UK: Direct Line To Remedy For Whistleblowers – Co-Workers Could Be On The Hook And It Won't Be Cheap! (UK)

Last Updated: 13 November 2018
Article by Hannah Field

Admittedly, an employee is more likely to bring a claim against their employer; after all, usually it is the one with the cash. But as last month's case of Timis and another v Osipov shows, that need not always be the case.

Mr Osipov was the CEO of International Petroleum Ltd (IPL). He made a number of protected disclosures generally related to corporate governance and compliance with foreign law and was later dismissed, the principal reason for which (the Employment Tribunal ruled) was that he had made those disclosures. In other words, he was sacked for blowing the whistle and was therefore found automatically unfairly dismissed.

Osipov brought claims in the Employment Tribunal against not only IPL but also two non-executive directors who were instrumental in his dismissal: Mr Timis (the decision-maker) and Mr Sage (who pulled the trigger). Not only did the Tribunal find that Osipov had been unfairly dismissed by IPL, but it also found that Timis and Sage had subjected him to a detriment by their conduct in relation to the dismissal. They were held jointly and severally liable with IPL for compensation amounting to a whopping £2 million. ["Joint and several" in this context meant that if for any reason IPL could not pay, Timis and Sage were on the hook for the full amount.] That was a real risk, as IPL was by then insolvent. But can individuals be liable for losses arising from what is essentially a corporation action, i.e. the dismissal especially, as here, if they are non-execs? After all, an individual who is not the employer cannot be held liable for unfair dismissal even if it was entirely his doing. However, Osipov sued them not for unfair dismissal (for that reason) but for subjecting him to a detriment for whistleblowing under s47B Employment Rights Act 1996.

The case made its way up to the Court of Appeal where the two directors' arguments lay in the wording of section 47B(2) Employment Rights Act 1996. This provision excludes detriment claims where "the detriment in question amounts to a dismissal". In such circumstances, they said, the correct course of remedy was a claim for unfair dismissal, which could only be brought against an employer. Sage also argued that in any event, he couldn't be liable in relation to any instruction to dismiss Osipov because it was Timis who made the decision and gave the instruction and he had merely obeyed.

Nice try. The Court of Appeal ruled that an employee is free to bring a claim for detriment against an individual co-worker for subjecting them to the detriment of dismissal. All that section 47B(2) excludes is a claim against the employer in respect of its own act of dismissal because that is dealt with in the automatic unfair dismissal provisions at s.103A. To conclude otherwise would not only make the scheme of protection for whistleblowers less effective than for victims of other kinds of discrimination and victimisation, but would also produce an incoherent and unsatisfactory result, it said.

The Court also made it clear that section 47B(2) "places no barrier to recovery of compensation for losses flowing from a dismissal which was itself caused by a prior act of whistleblower detriment". This means that losses flowing from an act of detriment may include those stemming from a causally-connected subsequent dismissal.

As for the assertion that Sage was only the mouthpiece in dismissing Osipov, the Court of Appeal rejected this submission on the facts and emphasised that it is not uncommon for more than one person to be involved in a decision to dismiss. One person may take a more prominent role but that doesn't diminish the responsibility of the other participants.

Timis and Sage had the benefit of director's liability insurance, but that won't be true for all individuals held personally liable. There may be less incentive for bringing such substantial claims against co-workers without insurance, but it is important to note the potential exposure here for less senior employees too.

Lessons for Employers

  • If any steps need to be taken in respect of an employee who has made a protected disclosure, for example, performance management or unrelated disciplinary proceedings, ensure they are handled with care, well documented by those involved and that the reasons for such actions are set out clearly. The best defence is to show that the reason for the detrimental action taken by management or HR is unrelated to the disclosure.
  • The findings against Sage were made because it was held that he was (a) involved in making the decision to dismiss and (b) aware that it was in response to Osipov's disclosures. This case does not pose a threat to individual managers and HR staff carrying out dismissals on the instruction of more senior executives where they have no role in the decision and no knowledge of the real reason for the termination.
  • The case does however up the stakes for small businesses where the manager is in effect (though not legally) the employer. They will no longer have the ability to incur substantial liabilities for a whistleblowing dismissal but escape personal exposure by letting their company take the hit and/or go into liquidation.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions