Royal Mail Ltd v Jhuti

The Court of Appeal allowed the employer's appeal against the Employment Appeal Tribunal's extension of liability for automatic unfair dismissal under section 103A of the Employment Rights Act 1996. The court held that, for the purpose of deciding the "reason for the dismissal" under section 103A (and, by parity of reasoning, section 98), the relevant mental processes are those of the person or persons authorised and deputed to make the dismissal decision. The court applied the principle in Orr v Milton Keynes Council that the employer's reason is ordinarily the state of mind of the delegated decision-maker, not that of other managers whose misconduct may have tainted the process.

The court recognised limited exceptions where the motivation or conduct of another manager might be attributed to the employer (for example, where that other manager had a formal investigatory role or where the decision-maker was a mere sham). It also held that the claimant was not prevented from seeking compensation for losses caused by her dismissal as part of an award for unlawful detriment under section 47B, so long as causation and remoteness were established.

Background and parties: The claimant, Ms Kamaljeet Jhuti, a MarketReach media specialist, made protected disclosures about alleged misuse of "tailor-made incentives". She alleged she suffered detrimental treatment by her line manager, Mr Widmer, and was ultimately dismissed after a decision by a different manager, Ms Vickers. The Employment Tribunal found protected disclosures and unlawful detriments by Mr Widmer but held the dismissal decision-maker (Ms Vickers) genuinely and reasonably believed the claimant was a poor performer, so the section 103A claim failed. The Employment Appeal Tribunal (Mitting J) allowed the claimant's cross-appeal on the basis that the line manager's unlawful motivation should be treated as the reason for dismissal. Royal Mail appealed to the Court of Appeal.

Nature of the claim / relief sought: Claims in the Employment Tribunal for detriment contrary to section 47B of the Employment Rights Act 1996 and for "automatic" unfair dismissal under section 103A. The claimant sought compensation including career-loss earnings attributable to the dismissal.

Issues framed:

• Whether the unlawful motivation of a manager who produced misleading material could be attributed to the employer so as to make the dismissal automatically unfair under section 103A.
• Whether losses caused by dismissal could be recovered as compensation for unlawful detriments under section 47B notwithstanding section 47B(2).
• How the approach in Orr v Milton Keynes Council and related authority applies to attribution of reason and knowledge for dismissal decisions.

Court's reasoning and conclusions: The Court of Appeal held that the correct starting point is the language of section 103A and the established two-stage test in section 98: (1) identify the reason (a subjective inquiry into the decision‑maker's motivation) and (2) assess reasonableness. The court followed Orr, concluding that ordinarily only the mental processes of the person deputed to make the dismissal decision are relevant when identifying the employer's reason. Mitting J's broader attribution approach was not sustainable except in limited circumstances (for example where the other manager had an investigatory role in the decision-making process or the decision-maker was a sham). The court allowed Royal Mail's appeal on the section 103A point but declared that the claimant was not precluded from seeking compensation for dismissal losses as part of the remedy for unlawful detriment under section 47B, subject to causation, remoteness and any time‑limit or pleaded‑case issues to be determined at remedy or by the EAT if necessary.

Wider context: The judgment emphasises the distinction between detriment and dismissal remedies in the whistleblowing provisions, highlights anomalies created by that division, and confirms limits on attributing rogue managers' motivations to employers while recognising routes for compensating consequential dismissal losses.

Appeal allowed. The Court held that when determining the "reason" for dismissal under section 103A (and for the purpose of section 98) the tribunal must focus on the mental processes of the person or persons authorised and deputed to make the dismissal decision. The motivation of other managers is not to be attributed to the employer except in limited circumstances (e.g. where they had a formal investigatory role or where the decision-maker was a sham). The claimant was, however, not precluded from pursuing compensation for dismissal losses as part of compensation for established unlawful detriments under section 47B, subject to causation and other legal limits.

Employment Tribunal (London Central) – liability hearing: judgment sent 11 November 2015 (Employment Judge Baty) – found protected disclosures and unlawful detriment but rejected section 103A claim. Appeal to Employment Appeal Tribunal (Mitting J) – allowed claimant's cross-appeal on section 103A. Further appeal to the Court of Appeal – [2017] EWCA Civ 1632 (this judgment).