Whistleblowing claims: case update


Whistleblowing claims are some of the most challenging that an organisation may face in an Employment Tribunal.  With uncapped compensation, regulatory risk and the reputational damage caused by airing allegations of corporate misconduct in public, they can be highly damaging regardless of outcome.   One of the more difficult aspects for employers is that individual workers can be personally liable for subjecting the whistleblower to detriments - and the employer can be vicariously liable for those claims.   A recent case throws up questions about how this works in practice. 

It has been established law for several years that individual workers can be liable for subjecting whistleblowers to detriments.  In the case of Osipov v Timis (2018), the Court of Appeal found that this included detriments which amounted to dismissal (e.g. recommending dismissal).  This finding was highly consequential in that case, because it meant that the two directors were personally liable for the (substantial) loss of earnings flowing from the dismissal.   The employer will be vicariously liable if the whistleblowing detriment claim is made out against its worker.   However, the Employment Appeal Tribunal has now cast doubt on whether vicarious liability will apply in this way where the detriment is dismissal. 

In the recent case of Wicked Vision Limited v Rice, the Employment Appeal Tribunal refused to allow a claimant to amend his claim to include a dismissal detriment claim against his former employer, on the basis that such claims are not possible against the employer when the detriment claimed is a dismissal.   He could still bring a claim for automatic unfair dismissal on the ground of making a protected disclosure, but these claims have tactical disadvantages compared with detriment claims.  First, the causation threshold is higher - the claimant must show that the reason or principal reason for the dismissal was making the protected disclosure, rather than merely needing to show that the protected disclosure influenced the detrimental treatment.   Second, awards for injury to feelings can be made only in detriment claims. 

The EAT's decision has already been criticised as being inconsistent with existing law, but unless it is overturned on appeal, claimants and respondents in whistleblowing claims will need to bear it in mind.   It seems likely that claimants will continue to bring claims against individual respondents where possible, particularly given differences in the legal test and the possibility of recovery under director and officers' insurance policies (as was the case in Osipov, where the employer was insolvent and so this was a key driver).   

Bringing claims against individual respondents can also be a powerful tactical lever to achieve an early or favourable settlement, particularly where the individuals are highly influential figures within the business or may face additional regulatory scrutiny as a result of the allegations.   Employers should ensure that their senior staff are fully aware of the implications of whistleblower protection and that they have suitable insurance policies to cover potential liabilities.  







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