N Hall v Paragon Finance PLC

The Employment Appeal Tribunal considered an appeal from an Employment Tribunal refusal of an interim relief application under section 128 of the Employment Rights Act 1996 in a claim of automatic unfair dismissal for making protected disclosures. The ET had evaluated three alleged disclosures (PD1, PD2 and PD3) and concluded the claimant was unlikely to establish PD1 or PD2, but likely to establish PD3; it then found the claimant was unlikely to show PD3 was the reason for dismissal because the respondent had pre-existing concerns about the claimant’s conduct and acceptance of guidance. The EAT held that the ET’s reasoning in respect of all three disclosures failed to engage properly with the parties’ cases and could not stand, because the ET misunderstood the focus of the dispute over PD1 and PD2 and misrecorded the claimant’s case about regulator advice relevant to PD3. However, the EAT upheld the ET’s summary assessment on causation, concluding that the ET permissibly found there was a history of conduct concerns predating or independent of the disclosures so that, even if PD1 and PD2 were qualifying disclosures, the claimant did not show he had a pretty good chance of proving dismissal was for the sole or principal reason of a protected disclosure.

This was an appeal against an Employment Tribunal decision refusing an application for interim relief under section 128 Employment Rights Act 1996 in a claim of automatic unfair dismissal for making protected disclosures (whistleblowing). The claimant (an internal auditor employed from 30 May 2022 to 22 February 2024) relied on three disclosures: PD1 (3 February 2023) relating to accounting standards and a possible material misstatement in financial statements; PD2 (25 May 2023 and following months) relating to an alleged IT security/user account issue discovered in an audit; and PD3 (10 July 2023) being a written whistleblowing grievance to the whistleblowing committee which incorporated earlier concerns and referred to professional ethical codes and the ACCA.

The ET, sitting without oral evidence on an expedited interim hearing, concluded it was not likely (i.e. did not have a 'pretty good chance') the claimant would establish he had made a disclosure for PD1 and PD2, but concluded he had a pretty good chance on PD3 and that PD3 tended to show a failure to comply with a legal obligation (data protection law). The ET then held the claimant was unlikely to show causation because the respondent had earlier concerns about the claimant’s conduct and willingness to accept guidance.

The EAT considered (i) whether the ET had properly characterised the dispute on PD1 and PD2, (ii) whether the ET had wrongly recorded the claimant’s dealings with a regulator as supporting PD3, and (iii) whether the ET’s causation finding should be revisited if PD1 and PD2 were found to be qualifying disclosures. The EAT emphasised the summary and impressionistic nature of interim relief decisions but found the ET had in several respects failed to engage with the parties’ actual cases. In particular, the ET had treated PD1 and PD2 as if the respondent disputed that any disclosure had been made rather than focusing on whether the disclosures were qualifying; and the ET had mischaracterised the claimant’s evidence about regulator advice in relation to PD3. Those errors undermined the ET’s conclusions on the three disclosures. The EAT nevertheless concluded that the ET’s interim assessment on causation was permissibly open to it because the ET had had regard to a broader history of conduct concerns predating or independent of the disclosures and had applied the separability principle (Kong) at the required summary standard.

Relief sought: interim relief under s128 ERA (reinstatement pending a final hearing). Issues before the court: whether the ET erred in characterising the dispute on qualifying disclosures, whether it misapplied factual findings about regulator advice, and whether its causation assessment was legally flawed. Reasoning: the EAT quashed the ET’s findings on the three disclosures for failure to engage with the parties’ cases and mischaracterisation of the evidence, but upheld the ET on causation after analysing the ET’s reliance on a history of conduct concerns and the appropriate standard on an interim relief application.

The Employment Appeal Tribunal dismissed the claimant’s appeal but allowed the respondent’s cross-appeal. The EAT held that the Employment Tribunal’s findings on whether the claimant had made qualifying disclosures (PD1, PD2 and PD3) were unsafe because the ET had misunderstood or failed to engage with the parties’ cases (including misrecording the claimant’s account of regulator advice), but that the ET’s summary conclusion on causation was permissibly open to it at the interim stage because it had taken into account a broader history of concerns about the claimant’s conduct predating or separable from the disclosures.

This is an appeal to the Employment Appeal Tribunal from an Employment Tribunal decision (Employment Judge Wedderspoon sitting alone at Birmingham on 13 March 2024, reasons sent 14 March 2024) refusing interim relief under section 128 ERA. Permission to pursue the appeal was granted by Deputy High Court Judge Matthew Gullick KC. The EAT handed down this judgment on 21 November 2024, neutral citation [2024] EAT 181.