28 July 2017

Losses flowing from dismissal can be claimed in whistleblowing detriment claims against other workers


In International Petroleum Ltd & Ors v Osipov & Ors [2017] UKEAT 0058_17_1907 the Employment Appeal Tribunal has held that an individual Respondent (a worker or agent of the employer) who is instrumental in the decision to dismiss a whistleblower can be liable for post-termination losses flowing from that decision under the detriment regime.

Mr Osipov was employed briefly as the Chief Executive Office of International Petroleum Ltd, an oil and gas exploration company.  Mr Osipov made four protected disclosures relating to the company’s business activities in Niger.  A few days after making the last of these protected disclosures, Mr Osipov was summarily dismissed.  The decision to dismiss was taken by one non-executive director of the company, Mr Timis, and another, Mr Sage, emailed Mr Osipov to dismiss him.

Mr Osipov issued claims at the Employment Tribunal alleging that Mr Timis and Mr Sage, amongst others, had subjected him to detriments on the ground that he had made a protected disclosure.  He also claimed automatic unfair dismissal.  The Tribunal found that, although ostensibly non-executive directors, Mr Timis regarded himself has having executive authority and Mr Sage “was clearly exercising managerial functions”, and, as such, they were workers acting in the course of their employment with the company.  The Tribunal also held that the detriments to which Mr Timis and Mr Sage subjected Mr Osipov because he had made protected disclosures included the decision to dismiss and its implementation.  As such, Mr Timis and Mr Sage were held jointly and severally liable with the company for the, very significant, losses that flowed from Mr Osipov’s dismissal.  The Respondents appealed on various grounds.

The EAT dismissed almost all the grounds of appeal.  Significantly, it upheld the Tribunals’ decision that the non-executive directors were jointly and severally liable for the losses flowing from dismissal.  It rejected various arguments from the Appellants, including that: the intention behind the legislation was for a complete distinction between the whistleblowing pre-dismissal detriment and dismissal regimes; and, damages arising out of dismissal cannot be recovered via a detriment claim.  Mrs Justice Simler concluded that the words “within the meaning of Part X” in section 47B(2) Employment Rights Act 1996 (“ERA”) limit the exclusion from the detriment provisions to those detriments amounting to unfair dismissal claims, which can only be pursued against the employer.  It does not extend to any and all claims for detriment amounting to dismissal in a more general sense.  Further, she held that nothing within section 47(B)(1A) ERA excludes detriments amounting to termination from individual liability.

In terms of the practical ramification of the EAT’s decision, Mrs Justice Simler commented that it will be ‘an unusual case’ in which an individual wishes to pursue a fellow worker for a whistleblowing detriment amounting to dismissal, rather than the employer.  However, as section 47B(1B) ERA makes an employer vicariously liable for detrimental treatment meted out by its workers, in effect, this potentially offers an alternative route to pursuing dismissal related whistleblowing claims against an employer under the detriment regime, with its lower hurdle for causation.

Written by Matthew Fletcher