Employment Law Briefing November 2018

Thursday 15th November, 2018

Court of Appeal confirms that individual employees can be liable for whistleblowing dismissal claims

Background

The Court of Appeal has handed down its judgment in the case of Osipov. The case expands the protection given to whistleblowers under the Public Interest Disclosure Act 1998 (“PIDA”) by making it easier for claimants to claim that they were dismissed because they blew the whistle.

The purpose of PIDA is to protect workers who call out wrongdoing, subject to their having satisfied certain conditions. Simply put, workers who blow the whistle are protected if they suffer retribution in the form of:

  • ‘detriment’ (bullying, micromanagement, pulling a nice piece of work away from someone, etc); or
  • ‘dismissal’.

Until Osipov, the conventional wisdom has been that there are two main differences between detriment and dismissal claims:

  • ‘detriment’ claims can be brought against individual employees or an employer (whereas dismissal claims can only be brought against an employer); and
  • ‘detriment’ claims are generally thought to be easier to prove because the claimant only has to show that whistleblowing was a significant part of the motivation for the treatment (whereas in dismissal claims, the claimant has to show the whistleblowing was the ‘reason or principal reason’ for the dismissal).

Facts

The case of Osipov was brought by an individual (Mr Osipov) who claimed that he had been dismissed because he had blown the whistle on wrongdoing. The employer became insolvent and so Mr Osipov brought a claim for c.£1.7m against the two company directors who he said had been the ones that dismissed him. Many expected Mr Osipov to lose because (as above) it was generally thought that dismissal claims could only be brought against the company (rather than individual employees).

 Decision of the Court of Appeal

The Court of Appeal confirmed that a claimant can now get the best of both worlds by claiming that their dismissal was itself a type of detriment.

This way, a claimant can bring a dismissal claim (which has the potential to be much more lucrative than a traditional detriment claim) against individual employees on the basis that a dismissal is itself a type of detriment. Additionally, the employer will be liable for the decision maker’s actions, so a claimant ought to recover against their employer even if the individuals don’t have the funds to pay.

Lastly, a claimant pursuing a whistleblowing claim through this route can recover for injury to feelings, which in a whistleblowing case may be significant and which is unavailable in a pure dismissal case.

 Practical implications

This case is a worrying development for employers because it shows that to bring a dismissal claim, a claimant must now only satisfy the lower hurdle of showing that the dismissal was ‘on the grounds’ of the whistleblowing and, therefore that the whistleblowing was a significant part of the motivation for the dismissal. In short, whistleblowing dismissal claims just became harder for employers to defend and no doubt an increase in whistleblowing claims is therefore likely.

Whistleblowing claims are also more likely to include claims against individual employees. This is already a common tactic amongst claimant lawyers as the threat of a personal claim can increase the pressure on senior decision makers and, therefore, the impetus for settlement. Osipov is likely to give further impetus to this trend in the context of whistleblowing. Any training on whistleblowing should therefore highlight the risk of claims against individuals.

Practical steps that employers can take to protect themselves are as follows:

  • training staff so that they know how to recognise when a protected disclosure has been made (i.e. when someone has blown the whistle on wrongdoing), and not to subject the whistleblower to any detriment as a result;
  • putting in place a whistleblowing policy to help educate staff and to ensure managers know what to do when they have concerns that someone may have blown the whistle; and
  • being sure to investigate thoroughly and sensitively where a staff member may have made a protected disclosure.

We can of course assist with any of the above.

It is thought that the case will be appealed to the Supreme Court. There is currently no information as to how long this might take but, if it is appealed, it could be at least the summer of 2019 before we get a final decision.