Individual employees can be liable for a detriment suffered by a whistleblower

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In the case of Timis and another v. Osipov [2018] EWCA Civ 2321 the Court of Appeal confirmed that an employee can bring a claim against their co-workers, along with the employer, for being subjected to the detriment of dismissal arising from making a protected disclosure (commonly known as whistleblowing).

Whistleblowing in brief

Under the Employment Rights Act 1996 (ERA) workers have the right not to be subjected to any detriment (including dismissal) on the grounds that they have made a protected disclosure. "Whistleblowing" or "a protected disclosure" are terms used to describe any disclosure of information by a worker which, in the reasonable belief of the worker making the disclosure, is made in the public interest and involves a concern about one or more of the following situations:

  • criminal offence;
  • breach of any legal obligation;
  • miscarriage of justice;
  • danger to the health or safety of any individual;
  • damage to the environment; and
  • the deliberate concealing of information about any of the above.

The disclosure can be made internally (to the worker's employer) or externally to certain prescribed persons (for example, to a regulatory body).

In March 2015, BEIS published Whistleblowing: Guidance for Employers and Code of Practice, which explains an employer's responsibilities with regard to whistleblowers and provides practical guidance on dealing with employees who have made or wish to make a protected disclosure.

Background

Mr Osipov was the CEO of International Petroleum Ltd (the company). During his time as CEO he made a number of disclosures related to corporate governance and compliance with Nigerian law. He was subject to detriment and then dismissed by two non-executive directors of the company, Mr Sage (a non-executive director with managerial functions) and Mr Timis (a non-executive director and the company’s largest individual shareholder). Mr Sage acted on instructions from Mr Timis when dismissing Mr Osipov.

Mr Osipov brought a claim to the Employment Tribunal alleging that he had been unfairly dismissed and subjected to detriment for having made protected disclosures. He succeeded with both claims. The Tribunal held that he was unfairly dismissed by the company under section 103A of the ERA. In addition, the Tribunal held that the directors' conduct in relation to Mr Osipov’s dismissal amounted to a detriment contrary to section 47B(1A) of the ERA. This meant that Mr Sage and Mr Timis were both held jointly and severally liable with the company for his losses – which amounted to more than £1.7 million. The company and both directors appealed the decision to the Employment Appeal Tribunal (EAT). The directors argued that, whatever their liability for detriments prior to dismissal, they should not be liable for the losses flowing from the dismissal itself. They were unsuccessful and subsequently appealed to the Court of Appeal.

Court of Appeal decision

The Court of Appeal has upheld the previous decisions of the tribunals and backed the original award made to Mr Osipov. In making the decision the Court considered whether an individual worker can be held liable for a dismissal under section 47B(1A) despite the apparent restriction imposed by section 47B(2), which excludes a detriment claim if the detriment "amounts to dismissal itself".

The Court held that it could not have been the intention of Parliament to exclude liability under section 47B because the same remedy was available under section 103A of the ERA. The Court also pointed out that there is nothing in the wording of the ERA that "excludes from individual liability detriments amounting to termination of the working relationship". In other words, there is no reason for fellow workers to be relieved of liability if they subject another worker to a detriment which results in a dismissal.

Comment

This decision has far-reaching consequences. Individual employees can now be liable for their actions towards whistleblowers, including where these result in a dismissal. In practice this may result in a new trend, where the whistleblowing claims are brought against both the employer (unfair dismissal claim) and the individual who decided to dismiss the employee (detriment claim).

Employers should also be mindful of the potentially unlimited compensation available to the employees in whistleblowing cases. In particular the usual upper limit for compensation in unfair dismissal claims does not apply to automatically unfair dismissals resulting from a protected disclosure. The employee can also seek an award for injury to feelings in respect of a detriment suffered under section 47B of the ERA.

It is paramount therefore that, in mitigating the risk of such claims, employers are prepared to provide adequate training to the managers and directors investigating and making decisions relating to protected disclosures, and that they have clear whistleblowing policies in place to ensure that the appropriate procedures are followed.

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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