Individual employees liable for whistleblowing dismissal

The Court of Appeal has ruled that individual employees were personally liable for their part in dismissing an employee on whistleblowing grounds. 

Facts

In Timis and Sage v Osipov, Mr Osipov made a number of protected disclosures which led to Mr Timis instructing Mr Sage to dismiss him.  Mr Timis and Mr Sage were both directors of the International Petroleum Limited (IPL), Mr Osipov’s employer. Mr Osipov brought a claim for unfair dismissal against IPL and for detrimental treatment against Mr Timis and Mr Sage on grounds of whistleblowing.  

The employment tribunal upheld his claims and awarded him over £1.7m in compensation to be paid by IPL, Mr Timis and Mr Sage on a joint and several basis.  IPL became insolvent, leaving Mr Timis and Mr Sage to foot the bill.  Mr Timis and Mr Sage appealed unsuccessfully to the Employment Appeal Tribunal and they then appealed to the Court of Appeal.  They argued that the whistleblowing legislation does not permit an employee to bring a detrimental treatment claim where the detriment relied on is dismissal. Instead the employee can only bring an unfair dismissal claim against the employer.  

Decision

The Court of Appeal dismissed the appeal.  An individual worker can be liable for an employee’s dismissal via a detrimental treatment claim.  When Parliament decided that workers should be personally liable for treating a co-worker detrimentally on whistleblowing grounds, it could not have intended that they should not be liable if the detriment amounts to dismissal.  Although the legislation states that an employee cannot bring a detrimental treatment claim where the detrimental treatment relied on is dismissal, that only prevents them bringing a claim against their employer, where the claim should instead be brought as one of unfair dismissal.  

The Court of Appeal went on to express its view that an employee can in principle claim dismissal losses where prior detrimental treatment on whistleblowing grounds causes a later lawful dismissal, although the usual rules about remoteness and quantification of such losses will apply. 

Implications

The decision has serious ramifications for managers and others involved in dismissing employees in whistleblowing cases but it has significant implications for employers as well. 

There are a number of reasons why an employee dismissed on whistleblowing grounds may choose to bring a claim against a co-worker, in addition to a claim for unfair dismissal against their employer.  First, it is possible to obtain compensation for injury to feelings which is not available in a claim for unfair dismissal. Second, the burden of proof is easier to satisfy. In a detriment claim they only need to show that their whistleblowing disclosure materially influenced their colleague’s treatment of them. By contrast, in an unfair dismissal claim they need to show that whistleblowing was the reason or principal reason for their dismissal.  

Third, it does not matter that the employer will normally be the one with deeper pockets, as employers will be vicariously liable for detrimental treatment meted out by their employees (unless they can show that they took reasonable steps to prevent their unlawful conduct).  This means that employers can be held liable, via the back door, for an employee’s dismissal (and the losses flowing from it) even where the employee is unable to satisfy the higher burden of proof for unfair dismissal. They could also be on the hook for an injury to feelings award.   

Where prior detrimental treatment on whistleblowing grounds causes a subsequent lawful dismissal, an employee is able to recover their post-dismissal losses as part of the detrimental treatment claim.  The Court of Appeal gave the example of an employee who develops a serious long-term mental illness as a result of being victimised by colleagues for making a protected disclosure. The employee is then dismissed on ill-health grounds.  Assuming that the decision-maker was not motivated by whistleblowing, the dismissal is likely to be fair but the employee would be able to recover losses arising from dismissal in a detriment claim against the individuals responsible for the victimisation.  The employer would also be vicariously liable and so equally responsible for those losses. 

Directors and officers of companies may wish to check whether they are covered for whistleblowing claims through their liability insurance. Fortunately for Mr Timis and Mr Sage, they both have insurance covering the full amount of their liability.