Court of Appeal holds two directors of a company personally liable for dismissal-related losses.
In Timis and another v Osipov, the Court of Appeal held that two directors of a company were personally liable for dismissal-related losses for actions which led to the claimant's dismissal.
Mr Osipov was CEO of International Petroleum. He raised concerns about corporate governance at the company and compliance with Nigerien law. Mr Osipov was instructed by the directors not to visit Niger. Such visits should have been a significant part of his role. Mr Timis, a director of the company, then instructed Mr Sage, another director, to dismiss Mr Osipov.
Mr Osipov brought whistle-blowing detriment and automatic unfair dismissal claims against his employer and detriment claims against Mr Timis and Mr Sage. An employment tribunal upheld his claims and awarded him £1,745,000 with the company and the two directors being jointly and severally liable. In this case, the company was insolvent and the two directors benefitted from directors' and officers' liability insurance. The EAT agreed with the tribunal's decision.
The Court of Appeal has now also upheld the decision of the tribunal.
Under whistleblowing legislation, an employee cannot bring a detriment claim against his or her employer where the detriment amounts to dismissal under Part X of the Employment Rights Act 1996 (although a worker can bring such a claim). An employee can of course bring a claim relating to unfair dismissal on the ground of whistleblowing. This claim can only be brought against the employer and not against individuals.
However, this case makes clear that an employee can bring a detriment claim against one or more work colleagues, even where the detriment amounts to dismissal, and those colleagues can be individually liable for losses that follow, including loss of earnings. In this case, the directors were party to the decision to dismiss and their actions in dismissing were motivated by the claimant's protected disclosures. There were therefore personally liable along with the employer for Mr Osipov's substantial losses due to the dismissal.
It is important that employees and officers of an organisation are aware that whistleblowing detriment claims can be brought against them personally. Those responsible for dismissal decisions may be found to have personal liability for losses relating to that dismissal. This is similar to discrimination claims, where individuals can find themselves named as individual respondents.
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