Timis & Anor v Osipov & Anor

An employee may claim under section 47B(1A) of the Employment Rights Act 1996 against an individual co-worker who participated in a whistleblowing dismissal. Section 47B(2) excludes only a claim against the employer for its own act of dismissal. The employer may also incur vicarious liability under section 47B(1B).

A distinct earlier act of whistleblowing detriment may support compensation for losses caused by a consequential dismissal. The ordinary rules on causation, remoteness and contingencies apply. More than one person may participate in a dismissal decision; the leading role of one decision-maker does not necessarily absolve another who agreed with and implemented the decision.

The claimant was chief executive of International Petroleum Ltd. An employment tribunal found that the company had automatically unfairly dismissed him for making protected disclosures. It also found that two directors had subjected him to unlawful whistleblowing detriment through their conduct in procuring and effecting the dismissal. The directors and the insolvent company were held jointly and severally liable for compensation exceeding £2 million.

The Employment Appeal Tribunal substantially upheld the award, although it excluded the basic award from the directors’ liability. The directors appealed. The principal issue was whether section 47B(2) of the Employment Rights Act 1996 prevented individuals from being liable for the detriment of dismissal or for dismissal losses caused by an earlier unlawful detriment. A secondary issue concerned whether the second director had participated sufficiently in the dismissal decision.

1. Appeal dismissed. Section 47B(2) of the Employment Rights Act 1996 did not prevent the claimant from proceeding against the directors under section 47B(1A) for their responsibility for the dismissal itself. The exclusion preserves the division between Parts V and X only where the identical remedy is available under Part X. It excludes a claim against the employer for its own act of dismissal, but does not exclude the distinct statutory liability of a co-worker who participates in that dismissal. The employer may consequently incur vicarious liability under section 47B(1B): paras 67–78, 91.

2. That construction produced the more rational and coherent statutory scheme. Parliament could not sensibly have intended a co-worker to be liable where an unlawful preliminary act caused dismissal, yet immune where the co-worker personally participated in the dismissal decision. Nor was there a principled reason to place dismissed employees in a worse position than workers who lacked Part X rights. The differences between Part V and Part X concerning causation, injury to feelings, reinstatement and the reasonable-steps defence did not justify the contrary construction: paras 68–76.

3. Section 47B(2) also places no barrier in the way of compensation for dismissal losses caused by a distinct earlier whistleblowing detriment. The detriment constituting the cause of action must be distinguished from the loss flowing from it. Recovery remains subject to the ordinary rules of causation, remoteness, mitigation and discounting for contingencies, including the possibility that the employment would have ended in any event: paras 79–84, 91.

4. The employment tribunal was entitled to find both directors liable. A dismissal decision may have more than one participant. Although the first director was the prime mover, the second discussed the proposed dismissal with him, agreed to it and implemented it. The first director’s leading role did not prevent the second from being a party to the decision or from sharing the prohibited motivation: paras 92–99.

Rafferty LJ and Sales LJ agreed with Underhill LJ: paras 100–102.

1. Court of Appeal (Civil Division): By [2018] EWCA Civ 2321, dismissed the directors’ appeal and upheld their liability for the dismissal losses.

2. Employment Appeal Tribunal: Simler P substantially dismissed the directors’ appeals. She held that they were jointly and severally liable for the compensatory losses, but not for the basic award available only against the employer.

3. Employment Tribunal: Found that the company had automatically unfairly dismissed the claimant for making protected disclosures and that the directors had subjected him to unlawful whistleblowing detriment. It imposed joint and several liability for the resulting compensation.