A recent Employment Appeal Tribunal (EAT) decision has brought to light some significant challenges regarding employer vicarious liability in whistleblowing cases. The judgment in Treadwell v. Barton Turns Development highlights an ongoing uncertainty around vicarious liability in respect of whistleblowing-related dismissal cases, specifically the question around whether an employer can be vicariously liable for a director or other employee’s involvement in a dismissal of an employee who has made a protected disclosure.
Factual background
Ms Treadwell, the Claimant, was dismissed by one of Barton’s directors. As the length of her employment fell short of two years, she did not have the requisite length of service to bring an ordinary unfair dismissal claim. However, the Claimant asserted that the real reason for her dismissal was that she had previously made a protected disclosure to the director, thus making her dismissal automatically unfair under section 103A of the Employment Rights Act 1996 (the ERA).
The Claimant later applied to amend her claim to add a claim of whistleblowing detriment under section 47B of the ERA – the alleged detriment being the director’s decision to dismiss her. Ms Treadwell claimed that the Respondent (her employer) was vicariously liable for the actions of the director in respect of her dismissal, though she did not pursue a claim directly against the dismissing director. The Employment Tribunal refused to allow the amendment on the basis that the legislation prevents an employee claiming detriment against their employer when the detriment in question is their dismissal. It is worth noting that the Claimant had not sought to add the director as an individual respondent to the claim. The Claimant appealed to the EAT.
The EAT’s reasoning
In allowing the appeal, the EAT relied on the decision of the Court of Appeal in the case of Timis and Sage v. Osipov. The court in that case confirmed that an employee can bring a claim for the detriment of dismissal under section 47B of the ERA against either an individual employee who contributed to the decision to dismiss, and/or the employer who is vicariously liable for that individual employee’s act. All that the legislation excludes (under section 47B (2) of the ERA) is a claim of detriment directly against the employer in terms of its own act of dismissal (as opposed to being vicariously liable for the act of an individual). The EAT noted that it was not bound by (or required to regard as persuasive authority) the EAT’s conflicting decision in Wicked Vision Ltd v. Rice, which sought to establish the Osipov case was unique in its facts. The case of Wicked is in the process of being appealed to the Court of Appeal.
Implications for employers
Whilst the case of Timis and Sage v. Osipov remains good law for now, given the contradictory decision in Wicked Vision Ltd v. Rice, the law in this area remains unsettled and uncertain. Once the Court of Appeal has made its decision in respect of the case of Wicked Vision Ltd v. Rice, it should hopefully resolve this uncertainty.
In the meantime, Treadwell showcases the potential for employers to be held vicariously liable for the actions of individual employees in cases of dismissals which are related to whistleblowing, as well as directly liable for the dismissal itself. As the potential for vicarious liability adds another layer of complexity that employers must navigate, it is important that those with dismissing powers are well-informed about whistleblowing procedures and protections, and that decision-making processes are thoroughly documented. We will, of course, keep the Court of Appeal’s decision in the case of Wicked firmly on our radar.
If you have any questions or require assistance with a whistleblowing matter, please get in touch with your usual Dentons contact.
