Whistleblowing: Personal liability for detriment
24 August 2017
The EAT has upheld a finding of the employment tribunal that two non-executive directors were personally liable (together with the employer) for the post-dismissal losses of a whistleblower.
International Petroleum Ltd and others v Osipov and others, EAT
The claimant, Mr Osipov, was briefly employed as the CEO of International Petroleum Ltd, an oil and gas exploration company primarily concerned with exploration in Niger. Shortly after commencing his employment, Mr Osipov made a number of protected disclosures relating to corporate governance and compliance with Nigerien law. Following this he alleged he was subjected to various detriments by two non-executive directors (NEDs), who in fact acted effectively as executive directors of the business. One of the NEDs subsequently instructed the other to dismiss Mr Osipov, which he did.
Mr Osipov brought a claim for automatically unfair dismissal against the company, and detriment claims against both the company and the two NEDs personally. His claims were upheld by the employment tribunal and he was awarded around £1,745,000 in compensation on a joint and several basis against the company and the NEDs. They appealed to the EAT.
The EAT upheld the majority of the tribunal’s findings. The instruction to dismiss Mr Osipov amounted to a detriment for which the NEDs were personally liable. A dismissal could be actionable as a detriment claim against individuals, as well as being actionable as an unfair dismissal against the employer company. The compensation awarded to Mr Osipov related to losses flowing directly from his dismissal and the detriments to which he had been subjected. It was, therefore, recoverable from the company and the NEDs on a joint and several basis.
This decision might encourage whistleblowers to pursue dismissal-related claims against both their employer and against the dismissing manager, as will often already occur in discrimination claims. A potential benefit of doing so is that it is possible to claim an additional award for injury to feelings in respect of a detriment claim, but not in a claim for unfair dismissal. The test for establishing a detriment claim is also arguably easier to satisfy than a claim for automatic unfair dismissal resulting from a protected disclosure.
This article is from the July issue of Employment Law Update, our monthly newsletter for HR professionals. To download the latest issue, please visit the newsletter section of our website.
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The content of this article is for general information only. It is not, and should not be taken as, legal advice. If you require any further information in relation to this article please contact the author in the first instance. Law covered as at August 2017.