Whistleblowing and Protected Disclosures: A tough lesson to learn

Whistleblowing and Protected Disclosures: A tough lesson to learn

Timis and Sage v Osipov (2018)
 https://www.bailii.org/ew/cases/EWCA/Civ/2018/2321.html

Alexander Osipov, the CEO of an oil exploration company (International Petroleum Ltd) was dismissed by company directors, Timis and Sage. Mr. Osipov took his dismissal to employment tribunal, believing he had been unfairly dismissed and victimised on the grounds of whistleblowing. Osipov was successful, with his dismissal found to be unfair under the Employment Rights Act, on the basis that it was a result of Osipov making protected disclosures – in other words, he was a whistleblower.

The Employment Tribunal also found that, as a result of the way in which Mr. Osipov had been treated in relation to his dismissal, Timis and Sage had, as individuals, brought about a detriment to Osipov - again under the Employment Rights Act - which refers to whistleblower detriment by individuals working for the same employer, as well as the employer itself. Thus Timis and Sage were found to be jointly liable, along with the company, for compensating Osipov. A significant award was made to Osipov of £1,744,575.56, which was later adjusted to £2,003,972.35 at Employment Appeal Tribunal.

Timis and Sage’s appeal to the EAT was based on an argument that the ET wrongly determined that compensation could be awarded against them as individuals as a result of Mr. Osipov’s dismissal, that such compensation could only be awarded as compensation for unfair dismissal and therefore only against the company, as only the employer can be liable for unfair dismissal. The decision made by the ET was upheld by the Employment Appeal Tribunal

In most discrimination cases, individual liability of any co-worker isn’t normally a consideration as the employer normally pays the full amount awarded. However, interestingly in this case, the company were insolvent and Osipov was seeking compensation directly from Timis and Sage.

The Court of Appeal then determined that the decision made by the EAT be upheld and that Timis and Sage were in fact individually liable for losses, as a result of the dismissal that they recommended.

Not only is this one of the largest awards made by an employment tribunal, it is also the first time that directors have themselves been sued for the unfair dismissal of an employee. A stark reminder that the dismissal by directors of an employee who makes a protected discloser, can result in those directors being deemed personally liable for their decisions and the financial consequences thereof. The case very much brings to the forefront, the risk of both individual and corporate liability where whistleblowers are subjected to victimisation.

There is now a likelihood of an increase in claims made against co-workers for whistleblowing detriment, with employers needing to defend vicariously liable.

What does this mean for employers?

  • Defending vicarious liability in the case of whistleblowing detriment, takes more action than just having a whistleblowing policy in place. Above this, employers will need to demonstrate they took steps to prevent whistleblowing detriment and consequently, unfair treatment from occurring.
  • Train those who may be involved in investigating and decision-making in relation to whistleblowing, so that they understand the principles and are able to identify whistleblowing complaints as soon as they occur. 
  • Train managers in the fair and consistent implementation of the organisation’s whistleblowing policy.
  • Give very careful consideration before making any decision to dismiss an employee who says they have made significant disclosures.

 

cHRysos HR Solutions, is a Doncaster based HR training and consultancy company providing CIPD and CMI accredited qualifications nationwide, as well as HR Consultancy to SMEs.  For more information about how cHRysos HR can help you develop a whistleblowing policy and train managers and other staff in implementation and decision-making in relation to your policy, email info@chrysos.org.uk or call +44 (0)1302 802128.

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cHRysos HR Solutions are a UK wide HR training and consultancy company offering CIPD accredited qualifications, Apprenticeships, Training and HR Services to SMEs. For more information about how cHRysos HR can help you or your teams successfully achieve further qualifications, contact us on info@chrysos.org.uk or call 03300 562443.