When whistleblowing ends in dismissal: enhanced liability for employers

The Court of Appeal (“CoA”) has now handed down its judgment for the recently considered, joined cases of Rice v Wicked Vision Ltd and Barton Turns v Treadwell. Unfortunately for employers, this ruling expands the scope of whistleblowing liability and so necessitates a reconsideration of responsibilities.

The cases

The cases each concerned an employee who had brought a claim against their respective employers for automatically unfair dismissal. It had been alleged by both claimants that they had been dismissed as a consequence of making protected disclosures.

After their claims were filed, both claimants had sought to amend their claims. They argued that their dismissals – one by a company manager and the other by a company director – should also give rise to a whistleblowing detriment claim against their employers who, in their view, should be held vicariously liable for the actions of management staff in each case.

Following the Employment Tribunal’s decision to accept one application, but refuse the other, this led to appeals in both claims.

Conflicting approaches at the Employment Appeal Tribunal

The appeals were considered separately at the Employment Appeal Tribunal (“EAT”) and the divergence in the tribunal’s approach did not end there

Rice v Wicked Vision Ltd: the first approach

In the case of Rice v Wicked Vision Ltd, the EAT allowed the appeal brought by the claimant’s employer. This was owing to the fact that the Employment Rights Act 1996 specifically states that whistleblowing protections under section 47B do not apply where:

• “The worker is an employee, and
• The detriment in question amounts to a dismissal (within the meaning of Part X of the Employment Rights Act 1996)”.

Importantly, Part X includes claims for unfair dismissal. As such, additional detrimental treatment protections could not be afforded to the claimant.

Importantly, in arriving at this decision, the EAT were required to grapple with the consequences of a 2019 case by the name of Timis and Another v Osipov (“Osipov”). The EAT, ultimately, took the view that this case was of limited application.

Barton Turns v Treadwell: the second approach

As for the Barton Turns v Treadwell appeal, the EAT gave greater weight to Osipov. The EAT stated that the relevant law only prevented claims against the employer for dismissals it carried out directly, not for dismissals carried out on its behalf. As a result, the claimant was permitted to amend their claim as it was their co-worker who carried out their dismissal.

The Court of Appeal

Although the claims followed separate paths through the EAT, they were ultimately joined in the CoA, which considered them together, given the common question raised.

At the CoA, it was adjudged that the clear conclusion in Osipov was that that employees could bring a section 47 detriment claim against:

• co-workers who participate in the dismissal; and
• vicarious liability claims for that act against the employer.

Therefore, in line with EAT’s second approach, it followed that this section only prohibited a claim against the employer in respect of its own act of dismissal, and did not prohibit a claim against an employer’s member of management staff for detrimental treatment of effecting a dismissal. Even though it amounted to the same result for the employee.

Interestingly, the CoA disagreed with this conclusion, noting that this was simply contrary to the wording of the law. In particular, the CoA highlighted again that this section explicitly excludes claims where the detriment amounts to a dismissal.

Despite this, the CoA’s hands were tied. Regardless of their reservations, the CoA was obliged to follow the binding authorities before it. As a result, the claimants were allowed to amend their claim forms to include whistleblowing detriment claims against management staff in addition to whistleblowing dismissal claims against the employer itself.

Implications for employers

Although the CoA made its disappointment clear, it was emphasised that it would now fall to the Supreme Court to resolve the issue. Consequently, at least for now, employers must be aware that they face wider exposure to whistleblowing detriment claims, including those arising from dismissals carried out by managers or directors.

Accordingly, employers should ensure that they are taking sufficient steps to prevent the any form of whistleblowing connected detrimental acts and dismissals. This includes implementing, observing and updating a robust whistleblowing policy, training staff to handle disclosures responsibly and, thereafter, maintaining clear records of all decisions and actions taken.

If you have any questions about updating or creating an effective whistleblowing policy, or handling disclosures or whistleblowing claims, please do contact a member of our Employment team.