Before considering the complexities of the case it is worth re-visiting the key sections of the Employment Rights Act ("ERA"). Section 47B(1A) of the ERA allows workers to bring claims against co-workers when they have been subjected to any detriment by any act or omission by the co-worker on the ground that they have made a protected disclosure. Section 47B(1B) ERA also allows a claim to be brought against the employer on the grounds of vicarious liability. Section 103 ERA allows employees to bring unfair dismissal claims against their employer where it is alleged that the reason or principal reason for the dismissal is the fact that the employee has made a protected disclosure.
Mr Osipov was employed by International Petroleum Limited ("IPL") and appointed to the position of Chief Executive Officer by Mr Timis. Mr Osipov made four protected disclosures. Some three days after the final disclosure Mr Sage, on the instruction of Mr Timis, sent Mr Osipov an email dismissing him with immediate effect. Mr Timis and Mr Sage were both directors of IPL.
The Employment Tribunal
Mr Osipov successfully argued that he had been automatically unfairly dismissed pursuant to section 103 ERA. The Tribunal found that the principal reason for the dismissal was the fact that Mr Osipov had made protected disclosures.
Mr Osipov was also successful with his detriment claim under section 47B(1A) against Messrs Timis and Sage. IPL and Messrs Timis and Sage were held to be jointly and severally liable for losses flowing from Mr Osipov's dismissal, amounting to £1,744,575.56.
IPL and Messrs Timis and Sage appealed to the Employment Appeal Tribunal ("EAT").
IPL's arguments that the disclosures were not protected and that they were not the reason for the detriment and dismissal were rejected.
Messrs Timis and Sage centred their argument around section 47B(2) ERA. This section provides that a detriment which "amounts to dismissal" should be dealt with under section 103 ERA as a claim of unfair dismissal against the employer. The appellants argued that individuals should not be liable for dismissal as the correct recourse is clearly section 103 ERA. The appellants also argued that their liability should be limited to pre-dismissal detriments.
The EAT dismissed the appeal and found there was no reason to exclude from individual liability detriments amounting to the termination of the working relationship. Messrs Timis and Sage appealed to the Court of Appeal.
Court of Appeal
The Court of Appeal dismissed the appeal, stating "co-workers whose unlawfully motivated acts short of dismissal which caused a worker to be dismissed would be liable for those acts". The Court of Appeal considered the apparent restriction under section 47B(2)ERA and decided that it would be wrong to interpret this section as preventing an individual from bringing a claim against a co-worker based on the detriment of the dismissal.
The Court stated that it is open to an employee to bring a claim of vicarious liability for that act against the employer. All section 47B(2) ERA excludes is a claim against the employer in respect of its own act of dismissal.
The Court of Appeal went on to rule that section 47B(2) ERA 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 decision should be noted by employers and senior managers who will be concerned about personal liability. With no statutory cap in place for whistleblowing claims, the figures involved in a successful claim are often significant.
This case serves as a reminder to employees of the benefit of pursuing both section 47B and section 103 ERA claims. Employers should be pro-active and take all reasonable steps to ensure their workforce do not subject their co-workers to whistleblowing detriments. Whistleblowing policies and training for employees are two basic, but essential, steps in the right direction. Clear lines of reporting on protected disclosure should be established and promoted by the senior leadership.