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Insight

Whistleblowing and personal liability – where are we now?

Nick Thorpe
21/09/2021

Locations

United Kingdom

It is well established that employers can be vicariously liable for acts done by their employees during the course of their employment, and this includes subjecting employees to a detriment for raising a protected disclosure. However, in 2013, protection for whistleblowers was extended to allow employees to bring claims directly against individual co-workers who subject them to a whistleblowing detriment. Case law has since highlighted the extent of this protection, as well as the potential costs that individuals may face if they subject a co-worker to a detriment for raising a protected disclosure.

As a general reminder, there are two types of claims in the Employment Tribunal that can be issued in relation to whistleblowing, these being (1) unfair dismissal and (2) detriment. A claim for unfair dismissal would apply where the individual claims that they have been dismissed for making a protected disclosure. A detriment claim on the other hand will usually apply where the individual alleges that they have been subject to some other form of detriment. In the latter case, if the claimant is an employee (rather than a worker) and the detriment suffered is their dismissal, they cannot bring a detriment claim against their former employer and must instead bring a claim for unfair dismissal. However, in the case of Timis v Osipov, it was held that individuals can be personally liable in a detriment claim when the detriment suffered is dismissal.

Mr Osipov was employed as the CEO of International Petroleum Ltd. He made a number of protected disclosures and was subsequently dismissed summarily by two non-executive directors (Mr Timis and Mr Sage). Mr Osipov brought a claim in the Employment Tribunal against International Petroleum Ltd for unfair dismissal, and a claim against Mr Timis and Mr Sage for detriment.

Mr Timis and Mr Sage argued that Mr Osipov could not bring a claim for detriment as he was an employee and the detriment complained of was dismissal. They sought to argue that the claim should be one of unfair dismissal only against International Petroleum. It was held by both the Employment Appeal Tribunal and the Court of Appeal that there is a difference between dismissal by an employer, and the detriment of dismissal caused by workers. Mr Osipov awarded £1.7m compensation for the loss arising from his dismissal, for which Mr Timis, Mr Sage and Petroleum Ltd were jointly and severally liable. In this case, the employer became insolvent, and Mr Osipov could therefore seek compensation from the two individuals directly.

More recently, in Heslop v Oxford Said Business School, Ms Heslop was found to have been unfairly dismissed and subject to whistleblowing detriments after raising concerns regarding Oxford University's leadership course, claiming that it had misled the government by plagiarising the course materials. Not only was Ms Heslop successful in her claims against the university, the Employment Tribunal also made findings of detriment against the business school's associate dean.  The Tribunal held that the university and the associate dean were jointly and severally liable for almost £1.5million of compensation, which included loss of earnings and injury to feelings.

It therefore appears that the Employment Tribunal is keen to make an example of individuals who subject co-workers to a detriment, and find in favour of a claimant where the detriment results from a protected disclosure. Compensation in detriment claims is not limited and is based on what the Employment Tribunal considers to be 'just and equitable in all the circumstances', and can also include compensation for injury to feelings as well as unlimited loss of earnings. Whether an individual will claim against their employer or the individual who subjected them to a detriment will depend on the circumstances of each case, and consideration may be given as to who has the deepest pockets.

What do these cases mean for employers and key decision makers?

  • Employers should ensure that senior managers and other appropriate individuals have been adequately trained on whistleblowing in the workplace, and that they are aware of the rights of individuals who make a protected disclosure. This will hopefully avoid both the employer and the individual being faced with potential whistleblowing claims.

  • When making a decision to dismiss, care should be taken to make clear the reason for the dismissal, demonstrating that it is in no way connected with any potential protected disclosure.

  • Consideration should be given as to whether director and officers liability insurance is required, and existing policies should be reviewed to ensure that liability for detriments in these circumstances is covered.
This Insight has been co-authored by Christina Georgiou, Senior Associate in the Employment, Pensions, Immigration and Compliance (EPIC) team.

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Areas of Expertise

Whistleblowing