure was properly incurred either for that project or for the general objects of the charity itself."
Responding to the tribunal's decision, a council spokeswoman said: "It is inappropriate to comment before the detailed judgment is published."