Key takeaways

Pending any appeal to the Supreme Court, the position remains that:

• A dismissed whistleblowing employee can bring an automatically unfair dismissal claim against their employer. This requires them to show that the whistleblowing was the sole or principal reason for dismissal.
• They may also claim for the detriment of dismissal against the dismissing manager (personal liability) if the dismissal was on the grounds of the whistleblowing.
• In addition, they can bring the same detriment of dismissal claim against the employer on the basis of vicarious liability. This is so even if the claimant has not issued proceedings against the dismissing manager in their personal capacity.

It is advantageous to bring both sets of claims because of differences in causation thresholds and remedies (see below).

In practical terms, where organizational size and resources permit, employers should seek to ensure that different managers deal with whistleblowing disclosures and with other processes involving the whistleblower (e.g., performance, disciplinary or restructuring). Doing so will be to the benefit of both the organization and managers in defending potential claims down the line. As ever, it will also help to have clearly documented decisions.

In more detail

In the combined cases of Rice v. Wicked Vision Ltd; Barton Turns Developments Ltd v. Treadwell, the Court of Appeal had to consider the interplay between detriment and unfair dismissal claims.

Legal background

A whistleblowing employee has two potential heads of claim against their employer under the Employment Rights Act 1996:

• Detriment, on the grounds that they blew the whistle (Part V of the Act).
• Automatic unfair dismissal, if the sole or principal reason for dismissal is that they have blown the whistle (Part X of the Act).

A whistleblowing employee can also bring a detriment claim against a coworker in their personal capacity, and the employer will ordinarily be vicariously liable for this claim too (subject to a reasonable steps defense).

The legislation contains a demarcation provision when it comes to dismissal. It states that an employee cannot bring a detriment claim if “the detriment in question amounts to dismissal (within the meaning of Part X)” — s.47B(2) of the Act. Those types of claims have to be brought as an unfair dismissal claim.

The issue in this case was whether this demarcation also captures dismissal-related detriment claims against coworkers in their personal capacity and, in particular, an employer’s vicarious liability for such a claim.

The case of Timis and Sage v. Osipov in 2018 had seemingly already answered this question. In that case, the Court of Appeal decided that a dismissing manager could be personally liable for their part in deciding to dismiss a whistleblower: the “detriment of dismissal.” The court in Osipov considered that this was conceptually different to a dismissal “within the meaning of Part X” and so was not excluded by the demarcation provisions in s.47B(2).

Osipov also envisaged that employer vicarious liability would follow. However, importantly, vicarious liability was not expressly in issue in that case. This gave rise to the two current cases, where the employers sought to argue that the demarcation provisions in s.47B(2) did exclude vicarious liability. The employment tribunals and Employment Appeal Tribunal (EAT) reached different conclusions and the cases were therefore combined to be heard in the Court of Appeal.

Decision

The Court of Appeal in these cases decided that the previous Court of Appeal decision in Osipov did cover employer vicarious liability and that the decision was binding (under the doctrine of precedent). This meant that the vicarious liability claims against the employers for the detriment of dismissal could proceed.

However, the court also said it would have departed from the Osipov decision if it had been free to do so, as it disagreed with its interpretation of the legislation. It has invited a further appeal to the Supreme Court to resolve the issue.

The court gave a full explanation for its disagreement. In summary, it did not think that it is possible to split a decision to dismiss into (a) a personal decision by the dismissing manager and (b) a decision of the employer, acting through the dismissing manager. The court saw no real difference between the two. The court also reviewed the whole structure of the Employment Rights Act 1996 and noted that it has long retained a distinction between detriment and unfair dismissal claims, and that there are also demarcation provisions in other parts of the Act (for example, claims about detriment or unfair dismissal following a flexible working request). It followed that the court would have held that s.47B(2) should exclude detriment of dismissal claims; both against the dismissing manager in their personal capacity and against the employer by way of vicarious liability.

Differences between detriment and unfair dismissal claims

It is advantageous for a whistleblower claimant to be able to bring both a detriment of dismissal claim and an automatically unfair dismissal claim because the two have different causation thresholds and remedies.

Causation: broadly speaking, there is a lower threshold for detriment claims. The claim will be successful if the whistleblowing materially influenced (in the sense of being more than a trivial influence) the employer's treatment of the whistleblower. In contrast, an automatically unfair dismissal claim requires the whistleblowing to have been the sole or principal reason for dismissal.

Remedies:

Other points to note

The case law described in this alert only concerns employees. Workers can also bring whistleblowing claims, all of which are channeled as detriment claims; nonemployees cannot claim unfair dismissal.

In a claim against a dismissing manager, the tribunal must assess their personal motivation. Another recent case has confirmed that you cannot attribute someone else’s whistleblowing-related motivations to an otherwise innocent dismissing manager — Henderson v. GCRM Ltd, EAT. It is different when it comes to the employer’s organizational liability in an unfair dismissal claim. In that claim, the employer can be liable in circumstances where an innocent decision-maker has been manipulated by somebody senior in the management hierarchy who had a hidden whistleblowing-related pretext for engineering the dismissal (e.g., manufactured supposed performance concerns) — Royal Mail Group v. Jhuti (2019), Supreme Court.