Protection of workplace whistleblowers is vital to encouraging disclosures to be made. Individuals need to be confident that, when they make a disclosure of information, they reasonably believe shows one of the necessary statutory wrongdoings, they will not become victims of retaliatory action by their employer. Workers are protected from both dismissal and detriment on the grounds that they have made a protected disclosure. Causation is therefore key to enabling an employer to successfully defend a claim by an employee who attempts to link the actions of their employer to a prior protected disclosure made by the employee.
Background
The case of Argence-Lafon v Ark Syndicate Management Limited is a good illustration of this. The claimant was a senior underwriter for Ark Syndicate Management Limited ("ASML"). In 2019 he raised concerns about a very large insurance claim, made by a company called ENI, relating to an alleged blowout during oil drilling in Vietnam. The claimant suspected the claim was invalid. In 2020 he repeated those concerns, this time alleging that the claim was potentially fraudulent. An independent investigation concluded the claim was legitimate. Despite this, the claimant persisted in his allegations.
In 2021, the claimant did not meet his performance objectives. However, the objectives that had been set were considerably higher than in previous years. The claimant was placed on a Performance Improvement Plan ("PIP"). He refused to engage with it, believing that the objectives that had been set and the PIP were detriments following the making of protected disclosures. He also continued to allege that the ENI claim was fraudulent and that two ASML managers were complicit in it. He was eventually dismissed with ASML citing a complete breakdown in trust and confidence. An appeal against the dismissal was heard and dismissed.
The claimant raised a tribunal claim arguing that the PIP was a detriment for making protected disclosures. He also argued that the dismissal was automatically unfair, having been caused by the making of protected disclosures, and ordinarily unfair. If the dismissal was found to relate to making a protected disclosure, there would be no cap on the level of award that the Employment Tribunal ("ET") could make.
Why did the whistleblowing claims fail?
Both the ET and the Employment Appeal Tribunal ("EAT") found some of the disclosures made in 2019 to 2020 were protected. However, the disclosures made after the independent investigation into his allegations were not protected. The claimant's belief in those disclosures was deemed unreasonable in light of the outcome of the independent investigation.
There was some potentially problematic evidence from the employer's perspective. When it came to the performance objectives, the objective levels were set after the protected disclosures were made, so chronologically could be linked. They were also significantly more demanding than the claimant had been set before, for example his premium income target per month was doubled, and differed from the objectives set for other team members. Had he been set up to fail after making the protected disclosures? Not according to ASML, and that was accepted by the ET and subsequently the EAT. This was despite the ET finding that the level at which the objectives were set was "unfair and unreasonable, and it was unlikely that the claimant would be able to achieve them".
ASML was able to demonstrate that their reaction to the disclosures when they were made in 2019 was appropriate. At that time the claimant had received a considerably higher bonus than he had been given the previous year. When the claimant initially continued to question the insurance claim in 2020, steps were taken to help him get his questions answered, including agreeing to instruct an independent report. The tribunal also found it relevant that various two-hour long meetings had taken place alongside extensive communications with the claimant. All of these factors allowed the employer to sever the link between the protected disclosure and subsequent PIP and dismissal. This, according to the ET, proved ASML had no issue with the claimant making the protected disclosures. Rather it was frustration with the claimant continuing to pursue the matter after the outcome of the independent report was known, and at the expense of his workload, which played a part in the objective setting. That was "distinct and separate" from the making of the protected disclosures.
ASML was also able to demonstrate that the implementation of the PIP was due to performance. Even if the objectives the claimant had been given were lower, he would still not have met them. The making of the protected disclosures did not influence the decision to start the formal PIP.
ASML similarly found that the reason for the dismissal was a genuine belief that the claimant had failed to engage in the PIP and it was unlikely he would ever do so; and that the claimant's persistence in alleging not only that a fraudulent claim had been made but that two ASML managers were complicit in it had led to a breakdown of trust and confidence. These were potentially fair reasons, conduct or some other substantial reason, for the dismissal, not connected to the making of protected disclosures.
The claimant was however successful in his ordinary unfair dismissal claim. Although potentially fair reasons had been found for the dismissal, the ET held that ASML had failed to conduct an investigation into whether the PIP objective levels set were appropriate or reasonable. Had it done so, it may have come to a different conclusion on the dismissal. In addition, the claimant did not have advance notice that the disciplinary hearing was going to consider whether there had been a breakdown of trust and confidence. He had only been told the purpose of the hearing was to consider his failure to engage with the PIP.
Employers cross appeal succeeds
ASML argued before the EAT that the ET, in finding the dismissal was ordinarily unfair, had failed to consider the appeal. The EAT concluded it was arguable that the appeal could have remedied the failings at the disciplinary hearing, and the ET had not factored this into its analysis. That issue was remitted to the ET to consider.
What can employers learn from this?
This case is a very clear example of how important it is for an employer to be able to evidence the reasons for the decisions it takes, often after a considerable passage of time. In this case, the ET hearing was three years after the insurance claim and the EAT hearing was six years after the insurance claim. Clear contemporaneous records should be taken demonstrating the decision-making process. The ability to demonstrate legitimate, non-retaliatory reasons for actions or failures to act that could be perceived as detrimental to a worker is what will enable an employer to successfully defend a claim of this type. It also serves as a useful reminder that taking the time to conduct a genuine and rigorous appeal process might provide a potential get out of jail free card for an employer and turn an otherwise unfair dismissal into a fair dismissal.
