Alexander Barnett v H & H Gelato Limited & Ors

Where a deposit order concerns claims founded on separate alleged detriments, the Employment Tribunal must assess each discrete strand and give reasons which reveal the logical basis for finding that it has little reasonable prospect of success. A conclusion that an alleged breach of confidentiality is implausible requires an intelligible explanation, particularly where the alleged subsequent comments could themselves be prima facie evidence of such a breach.

A claim based on a franchisor’s failure to investigate also requires a tenable basis for treating the franchisor as the employer’s authorised agent. For automatic unfair dismissal, a substantial competing reason for resignation and a resignation letter inconsistent with acceptance of a repudiatory breach may justify a deposit order, even though the claim could ultimately succeed.

The appellant, a shift leader, complained to the franchisor about alleged conduct by the owner and manager of his employer. He requested confidentiality. He alleged that a manager later made comments showing knowledge of the complaint, and that the franchisor failed to investigate it.

At a preliminary hearing, the Employment Tribunal ordered him to pay deposits of £100 to continue claims for protected-disclosure detriment, victimisation and automatic unfair dismissal. The Tribunal found that the protected disclosure itself had reasonable prospects, but considered the remaining elements weak.

The appeal challenged the Tribunal’s treatment of the alleged comments, the failure to investigate, and the asserted connection between the protected disclosure and the appellant’s resignation.

1. Appeal allowed in part. The Employment Tribunal’s deposit order was inadequately reasoned insofar as it covered the protected-disclosure detriment and victimisation strands founded on the manager’s alleged comments. That part of the application was remitted.

2. Under Rule 39 of the Employment Tribunal Rules, the question is whether a specified allegation has little reasonable prospect of success. It requires a nuanced assessment. The Appeal Tribunal will be slow to interfere with factual or legal inferences, but may review their logical basis and must ensure that adequate reasons have been given.

3. The first alleged detriment generated two separate strands: protected-disclosure detriment and victimisation. Each required consideration of whether the comments were made, whether they were a detriment, and whether the protected disclosure had more than a trivial influence on their making. The Employment Judge’s reasons did not identify clearly which element lacked prospects. Although it was logical to regard the alleged comments as inexplicable without a breach of confidentiality, the reasons did not explain why the alleged breach itself was implausible. If the comments were made, they could be prima facie evidence of that breach.

4. The deposit order was nevertheless upheld for the two strands based on the franchisor’s alleged failure to investigate. To hold the respondents liable for that omission, the claimant needed a tenable case that the franchisor acted as agent for, and with the authority of, the employer or manager under Employment Rights Act 1996, section 47B. A confidentiality breach did not logically support that agency inference. The Employment Judge was entitled to find the agency allegation implausible, given the alleged comments and the franchisor’s relative power.

5. The automatic unfair dismissal deposit order was also upheld. The pleaded case showed that the resignation could have been motivated by pre-disclosure conduct as well as matters arising from the disclosure. The protected disclosure could therefore not realistically be the sole reason. The competing reason and the resignation letter’s absence of any suggestion that the employee was accepting a repudiatory breach were powerful factors supporting a finding of little reasonable prospect.

6. The application concerning the first-detriment strands was remitted to Employment Judge Russell to decide whether a deposit order should be made and, if so, on what terms and with what reasons.

• Employment Appeal Tribunal: allowed the appeal to a limited extent and remitted the deposit-order application concerning the first alleged detriment: [2024] EAT 62.
• Employment Tribunal: at a preliminary hearing on 11 November 2022, Employment Judge Russell ordered deposits of £100 for each of the protected-disclosure detriment, victimisation and automatic unfair dismissal claims.