Case update (2): Whistleblowing – can an individual be liable?

Summary: Can individual workers can be liable for a whistleblowing dismissal?

Yes, held the EAT in Timis & Anor v Osipov & Anor available here.

Background:  Since 2013, whistleblowers have had the right to bring a claim directly against their co-workers if subjected to a detriment other than dismissal itself.

Dismissal and detriment are treated differently in the legislation. Only employees can claim unfair dismissal, yet whistleblowing protection is wider than this and offers protection to the broader category of workers who suffer detrimental treatment because of blowing the whistle.

The protection from detrimental treatment also offers a successful claimant compensation for injury to feelings, but appears to exclude co-worker liability in a situation where the detriment amounted to a dismissal. The Court of Appeal was asked in this case to decide whether claims could only be brought against co-workers in relation to detriment short of dismissal – or did it extend to the act of dismissal?

Facts:  Mr Osipov was the CEO of International Petroleum Ltd (IPL), an oil and gas exploration company operating in Niger in June 2014. Within days of joining IPL, Mr Osipov discovered serious wrongdoing by senior employees and made a number of protected disclosures about corporate governance and compliance with local law.

Mr Osipov was subsequently dismissed by two of IPL’s non-executive directors, Mr Timis (the largest individual shareholder) and Mr Sage (the Chairman).  Mr Osipov brought Tribunal claim for automatic unfair dismissal and detrimental treatment under the whistleblowing legislation.

The Tribunal found Mr Osipov had been automatically unfairly dismissed because he was a whistleblower and that he had suffered detriments by his treatment by the two non-executive directors. The Tribunal awarded compensation for injury to feelings against all three parties who were held to be jointly and severally liable.

IPL became insolvent and Mr Osipov sought to enforce the judgment against Mr Timis and Mr Sage, the non-executive directors. Mr Timis and Mr Sage appealed to the EAT, on a number of grounds including that they should not have been made liable for the losses flowing from the dismissal. The non-executive directors argued that a “detriment” under whistleblowing legislation specifically excludes detriments amounting to dismissal and that unfair dismissal claims relating to whistleblowing can only be brought against an employer and not named individuals (as with all unfair dismissal claims).

The EAT rejected the appeal and upheld the Tribunal’s finding that the non-executive directors were jointly and severally liable for nearly £1.8 million. Mr Timis and Mr Sage appealed to the Court of Appeal.

The Court of Appeal had to decide whether the drafting of the whistleblowing legislation means that claims against individual co-workers can only be brought in relation to claims of detriment falling short of dismissal, or whether claims can be brought against co-workers for the dismissal. In reviewing the wording of the whistleblowing law and its purpose, the Court of Appeal explained that, although the law’s wording was not very clear, once Parliament had made the decision to make co-workers personally liable for whistleblower detriment, it was difficult to see why this should not be intended to extend to cases where the detriment amounted to dismissal.

The Court of Appeal dismissed the appeal and the non-executive directors were confirmed as jointly and severally liable for nearly £1.8 million.

Implications: This is believed to be the first case in which an individual has been held liable for dismissal-related claims brought as a detriment claim.  It is also an unusual case as on most occasions there would be a solvent employer to pursue for compensation.  However, this decision might encourage whistleblowers to pursue dismissal-related claims against both their employer and against the dismissing manager (as often occurs in discrimination claims).  Particularly as with detriment claims it is possible to claim an additional award for injury to feelings.

Large sums of money were involved in this case as there is no statutory cap in compensation for injury to feelings and this should remind employers of the need to have robust safeguards in place to avoid such liability.

Employers should be proactive to ensure they have taken all reasonable steps to prevent their workers from subjecting co-workers to whistleblowing detriment. This could include:

• putting in place systems to identify potential protected disclosures at an early stage so that they can be properly managed and addressed;
• training to increase management awareness of the potential risks and ensuring robust whistleblowing polices are implemented; and
• training decision makers on the rights of whistleblowers, including how to spot and deal with whistleblowing allegations.