Can an individual be liable for a whistleblowing dismissal along with the employer under the detriment provisions?

Summary

A whistleblower will qualify for protection from detrimental treatment and unfair dismissal if they have made a qualifying and protected disclosure, relating to one of six types of relevant failure. They must have the reasonable belief that the information tends to show one of the relevant failure and it must be in the public interest.

Dismissal of an employee will be automatically unfair if the principal reason for their dismissal is that they have made a protected disclosure and workers are also protected from being subjected to detriment for making a protected disclosure.

The Court of Appeal has ruled that decision makers may be held personally liable for dismissal related to a whistleblowing claim. Timis and Sage v Osipov [2018] EWCA Civ 23121.

Facts

Mr Osipov, Chief Executive Officer of International Petroleum Limited (“the Company”), was dismissed without notice following disclosures by him surrounding corporate governance issues. Mr Timis and Mr Sage, two Non-Executive Directors, played key roles making the decision to dismiss Mr Osipov. The Company was insolvent at the time this claim was brought. Mr Osipov brought a successful claim for detriment and unfair dismissal and was awarded over £1.7 million against both the Company and the Non-Executive Directors personally. The Tribunal deemed that both the Company and the Non-Executive Directors were jointly and severally liable for the compensation. Mr Timis and Mr Sage appealed arguing they should not be held personally liable for the detriment of dismissal and that compensation should be limited to losses pre-dismissal.

Outcome

The Court of Appeal disagreed with the grounds for the appeal and ruled that the Directors were personally liable as they had subjected him to a detriment, in that they excluded him from business meetings, foreign trips and management decisions. The Court confirmed that the law prohibits whistleblower detriment by workers working for the same employer, as well as by the employer itself. As they were liable for the detriment, they were also liable for the losses flowing from the dismissal they had recommended. The Court went further and stated that compensation should not be limited to pre-dismissal only and that future lost earnings may be applied to any award.

This judgment effectively means that a claim for whistleblowing related dismissal can be brought as an automatic unfair dismissal claim against the employer and as a whistleblowing detriment claim against the individual decision makers personally. A detriment claim entitles a Claimant to claim additional compensation for ‘injury to feelings’, which does not apply in a straight unfair dismissal case. This may be used tactically by claimants to secure compensation awards against both the decision makers and the employer for a substantial award.

Implications for Employers

This case illustrates the significant compensation awarded for these types of claims, especially as a claimant can bring about an unfair dismissal claim and an additional detriment claim where compensation considers injury to feelings. There has been a 15% rise in the number of whistleblowing reports to the Charity Commission alone, setting aside other regulators, which illustrates why it is crucial that employers are managing claims in the correct manner. As decision makers face personal liability for whistleblowing-related dismissals, all employers should ensure that decision makers are well trained to recognise whistleblowing issues and deal with such allegations are dealt with in the appropriate way. An up to date and appropriate whistleblowing policy should be in place and easily accessible for decision makers and staff so the process can be followed carefully.

The law and practice referred to in this article or webinar has been paraphrased or summarised. It might not be up-to-date with changes in the law and we do not guarantee the accuracy of any information provided at the time of reading. It should not be construed or relied upon as legal advice in relation to a specific set of circumstances.

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