Fri 25 Aug 2017

Personal liability for whistleblowing detriment claims

The EAT has recently considered whether an individual's decision to dismiss a whistleblowing employee amounted to a detriment that they were personally liable for.

The types of claim that can be made by a whistleblowing employee can, at first sight, be a little confusing.  An employee who believes that they have been dismissed for whistleblowing can bring a claim for automatically unfair dismissal against their employer.  They are prevented by statute from bringing a claim for detriment amounting to dismissal against the employer.  Claims of detriment can though be brought against colleagues of the dismissed employee.  Compensation for detriment claims against employers are limited to pre-dismissal losses while compensation for unfair dismissal is limited to losses sustained in consequence of that dismissal - for example, loss of salary.

In International Petroleum Ltd & Ors v Osipov and Ors the EAT has considered whether an individual's decision to dismiss a whistleblowing employee could constitute a detriment that the employee could make a valid claim for even when they were also claiming unfair dismissal against their employer. 

Mr Osipov, during a short tenure as CEO at International Petroleum Limited, made disclosures relating to the company's corporate governance and compliance with Nigerian law (where the company were carrying out oil exploration).  Following this Mr Osipov was subjected to detriments by two non executive directors, Mr Timis and Mr Sage, and some external contractors.  This included Mr Sage dismissing Mr Osipov on the instruction of Mr Timis. 

Mr Osipov was successful in subsequent claims for unfair dismissal against his employer, and for detriment against the employer, the non-executive directors and the external contractors.  The Employment Tribunal awarded £1.745 million in compensation for the detriments and dismissal, the award being made against all of the respondents on a joint and several liability basis.  This meant that although Mr Timis and Mr Sage were not personally liable for the unfair dismissal claim made against the employer, they were liable for the post dismissal compensation arising from that claim.

Mr Timis and Mr Sage appealed in relation to their personal liability for detriment amounting to dismissal and also their liability for the post dismissal compensation - primarily arguing that damages arising out of the dismissal could not be recovered in any detriment claim.  

The EAT dismissed the appeal.  They pointed out that it has always been the case that a worker (who does not have the status to claim unfair dismissal) has been able to pursue a case of detriment amounting to dismissal and that there was therefore nothing to prevent a detriment claim of this sort against colleagues.  The EAT also found that the compensation awarded was recoverable from Mr Sage and Mr Timis as well as the employer.  It related to losses which flowed directly from the dismissal and the detriments to which Mr Osipov had been subjected to by Mr Timis and Mr Sage.

This case does have some troubling consequences for employers as well as colleagues of dismissed whistleblowers.  It does seem to be giving employees two bites at the cherry - something which Parliament arguably intended to avoid by specifically preventing employees bringing detriment amounting to dismissal claims against the employer.  In addition, injury to feelings awards cannot be made in unfair dismissal cases, but they can be made in detriment claims.  Given employers can be vicariously liable for detriment claims they may become liable for this additional compensation. 

Unless this decision is appealed and overturned it may well encourage claimants to raise whistleblowing detriment claims against dismissing managers on a personal basis in addition to unfair dismissal claims against their employer. 



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