The Court of Appeal upheld the decisions of the employment tribunal and employment appeal tribunal that a whistleblower's colleagues can be personally liable for dismissal-related detriments and the losses flowing from the dismissal.
This comes as attitudes towards whistleblowing are changing, as demonstrated by YouGov's research into public attitudes. Its most recent research, conducted this year, found that 84% of respondents would be willing to raise concerns at work. It also found that 38% of respondents were aware of whistleblowing issues. This has increased year on year.
What protections are afforded to whistleblowers?
The Public Interest Disclosure Act 1998 (PIDA) amended the Employment Rights Act 1996 (ERA) by introducing two stages of protection for whistleblowers. It is unlawful for an employer, its staff or agents to subject a worker to a detriment because they have made a protected disclosure. For example: subjecting a whistleblower to disciplinary action, failing to promote, or bullying and harassing a whistleblower. In addition, the dismissal of an employee will be automatically unfair if the reason, or one of the principal reasons, for the dismissal was because of a protected disclosure. Significantly, unlike with 'ordinary' unfair dismissal claims no qualifying period of service is needed.
How does an individual qualify for this protection?
To gain protection a whistleblower must make a 'qualifying disclosure'. This is the disclosure of information but does not need to be new information. It can also be a number of communications that together amount to a qualifying disclosure. This must relate to either: a criminal offence, a breach of a legal obligation, a miscarriage of justice, a danger to the health and safety of any individual, damage to the environment, or the deliberate concealing of any of these matters.
The whistleblower must hold the reasonable belief that the disclosure relates to one of the six types of wrongdoing, and that the disclosure is in the public interest.
There is no requirement for the disclosure to be made to the employer, but this is encouraged. The disclosure can be made to certain external parties, for example prescribed persons such as HMRC and the Health and Safety Executive, and will be protected in limited circumstances.
Why is it important?
Whistleblowers play an important role not only in controlling internal risks, but also in helping to avoid litigation and limiting reputational damage when disclosures are made internally.
The consequences of a successful whistleblowing claim can be severe, not only because of the reputational damage to the employer but also financially. There is no cap on the amount of compensation that can be awarded.
What can employers do?
While an employer is not under any obligation to encourage whistleblowing, for the reasons stated above it is in an employer's interests to have effective procedures in place to deal with protected disclosures. This could include:
- A clear and easily accessible whistleblowing policy
- Guiding employees on the internal process to follow when making a protected disclosure
- Training senior staff on how to deal with a protected disclosure and on the consequences of victimising a whistleblower
- Encouraging an open and transparent culture where staff feel able to make protected disclosures without fear of repercussions
- Protecting the identity of those making protected disclosures
- Promptly investigating any protected disclosures made
- Providing confidential support and a counselling helpline for whistleblowers.
By having these measures in place the employer conveys the importance it attaches to identifying and dealing with any wrongdoing. It also encourages employees to raise concerns internally, thus limiting the employer's exposure to negative publicity.
It could also assist an employer defending a whistleblowing claim. An employer can be held vicariously liable for the detriment experienced by their employees. It will however have a possible defence if it can demonstrate that it took all reasonable steps to prevent the detrimental treatment.
Can employees be personally liable?
Yes. Individuals could always be personally liable for detrimental treatment but the Court of Appeal decision in Timis and another v Osipov extends that liability. In this case two directors who had made the decision to dismiss Mr Osipov had subjected him to a detriment by their conduct. While only the employer could be liable for the unfair dismissal itself, the directors were jointly and severally liable for the loss suffered as a result of the dismissal. This amounted to nearly £2 million.
As the employer was insolvent, establishing the directors' personal liability was essential for Osipov in recovering his financial losses and both directors had directors and officers liability insurance.
The decision serves as a warning to both employers and employees and highlights the importance of comprehensive and effective whistleblowing procedures.
Rajiv Joshi is a partner in the Blake Morgan employment team
