Can dismissing officers be held personally liable for dismissal in whistleblowing claims? Yes, held the Court of Appeal in a landmark Judgment handed down yesterday afternoon, 19 October 2018, in the case of Timis and Sage v Osipov EWCA Civ 2321.
The Judgment effectively means that a claim for whistleblowing related dismissal can be brought as: (A) an automatic unfair dismissal claim against the employer (who is vicariously liable for its workers) and; (B) as a whistleblowing detriment claim against the individual decision makers personally. A detriment claim entitles a Claimant to claim compensation for “injury to feelings”, which is not applicable in a straight unfair dismissal case. The result of the Court of Appeal decision is that we could find more claims being brought against individual decision makers, like the Non-Executive Directors (“NED”s) in the Opisov case; for tactical reasons and to secure compensation awards against both the decision makers and the employer.
Mr Opisov, Chief Executive Officer of International Petroleum Limited (“IPL”), was dismissed without notice following disclosures by him about issues relating to corporate governance. Two NEDs at IPL played key roles in the decision to dismiss Mr Osipov.
Mr Opisov brought a successful whistleblowing claim for detriment and unfair dismissal in the Employment Tribunal against IPL and both NEDs. He was awarded over £1.7 million as compensation. The Judgment found that the NEDs were jointly and severally liable for the substantial damages award, along with the employer IPL.
The two NEDs appealed to the EAT. They argued that they should not be held personally liable for the detriment of dismissal and that the claim could only be pursued against the employer, IPL. They also argued that any compensation should be limited to losses pre-dismissal. The EAT rejected their arguments and upheld the Tribunal’s original decision. It held that the NEDs, as managers who had played important roles in the decision to dismiss Mr Opisov, were liable personally. It also found that Mr Opisov could claim post dismissal losses flowing from his dismissal. The NEDs appealed again, to the Court of Appeal.
The Court of Appeal has upheld Mr Opisov’s claims, agreeing with the EAT. It was noted that, for example, individual liability is already in place for discrimination claims under the Equality Act 2010, where dismissal is on the ground of a protected characteristic.
What does it mean?
The Osipov decision may be further welcome news for employees, confirming that claims can be brought against individual decision makers in respect of whistleblowing-related dismissals, on the basis that they have personal liability.
The case illustrates significant risks for employers, which should be taken into account. A claim for whistleblowing detriment can include dismissal and result in significant awards of compensation. Given this increased risk of claims (against individuals who the employer is vicariously liable for), employers should ensure that they have appropriate whistleblowing policies in place and that decision makers are well trained to recognise whistleblowing issues and to deal effectively with whistleblowing allegations.