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The protection of workers and employees against detriment and dismissal by an employer on the ground that they have “blown the whistle” or made a protected disclosure is well known. What is perhaps less recognised is that, as well as the fact that the employer can be held liable for unlawful actions of an individual’s co-workers in subjecting him or her to whistle-blowing related detriment, that an individual’s co-workers can also be personally liable for such detriment.

Moreover, following the recent decision of the Court of Appeal in Tims v Osipov such personal liability can extend to losses flowing from a dismissal even though the whistle-blowing legislation at section 47 B(2) of the Employment Rights Act states that a claim cannot be brought for whistle-blowing related detriment “where the detriment in question amounts to dismissal”.

Facts

Mr Osipov was the CEO of International Petroleum Ltd. He made a number of protected disclosures relating to corporate governance and legal compliance. He was then dismissed on the recommendation of two directors of the company, Mr Timis and Mr Sage. He brought whistleblowing claims against both his employer and against Timis and Sage personally. The Employment Tribunal found that the reason for the dismissal was the fact that Osipov had made protected disclosures. Therefore he had been (automatically) unfairly dismissed by the employer. It also went on to find that by their conduct in recommending his dismissal Timis and Sage had subjected Osipov to whistle-blowing related detriment and were therefore personally liable to compensate Osipov for the losses he had suffered as a result of the dismissal. It awarded Osipov £1, 745,000 compensation for the detriment and dismissal against Timis, Sage and the Company on a joint and several basis (meaning Mr Osipoc could go after either or both individuals or the company for all the losses).

On appeal it was argued that this was a case where the detriment in question amounted to dismissal and since section 47B (2) rules out such claims Timis and Sage could not be personally liable for such detriment.

Lord Underhill, giving the main judgment said that to interpret section 47B (2) in the way argued on behalf of Timis and Sage would produce an unsatisfactory result and was unlikely to have been intended by Parliament in passing the legislation. Once Parliament had decided to make co-workers personally liable for whistle-blowing related detriment there was no good reason in principle why they should not be liable in a case where the detriment amounted to dismissal, that is for being a party to a decision to dismiss for an unlawful reason. All that was excluded by section 47B (2) was a claim against the employer for detriment amounting to dismissal. Moreover in relation to compensation the legislation did not prevent recovery of losses flowing from a dismissal which was itself caused by a prior act of whistle-blowing related detriment.

Comment

Subject to any further appeal it is now clear that, as with discrimination protection, individual co-workers can be personally liable for their actions towards whistle-blowers including in relation to losses resulting from dismissal. Claimants may well now commonly consider bringing whistle-blowing dismissal-related claims against both the employer (as an unfair dismissal claim) and against the dismissing manager (as a detriment claim). Usually it will make more sense to focus on a claim against the employer on the basis that it will have greater resources, but, as in this case, where the employer is insolvent or potentially insolvent an employee may have every incentive to pursue claims against individuals personally. In addition in a detriment claim it is possible (unlike in an unfair dismissal claim) to obtain an award for injury to feelings as well as financial loss adding to the financial exposure potentially involved.

While the directors involved in this case had the protection of directors and officer’s liability insurance not all co-workers will be directors and benefit from such insurance cover.

Senior managers within businesses now clearly need to be alive to the possibility of personal liability in relation to whistle-blowing detriment and employers would be well advised to train such individuals in order to help manage and mitigate such risks.

If you have any queries regarding any of the issues discussed above, please contact a member of the Stronachs Employment Team

Eric Gilligan, Partner

Chambers Leading Firm 2019

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