Whistling for Dismissal and Detriment Remedies: Royal Mail Ltd v Jhuti

Whistling for Dismissal and Detriment Remedies: Royal Mail Ltd v Jhuti 1. INTRODUCTION The recent decision of the Court of Appeal in Royal Mail Ltd v Jhuti1 raises several important and interlocking issues: a. The line between unfair dismissal and detriment in whistleblowing cases; b. Whose acts or state of mind can be attributed to the employer for the purposes of claims of unfair dismissal? c. How do the automatically unfair whistleblowing dismissal provisions fit in with the general corpus of unfair dismissal? d. What claims arise from manipulation by persons other than the dismissing officer? It also highlights, but leaves unresolved, important questions about the scope of whistleblowing protection that arise from seeking to demarcate the boundaries of the differing regimes for detriment and dismissal protection. 2. THE TWO RUBRICS: DETRIMENT AND DISMISSAL A whistleblower employee will often claim an unfair dismissal and detriment remedy together. Section 47B(1) Employment Rights Act 1996 (hereafter ERA 1996) provides that the worker must be subjected to a detrimental act or deliberate failure to act ‘on the ground that the worker has made a protected disclosure’.2 Dismissal on the grounds of having made a protected disclosure is defined in the normal way for automatically unfair dismissals under section 103A ERA 1996. In order to qualify, the tribunal must identify ‘the reason (or if more than one, the principal reason) for the dismissal…’ as being the fact that the ‘the employee made a protected disclosure’. In relation to employees only (but not other workers), the detriment provisions do not apply to any detriment that ‘amounts to dismissal’. Such claims can only be advanced within the unfair dismissal regime (section 47B(2) ERA 1996). There is no such demarcation issue for other workers, save that where the detriment is the termination of the worker’s contract, they cannot receive compensation which exceeds that which would be awarded if they had been an employee who had succeeded in a section 103A unfair dismissal claim (section 49(6) ERA 1996).3 The conjunction between these provisions (which may be pursued on the same set of facts) can be difficult. As Underhill LJ remarked in the Court of Appeal in Jhuti, the separate provision for overlapping detriment and dismissal claims is a peculiarity of the whistleblowing provisions.4 While there are other provisions that also provide both for detriment claim and for and unfair dismissal claim, it is only the whistleblowing provisions which combine that dual structure with provision for vicarious liability and personal liability of employees and agents, which is applicable to detriment claims only. The introduction of personal and vicarious liability was in part a response to the decision of the Court of Appeal in NHS Manchester v Fecitt and others.5 That decision highlighted a gap in protection because, without specific vicarious liability provisions, liability could only arise on the basis of wrongdoing which could be attributed as being a breach of an obligation by the employer—as in the case, for example, of the exercise of managerial authority to dismiss. Fellow employees were under no such obligation not to victimise by reason of a protected disclosure. As such, there could be no vicarious liability for victimisation by a worker’s colleagues when they were not acting as the employer. That problem was addressed by amendments to the legislation so far as the detriment provisions were concerned.6 But no equivalent change was made to the unfair dismissal provisions. The outcome was to leave festering anomalies arising from the co-existence of the two regimes. These are not limited to the difference in relation to vicarious and personal liability, and the different approach to recovery of non-pecuniary losses such as injury to feelings. In addition, whereas unfair dismissal liability depends on establishing that the protected disclosure was the principal reason for dismissal, for detriment claims it is sufficient if the protected disclosure was only a significant influence in relation to the relevant act or deliberate failure to act.7 Furthermore, interim relief in whistleblowing claims can only be sought in unfair dismissal, not detriment, claims. Again, remedies of reinstatement or re-engagement are only available for unfair dismissal. The distinction between detriment and dismissal claims is a historical anomaly, resulting from implanting the whistleblowing protection into the pre-existing legislative provisions. Yet the vicarious and personal liability provisions are modelled on discrimination legislation where there is no such distinction drawn. Detriment and dismissal are located alongside each other in the list of prohibited actions covered under section 39(2) Equality Act 2010, with no difference in the approach applied to detriments amounting to dismissal. That solution avoids the demarcation issues and anomalies which arise in the whistleblowing provisions. Although whistleblowing has some similarity with discrimination law, it is not identical with it in its concepts. The Court of Appeal stressed in Jhuti that principles cannot necessarily be read across from one to the other,8 though it makes sense to do so where there is identical language used and, as a result, there is greater scope for reading across in relation to detriment claims.9 3. REASON FOR DISMISSAL It is trite law that establishing the reason for dismissal involves a subjective inquiry into the mental processes of the person or persons who took the decision. This was summed up in Beatt v Croydon Health Services NHS Trust in the formulation that ‘the “reason” for a dismissal connotes the factor or factors operating on the mind of the decision maker which cause them to take the decision—or, as it is sometimes put, what “motivates” them to do so’,10 encapsulating the principle that had been much earlier laid down in Abernethy v Mott Hay & Anderson.11 Is this to be read restrictively to apply only to the mind of the decision maker himself or herself? Recently, several cases have dealt with the problem of attributing to the decision maker faulty information being provided to him or her, or as it was categorised by Underhill LJ in Reynolds v CLFIS (UK) Limited, ‘tainted information’.12 At the extreme end of things this may involve the decision maker being manipulated by a third party in response to a protected disclosure, or as it was put (again by Underhill LJ) in Co operative Group Ltd v Baddeley, an Iago case.13 In each case, this is also inevitably linked with the question of whose acts or deliberate failure to act, or state of mind, can be attributed to employer so as to establish liability in a regime where there is no vicarious liability. 4. THE FACTS Ms Jhuti, an employee of Royal Mail, blew the whistle about irregularities as she saw them in dealing with tailor-made incentives by her management. This provoked a fierce and swift reaction by her immediate manager, Mr Widmer; the ET found that he had set targets and requirements for improvement which were ‘harsh and unreasonable’. Mandatory weekly one-to-one meetings and targets were imposed solely on Ms Jhuti. She was served with a document entitled ‘Performance Plan Objectives’ as a condition of passing her probation and she had to provide all her key contacts in the travel sector. Mr Widmer was found to have ‘put her under great pressure to withdraw her allegations, with a clear if veiled threat that if she did not do so her employment would not continue beyond the end of her probation’.14 Although these were the immediate acts of Mr Widmer, responsibility for her employment situation was subsequently given to Pauline Vickers, the Head of Sales Operations. However this followed what the tribunal had found was ‘a course of bullying and harassment against the claimant’ by Mr Widmer specifically because of her disclosures. The tribunal found that Ms Vickers ‘did not have the advantage of seeing the full picture [ie the whistleblowing background and the response] when she was making her decision’, partly because the HR investigation was kept separate. Ms Vickers decided to dismiss Ms Jhuti. The letter of dismissal sent by Ms Vickers referred to issues of performance on the part of Ms Jhuti as being the reason for dismissal. The tribunal found that ‘the fact that the claimant had made protected disclosures was not part of her reasoning and that she genuinely believed that the claimant was a poor performer’. But her decision was reached as a consequence of Mr Widmer successfully ‘setting up a paper trail which set her to fail’.15 So the question became whether it was only the reasoning of Ms Vickers, which was relevant, or whether the tribunal could consider everything that led up to it as well. 5. TRIBUNAL AND EAT DECISIONS The tribunal decided that ‘given Mr Widmer’s actions…it was inevitable that Ms Vickers would…dismiss the claimant’ (although in the Court of Appeal Underhill LJ noted that this view could not have been conclusive since formally it did not fall within the scope of the liability hearing).16 It found that Ms Vickers acted on the basis of partial and misleading information most of which derived directly or indirectly from Mr Widmer who was motivated by the protected disclosures she had made. The tribunal took the Court of Appeal case of CLFIS (UK) v Reynolds to mean that Ms Vickers ‘must herself have been motivated by the protected disclosures’ for the dismissal to be automatically unfair under section 103A.17 The EAT held that the ET had been wrong to decide that the issue was concluded by Reynolds since Ms Reynolds had brought an age discrimination case and because there was ‘no read across from discrimination principles and the discrimination scheme…[to] the whistle blowing scheme’.18 What was the correct approach to dealing with a dismissing officer who did not have the full picture such as Ms Vickers? Mitting J in the EAT said that a ‘man can manipulate what a person believes as to his reason just as well as he manipulates what a person believes as to the fairness of decisions which flow from having that reason’.19 He then said that the ‘reason and motivation of Mr Widmer must also be taken into account’.20 The appeal by Royal Mail was brought on the basis that the only relevant consideration was what had motivated the person or persons taking the decision to dismiss. Underhill LJ (with whom Moylan and Jackson LJJ agreed) said on appeal that the reason should indeed be established by reference only to ‘the mental processes of the person (or persons) responsible for the decision’ to dismiss.21 The whistleblowing provisions (section 103A) had to be interpreted consistently with the other unfair dismissal provisions, including section 98.22 6. A SCHEMA OF MANIPULATION CASES Underhill LJ then produced a valuable schema of manipulation cases23 as follows: a. A colleague with no relevant managerial responsibility for the victim procures the dismissal by presenting false evidence by which the decision taker is innocently and reasonably misled; the employer has not acted unfairly because that is not the act of the employer; b. Where the manipulator is the victim’s line manager but does not himself have responsibility for the dismissal; this was the situation in the Court of Appeal decision in Orr v Milton Keynes DC and the manipulator’s motivation again could not be attributed to the employer24; c. Where the manipulator is ‘a manager with some responsibility for the investigation’ but is not the decision maker; although this did not arise on the facts, there would then be ‘a strong case for attributing to the employer both the motivation and knowledge’ of the manipulator even if they were not shared by the dismissing officer; d. Where someone at or near the top of the management hierarchy procures a dismissal by deliberately manipulating the evidence before the decision taker; Underhill LJ commented that there ‘may well be a case’ for attributing the manipulator’s intention to the employer in such a case and that not to do so ‘rather sticks in the throat’, but he preferred not to express a ‘definitive view’ as it was not raised by the facts.25 The strange ultimate conclusion reached on the reason for dismissal was thus that ‘Even if Mr Widmer’s conduct…constituted a deliberate attempt to procure the Claimant’s dismissal because she had made a protected disclosure…that motivation could not be attributed to Royal Mail as the employer since it was not shared by Ms Vickers, who was the person deputed to take the dismissal decision’.26 This does seem somewhat counter-intuitive and (subject to the scope of claims based on detriment) is not likely to deter those who victimise whistleblowing. 7. AN UNDULY RESTRICTIVE APPROACH? One can detect Underhill LJ’s unease at the result in that he commented that ‘if the matter were free from authority I could see the force of the argument for attributing the manipulator’s motivation to the employer because it has delegated authority to him or her to manage the employee in question’.27 However, the Court of Appeal considered that it was driven to this conclusion by the earlier decision of the Court in Orr v Milton Keynes.28 Mr Orr had been dismissed for behaving in an abusive and insubordinate manner. A potential mitigating factor was that his misconduct had been in response to certain conduct by his line manager, Mr Madden, relating to the way in which he had gone about reducing Mr Orr’s hours and the way he had spoken to Mr Orr. The dismissing officer was not aware of this and the Court of Appeal in Orr held that, as such, this conduct and knowledge of it was not to be attributed to the employer in relation to fairness of the dismissal. By a majority, the Court in Orr considered that this followed from the approach envisaged by Lord Hoffmann in the Privy Council decision in Meridian Global Funds Management Asia Ltd v Securities Commission which focussed on the question ‘[w]hose act (or knowledge or state of mind) was for this purpose intended by the legislation in question] to count as the act etc. of the company?’.29 At first blush, it may seem surprising that the Court of Appeal in Jhuti considered itself bound by the approach in Orr in the light of the differences between the cases. First, Orr was not concerned with protected disclosure claims. Second, the case was not directly concerned with the reason for dismissal. The issue instead was as to what knowledge was to be attributed to the employer in assessing the fairness of the dismissal (under section 98(4) ERA 1996). Third, it was not concerned with a situation where the line manager, although not involved in the dismissal process, had deliberately set out to influence that process (as in the case of setting up Ms Jhuti to fail). As to the first factor, Underhill LJ reasoned that since section 103A falls within Part X of the ERA 1996, it must be interpreted consistently with the other provisions concerning liability for unfair dismissal. In each case, there is an identical test of the reason or principal reason for dismissal. He might have added, as the Court had done in Fecitt, that to the extent that this produces anomalies when compared to the provisions for detriment, that is a consequence of the different legislative schemes for detriment and unfair dismissal. As to the second factor, Underhill LJ considered that the reasoning in relation to section 98(4) must apply equally to the reason for dismissal. He emphasised the link between the analysis which applies in relation to the reason for dismissal and that which applies in considering fairness under section 98(4). In considering fairness, the tribunal is engaged in considering, by reference to the reason for dismissal, whether the employer acted reasonably in treating that reason as sufficient to dismiss. As such, he considered that: It would be incoherent and unworkable if, in deciding—as the reasonableness question requires—what beliefs were (reasonably) held or facts (reasonably) known by the employer, it were permissible to look at the mental processes of a different person.30 In addition, in Orr, Moore-Bick LJ emphasised the need for an approach consistent with the fact that in a large organisation, with many employees, it will inevitably be necessary to delegate responsibility for dealing with routine employment problems to suitably qualified managers who must then proceed on the basis of a reasonable investigation.31 He regarded it as being inconsistent with that approach if certain knowledge could fall to be attributed to the employer irrespective of the investigation. The same may be said to apply if, even though the dismissing officer has formulated reasons for dismissal after a thorough investigation, the reasons for the dismissal are to be derived from considering the mental processes of someone outside the disciplinary process. This aspect of the reasoning might be questioned on the basis that, as is apparent from the above schema of manipulation cases, Underhill LJ allowed for the possibility that the mental processes of individuals other than the dismissing officer could be important: whether by reference to someone with responsibility for the investigation or, possibly, someone at or near the top of the management hierarchy who procures the dismissal. Having allowed for those exceptions, it may be said there is nothing incoherent in allowing further exceptions to cover cases where someone else exercising the employer’s authority, such as the line manager in Ms Jhuti’s case, procures the dismissal. As to Orr not being a case of a manager being found to have deliberately procured a dismissal, on one view it can be said that Orr was also a tainted information case. Mr Madden was found to have withheld information and thereby to have given a misleading picture when he was a witness in the disciplinary process. But that may still be distinguished from the case of a manager setting out to procure a dismissal for an illicit purpose. One possible approach in such a case may be for the tribunal to ask who in substance brought about the dismissal and then to pose the Meridian question of whether, for the purposes of the legislation, that person can be regarded as counting as the employer. It may be argued that it is wholly consistent with the purposes of the legislation to focus on the substance of who brought about the dismissal and, where it results from an exercise of managerial authority, to attribute that as an act of the employer. Indeed, had Ms Jhuti resigned in response to Mr Widmer’s conduct, subject to any issues as to having affirmed the contract, it is likely that based on its findings of fact, a tribunal would have had no difficulty in concluding that there was a constructive dismissal giving rise to a successful section 103A claim. As against this, considerable uncertainty might be engendered in an ordinary unfair dismissal case by going beyond the mental processes of the dismissing officer. As emphasised in Orr, the scheme of the unfair dismissal legislation is to encourage reasonable investigation. That points against focussing on the mental processes of the manager who may bring a complaint, rather than the decision maker who may be tasked with considering the evidence, including that of the complainant manager. That is less of a concern in cases of automatic unfair dismissal where no issue arises as to adequacy of the investigation. But, as emphasised by Underhill LJ, it cannot be the case that there is a different approach to the test of the reason or principal reason in automatic unfair dismissal cases. 8. OTHER MODELS Are there other models available to answer the more general question of whose state of mind is relevant which would be open to the Supreme Court to take? a. In Orr, Sedley LJ considered that the application of the Meridian approach in unfair dismissal claims could lead to taking into account ‘institutional intent’.32 He decided that for the purposes of considering the fairness of a decision, the person deputed to make the dismissal decision should be taken to know the ‘facts known to persons who in some realistic and identifiable way represent the employer in its relations with the employee concerned’.33 He added that ‘[i]f, as would seem inescapable, relevant things known to a chief executive must be taken to be known to both the corporation and its decision-maker, the same is likely to be the case as the chain of responsibility descends. It is equally likely not to be the case when one reaches the level of fellow employees or those in more senior but unrelated posts’.34 He concluded that the ‘principle is that where neither express authority nor vicarious liability affords an answer, attribution of the personal to the corporate depends on what one can call institutional intent’.35 That broad approach was rejected by the majority in Orr, with Aikens LJ supporting the conclusion of Moore-Bick LJ that it was necessary to identify the ‘person who was deputed to carry out the employer’s functions under s. 98’,36 and that was followed in Jhuti. It can be questioned whether this adequately gives effect to the objectives of the whistleblowing legislation. But as noted above, Underhill LJ stressed the need for consistency across the range of unfair dismissal provisions focusing on the reason or principal reason for dismissal. b. In Reynolds, the EAT concentrated on Mr Gilmour, as the decision maker who carried out the termination of services; Singh J accepted that even if he was sole decision maker, his decision was shaped and informed by others within the respondent, and that this was enough.37 This was subsequently overturned on appeal, but substantially on the basis that ‘very unfair consequences’ could flow from what was described as a ‘composite approach’ (ie combining the acts of the decision maker who is innocent of discriminatory motive, with the malign motives of somebody else whose views or information influenced the decision).38 In particular, the scheme of personal liability under discrimination legislation could result in liability for the innocent decision maker. That particular concern does not arise in the context of unfair dismissal claims since there is no personal liability. However, the approach begs the question as to the circumstances in which the motivations of those who shaped and informed the decision are to be attributed to the employer. c. More radically, it may be argued that the Meridian question of whose intention is relevant for the purposes of this legislation should have regard to the whistleblowing legislation as a whole. The unfair dismissal and detriment provisions are intended to provide a coherent structure for overall protection. In the context of the detriment provisions, it is clear that liability can be established by attributing to the employer the acts or deliberate failures to act of a worker in the course of that worker’s employment or by an agent of the employer with the employer’s authority (section 47B(1A) ERA 1996). That is subject to a statutory defence if the employer can show that the employer took all reasonable steps to prevent the worker from doing the act of victimisation in question or doing anything of that description (section 47B(1D) ERA 1996). It might be said, adopting a purposive approach and viewing the legislation as a coherent whole, that if (a) the dismissal was brought about by a co-worker acting in the course of their employment (or an agent acting with the employer’s authority), and (b) the co-worker or agent principally acted by reason of the protected disclosure and (c) the statutory defence would not have been made out if applying the detriment provisions, then the reason or principal reason for dismissal was the protected disclosure. That approach reduces the scope for acts of victimisation to go unpunished simply because they are serious enough to have resulted in dismissal. It is also consistent with the legislative scheme that remedies of reinstatement, re-engagement and interim relief are intended to be available where the detriment takes the form of dismissal, whereas that would not be the case if it was necessary to rely instead on a detriment claim. But it is convincingly answered by the point that the legislature cannot be taken to have intended that the test of the reason or principal reason for dismissal means something different in relation to section 103A than it does for the rest of Part X. 9. A CLAIM IN DETRIMENT? The significance of the narrow approach applied in Jhuti depends in large part on the availability of a potential detriment claim arising in relation to the tainted information or manipulation that causes a dismissal. At first instance in Jhuti, the tribunal, without deciding on the availability of a section 47B claim, had highlighted that Mr Widmer’s claims made dismissal inevitable (though, as noted above, Underhill LJ said this could not have been conclusive given the scope of the hearing). The EAT concluded it was unnecessary to deal with the alternative detriment claim because it upheld the section 103A claim. However, Mitting J expressed the view that since section 47B(2) ERA 1996 excluded detriment claims amounting to dismissal of an employee, it also of necessity excluded claims in relation to the financial and other consequences of dismissal.39 Before the Court of Appeal, the employer did not support that argument. But that may have reflected a concern that it would highlight a lacuna in protection that might lead the Court to a different decision on the unfair dismissal claim. Instead, the only point taken in relation to section 47B was a narrow one as to the limit of what had been pleaded or advanced below, which the Court rejected. An unfortunate consequence was that the Court of Appeal did not definitively decide a crucial issue as to the scope for detriment claims to fill the potential gap in whistleblower protection resulting from the limits set out to unfair dismissal claims. Underhill LJ did express the view that he could see no reason in principle why a different approach should be taken in whistleblowing cases to that adopted in Reynolds (relating to discrimination claims) that losses occasioned on dismissal may be recoverable as compensation for unlawful detriment. He acknowledged that the real issue was as to the effect of section 47B(2) but commented, obiter, that it was ‘clearly arguable that in this kind of case the relevant detriment is the prior treatment complained of’, with dismissal being only a consequence of that detriment.40 But he added that it might be that this distinction was ‘not as straightforward as it seems’ and that in any case where the scope of section 47B(2) falls to be decided, careful attention will be needed as to the effect of the Court of Appeal’s decision in Melia v Magna Kansei Ltd.41 In Melia, the Court concluded that in a constructive dismissal whistleblowing case, the scheme of the legislation is that while detriments that preceded the dismissal could give rise to claims under section 47B ERA 1996, claims for compensation consequential on acceptance of the repudiatory breach (ie the termination of employment consequent on the constructive dismissal) would have to be brought under section 103A. That reasoning would suggest, as Mitting J had indicated, that losses consequent on dismissal are excluded. Consistently with that approach, section 47B(2) is framed by reference to ‘detriment’ rather than the act or deliberate failure to act which gives rise to the detriment. Applied to Ms Jhuti’s situation, the detrimental acts or failures to act involved setting her up to fail. Those acts were plainly detrimental in themselves but also caused the detriment of dismissal. On the face of the language of section 47B(2) and (on one view) the reasoning in Melia, the losses consequent on the detriment of dismissal would seem to be excluded. Underhill LJ’s obiter observations may, though, point to a purposive approach in favour of a different conclusion, which becomes all the more significant in the light of the approach to unfair dismissal claims in Jhuti. Furthermore, the Court in Melia proceeded on the basis that the purpose of section 47B(2) was to exclude only those detriments that could be compensated under the unfair dismissal regime. It was for that reason that losses consequent on dismissal were excluded. However, the decision in Melia preceded the amendments to the whistleblowing legislation made in 2013, and as such did not grapple with the anomalies which are liable to arise from vicarious liability only being available in detriment claims. It can be said, consistently with the tenor of Underhill LJ’s observations in Jhuti, that where the loss is not capable of being compensated under the unfair dismissal regime because it results from the influence of a person whose acts or motivation are not attributed to the employer for the purposes of the unfair dismissal regime, section 47B(2) does not bite. In International Petroleum v Osipov the EAT went a step further in developing the scope of section 47B protection.42 Whereas Underhill LJ had focussed on whether detriments prior to dismissal could be distinguished from the dismissal itself, Simler J concluded that section 47B(2) ERA 1996 applies only to unfair dismissal claims against an employer and not to claims on the basis of personal liability of workers or agents under section 47B(1A) ERA 1996. On that basis, the EAT saw no objection to a claim being brought against individual directors who had planned and brought about the dismissal. Indeed, this could include a claim against the directors based on the very act of effecting the dismissal since no unfair dismissal claim could be brought other than against the employer. Although not directly addressed by the EAT in Osipov, it might be argued (though this does raise some further construction issues) that there should equally be no bar to the employer being vicariously liable under section 47B(1B) ERA 1996 even where the detriment consists of dismissal. The EAT’s decision in Osipov may be regarded as a valiant attempt to adopt the Equality Act 2010 approach (which does not distinguish between dismissal and other detriments), or something approximating to it, within the current whistleblowing legislation. The obstacles to that approach as a matter of statutory construction are formidable. Section 47B(2) ERA 1996 refers to a detriment amounting to ‘dismissal (within the meaning of Part X)’ rather than to ‘unfair dismissal’ and appears to be a clear reference to the definition of dismissal in section 95 ERA 1996 (ie with or without notice, constructive dismissal etc). Furthermore, section 49(6) ERA 1996, with its demarcation provisions relating to termination of contract claims only by non-employee workers, also contemplates that it is only that category of workers who can bring such claims. To permit vicarious liability for what are, in effect, automatic unfair dismissal claims, might also be said to be inconsistent with the current structure of the legislation. Furthermore, section 47B(2) applies to the detriment of dismissal, rather than to the act or deliberate failure to act. While Simler J in Osipov reasoned that only an employer could dismiss, the deliberate act or failure to act of individual employees could cause the detriment of dismissal, as with Mr Widmer in Ms Jhuti’s case. Despite these obstacles, the policy considerations in favour of a purposive construction of section 47B(2) are powerful. It cannot have been the legislative intention to leave such a gaping hole in the scope of whistleblowing protection as would arise if the approach to unfair dismissal in Jhuti was combined with a construction of section 47B(2) which excluded losses consequent on dismissal from the scope of detriment claims. To some extent, the force of that concern is ameliorated if, following the approach indicated above, section 47B(2) is construed so as only to exclude those claims where the loss is not capable of being compensated under the unfair dismissal regime. That would permit a claim under section 47B in a case such as Jhuti where the relevant detrimental acts or motivation could not be attributed to the employer (other than by reliance on the vicarious liability provisions in section 47B(1B) ERA 1996). Different considerations may apply in a case such as Osipov, where the relevant detrimental acts of the relevant directors could be attributed to the employer and, indeed, the section 103A unfair dismissal claim succeeded. That raises a distinct issue as to whether section 47B(2) should bite so as to exclude a detriment claim even though losses could claimed under the unfair dismissal regime, but not against the relevant co-worker or agent. It may be said that this is simply the consequence of confining individual liability to detriment claims. But there remain compelling reasons for straining to avoid exclusion of a detriment claim in such a case so as to avoid the result that those who engage in whistleblowing victimisation can escape liability (whereas they could not do so if the victim was a non-employee worker). At least pending authoritative resolution of the issues arising from construction of section 47B(2) ERA 1996, the law is left in a somewhat unsatisfactory state.43 Not least, there is the anomalous prospect in an ‘Iago’ or ‘tainted information’ situation that an employee’s unfair dismissal claim may fail, yet a non-employee worker would be able to succeed by bringing a detriment claim. It is unfortunate that the Court of Appeal in Jhuti was not in a position to resolve these issues in the round with a view to fashioning a coherent approach, so far as possible, within the confines of the unhelpful distinction between dismissal and detriment provisions. Footnotes 1 [2017] EWCA Civ 1632. 2 By s 47B(1A) ERA, this may include a detrimental act/deliberate failure to act by a co-worker in the course of employment or by an agent with the employer’s authority, and the claim can be brought against the co-worker/agent as well as the employer. 3 In practice, this places a cap on the amount of non-pecuniary loss (eg injury to feelings) that can be awarded where the detriment consists of termination of the contract of a non-employee worker, such that it cannot exceed the amount of the unfair dismissal basic award. That is because while the same compensation for financial loss can be awarded under a detriment or unfair dismissal claim, it is only on a detriment claim that there can be an award for non- pecuniary loss (Dunnachie v Kingston upon Hull City Council [2005] 1 AC 226 (HL)). Conversely, unlike in a detriment claim, there would be a basic award on an unfair dismissal claim. 4 Jhuti (n.1) [20] and [27]. 5 [2012] ICR 372. 6 Made by the Enterprise and Regulatory Reform Act 2013 in relation to qualifying disclosures made on or after 25 June 2013 in relation to Great Britain. Equivalent provisions were introduced for Northern Ireland from 1 October 2017: Employment Act (Northern Ireland) 2016 (ss 13–17) and Employment Act (Northern Ireland) 2016 (Commencement No 1) Order (Northern Ireland) 2017, SI 2017/199. 7 Fecitt (n.5). 8 Jhuti (n.1) [26]. Notably, in enabling legislation with a view to introducing whistleblowing protection for applicants for employment in the NHS, a discrimination model has been preferred (s 49B ERA), adding to the somewhat confused picture. 9 Jhuti (n.1) [26] and [79] (Underhill LJ). 10 [2017] IRLR 748 [30], emphasis added. 11 [1974] ICR 323. This was approved by the House of Lords in W Devis & Sons Ltd v Atkins [1977] ICR 662. 12 [2015] EWCA Civ 439, [2015] ICR 1010 (CA) [34]. 13 [2014] EWCA Civ 658 [42]. See also Kuzel v Roche Products Ltd [2008] ICR 799; Western Union Payment Services UK Ltd v Anastasiou, EAT, 21 February 2014; Ahmed v City of Bradford Metropolitan District Council & Ors EAT, 27 October 2014. 14 The tribunal found that ‘Mr Widmer set her…an ever changing unattainable list of requirements which she took to be an attempt to drive her out of her job’ (as set out in the EAT judgment): Royal Mail Group Ltd v Jhuti [2016] ICR 1043 [11]. 15 Jhuti (EAT) (n.14) [21] and [35]. 16 Jhuti (n.1) [78]. 17 Above n.12. 18 Jhuti (EAT) (n.14) [29]. The EAT decision is considered in Lewis, Bowers, Fodder & Mitchell, Whistleblowing, 3rd edn (Oxford: OUP 2017), 243–55. 19 Jhuti (EAT) (n.14) [34]. 20 Ibid. [36]. 21 Jhuti (n.1) [57]. 22 Ibid. [58]. 23 Ibid. [60]–[63]. 24 [2011] ICR 704. 25 Jhuti (n.1) [63]. 26 Ibid. [64]. 27 Ibid. [61]. 28 Above n.24. 29 [1995] 2 AC 500, 507 (Lord Hoffmann). 30 Jhuti (n.1) [56]. 31 Orr (n.24) [55]. 32 Orr (n.24) [19]. 33 Ibid. 34 Ibid. 35 Ibid. 36 Ibid. [58]. 37 Reynolds v CLFIS (UK) Ltd [2014] ICR 907 (EAT) [46]. 38 Reynolds (n.12) [36]. 39 Jhuti (EAT) (n.14) [28]. 40 Jhuti (n.1) [79]. 41 [2006] ICR 410. 42 EAT, 19 July 2017. See further the Supplement to Whistleblowing: Law and Practice (Oxford: OUP, 2017) (n.18), available at http://www.littletonchambers.com/, where the approach in Osipov is considered in further detail. 43 The Court of Appeal is due to hear the appeal in Osipov in July 2018. © Industrial Law Society; all rights reserved. For permissions, please e-mail: journals.permissions@oup.com. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Industrial Law Journal Oxford University Press

Whistling for Dismissal and Detriment Remedies: Royal Mail Ltd v Jhuti

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1. INTRODUCTION The recent decision of the Court of Appeal in Royal Mail Ltd v Jhuti1 raises several important and interlocking issues: a. The line between unfair dismissal and detriment in whistleblowing cases; b. Whose acts or state of mind can be attributed to the employer for the purposes of claims of unfair dismissal? c. How do the automatically unfair whistleblowing dismissal provisions fit in with the general corpus of unfair dismissal? d. What claims arise from manipulation by persons other than the dismissing officer? It also highlights, but leaves unresolved, important questions about the scope of whistleblowing protection that arise from seeking to demarcate the boundaries of the differing regimes for detriment and dismissal protection. 2. THE TWO RUBRICS: DETRIMENT AND DISMISSAL A whistleblower employee will often claim an unfair dismissal and detriment remedy together. Section 47B(1) Employment Rights Act 1996 (hereafter ERA 1996) provides that the worker must be subjected to a detrimental act or deliberate failure to act ‘on the ground that the worker has made a protected disclosure’.2 Dismissal on the grounds of having made a protected disclosure is defined in the normal way for automatically unfair dismissals under section 103A ERA 1996. In order to qualify, the tribunal must identify ‘the reason (or if more than one, the principal reason) for the dismissal…’ as being the fact that the ‘the employee made a protected disclosure’. In relation to employees only (but not other workers), the detriment provisions do not apply to any detriment that ‘amounts to dismissal’. Such claims can only be advanced within the unfair dismissal regime (section 47B(2) ERA 1996). There is no such demarcation issue for other workers, save that where the detriment is the termination of the worker’s contract, they cannot receive compensation which exceeds that which would be awarded if they had been an employee who had succeeded in a section 103A unfair dismissal claim (section 49(6) ERA 1996).3 The conjunction between these provisions (which may be pursued on the same set of facts) can be difficult. As Underhill LJ remarked in the Court of Appeal in Jhuti, the separate provision for overlapping detriment and dismissal claims is a peculiarity of the whistleblowing provisions.4 While there are other provisions that also provide both for detriment claim and for and unfair dismissal claim, it is only the whistleblowing provisions which combine that dual structure with provision for vicarious liability and personal liability of employees and agents, which is applicable to detriment claims only. The introduction of personal and vicarious liability was in part a response to the decision of the Court of Appeal in NHS Manchester v Fecitt and others.5 That decision highlighted a gap in protection because, without specific vicarious liability provisions, liability could only arise on the basis of wrongdoing which could be attributed as being a breach of an obligation by the employer—as in the case, for example, of the exercise of managerial authority to dismiss. Fellow employees were under no such obligation not to victimise by reason of a protected disclosure. As such, there could be no vicarious liability for victimisation by a worker’s colleagues when they were not acting as the employer. That problem was addressed by amendments to the legislation so far as the detriment provisions were concerned.6 But no equivalent change was made to the unfair dismissal provisions. The outcome was to leave festering anomalies arising from the co-existence of the two regimes. These are not limited to the difference in relation to vicarious and personal liability, and the different approach to recovery of non-pecuniary losses such as injury to feelings. In addition, whereas unfair dismissal liability depends on establishing that the protected disclosure was the principal reason for dismissal, for detriment claims it is sufficient if the protected disclosure was only a significant influence in relation to the relevant act or deliberate failure to act.7 Furthermore, interim relief in whistleblowing claims can only be sought in unfair dismissal, not detriment, claims. Again, remedies of reinstatement or re-engagement are only available for unfair dismissal. The distinction between detriment and dismissal claims is a historical anomaly, resulting from implanting the whistleblowing protection into the pre-existing legislative provisions. Yet the vicarious and personal liability provisions are modelled on discrimination legislation where there is no such distinction drawn. Detriment and dismissal are located alongside each other in the list of prohibited actions covered under section 39(2) Equality Act 2010, with no difference in the approach applied to detriments amounting to dismissal. That solution avoids the demarcation issues and anomalies which arise in the whistleblowing provisions. Although whistleblowing has some similarity with discrimination law, it is not identical with it in its concepts. The Court of Appeal stressed in Jhuti that principles cannot necessarily be read across from one to the other,8 though it makes sense to do so where there is identical language used and, as a result, there is greater scope for reading across in relation to detriment claims.9 3. REASON FOR DISMISSAL It is trite law that establishing the reason for dismissal involves a subjective inquiry into the mental processes of the person or persons who took the decision. This was summed up in Beatt v Croydon Health Services NHS Trust in the formulation that ‘the “reason” for a dismissal connotes the factor or factors operating on the mind of the decision maker which cause them to take the decision—or, as it is sometimes put, what “motivates” them to do so’,10 encapsulating the principle that had been much earlier laid down in Abernethy v Mott Hay & Anderson.11 Is this to be read restrictively to apply only to the mind of the decision maker himself or herself? Recently, several cases have dealt with the problem of attributing to the decision maker faulty information being provided to him or her, or as it was categorised by Underhill LJ in Reynolds v CLFIS (UK) Limited, ‘tainted information’.12 At the extreme end of things this may involve the decision maker being manipulated by a third party in response to a protected disclosure, or as it was put (again by Underhill LJ) in Co operative Group Ltd v Baddeley, an Iago case.13 In each case, this is also inevitably linked with the question of whose acts or deliberate failure to act, or state of mind, can be attributed to employer so as to establish liability in a regime where there is no vicarious liability. 4. THE FACTS Ms Jhuti, an employee of Royal Mail, blew the whistle about irregularities as she saw them in dealing with tailor-made incentives by her management. This provoked a fierce and swift reaction by her immediate manager, Mr Widmer; the ET found that he had set targets and requirements for improvement which were ‘harsh and unreasonable’. Mandatory weekly one-to-one meetings and targets were imposed solely on Ms Jhuti. She was served with a document entitled ‘Performance Plan Objectives’ as a condition of passing her probation and she had to provide all her key contacts in the travel sector. Mr Widmer was found to have ‘put her under great pressure to withdraw her allegations, with a clear if veiled threat that if she did not do so her employment would not continue beyond the end of her probation’.14 Although these were the immediate acts of Mr Widmer, responsibility for her employment situation was subsequently given to Pauline Vickers, the Head of Sales Operations. However this followed what the tribunal had found was ‘a course of bullying and harassment against the claimant’ by Mr Widmer specifically because of her disclosures. The tribunal found that Ms Vickers ‘did not have the advantage of seeing the full picture [ie the whistleblowing background and the response] when she was making her decision’, partly because the HR investigation was kept separate. Ms Vickers decided to dismiss Ms Jhuti. The letter of dismissal sent by Ms Vickers referred to issues of performance on the part of Ms Jhuti as being the reason for dismissal. The tribunal found that ‘the fact that the claimant had made protected disclosures was not part of her reasoning and that she genuinely believed that the claimant was a poor performer’. But her decision was reached as a consequence of Mr Widmer successfully ‘setting up a paper trail which set her to fail’.15 So the question became whether it was only the reasoning of Ms Vickers, which was relevant, or whether the tribunal could consider everything that led up to it as well. 5. TRIBUNAL AND EAT DECISIONS The tribunal decided that ‘given Mr Widmer’s actions…it was inevitable that Ms Vickers would…dismiss the claimant’ (although in the Court of Appeal Underhill LJ noted that this view could not have been conclusive since formally it did not fall within the scope of the liability hearing).16 It found that Ms Vickers acted on the basis of partial and misleading information most of which derived directly or indirectly from Mr Widmer who was motivated by the protected disclosures she had made. The tribunal took the Court of Appeal case of CLFIS (UK) v Reynolds to mean that Ms Vickers ‘must herself have been motivated by the protected disclosures’ for the dismissal to be automatically unfair under section 103A.17 The EAT held that the ET had been wrong to decide that the issue was concluded by Reynolds since Ms Reynolds had brought an age discrimination case and because there was ‘no read across from discrimination principles and the discrimination scheme…[to] the whistle blowing scheme’.18 What was the correct approach to dealing with a dismissing officer who did not have the full picture such as Ms Vickers? Mitting J in the EAT said that a ‘man can manipulate what a person believes as to his reason just as well as he manipulates what a person believes as to the fairness of decisions which flow from having that reason’.19 He then said that the ‘reason and motivation of Mr Widmer must also be taken into account’.20 The appeal by Royal Mail was brought on the basis that the only relevant consideration was what had motivated the person or persons taking the decision to dismiss. Underhill LJ (with whom Moylan and Jackson LJJ agreed) said on appeal that the reason should indeed be established by reference only to ‘the mental processes of the person (or persons) responsible for the decision’ to dismiss.21 The whistleblowing provisions (section 103A) had to be interpreted consistently with the other unfair dismissal provisions, including section 98.22 6. A SCHEMA OF MANIPULATION CASES Underhill LJ then produced a valuable schema of manipulation cases23 as follows: a. A colleague with no relevant managerial responsibility for the victim procures the dismissal by presenting false evidence by which the decision taker is innocently and reasonably misled; the employer has not acted unfairly because that is not the act of the employer; b. Where the manipulator is the victim’s line manager but does not himself have responsibility for the dismissal; this was the situation in the Court of Appeal decision in Orr v Milton Keynes DC and the manipulator’s motivation again could not be attributed to the employer24; c. Where the manipulator is ‘a manager with some responsibility for the investigation’ but is not the decision maker; although this did not arise on the facts, there would then be ‘a strong case for attributing to the employer both the motivation and knowledge’ of the manipulator even if they were not shared by the dismissing officer; d. Where someone at or near the top of the management hierarchy procures a dismissal by deliberately manipulating the evidence before the decision taker; Underhill LJ commented that there ‘may well be a case’ for attributing the manipulator’s intention to the employer in such a case and that not to do so ‘rather sticks in the throat’, but he preferred not to express a ‘definitive view’ as it was not raised by the facts.25 The strange ultimate conclusion reached on the reason for dismissal was thus that ‘Even if Mr Widmer’s conduct…constituted a deliberate attempt to procure the Claimant’s dismissal because she had made a protected disclosure…that motivation could not be attributed to Royal Mail as the employer since it was not shared by Ms Vickers, who was the person deputed to take the dismissal decision’.26 This does seem somewhat counter-intuitive and (subject to the scope of claims based on detriment) is not likely to deter those who victimise whistleblowing. 7. AN UNDULY RESTRICTIVE APPROACH? One can detect Underhill LJ’s unease at the result in that he commented that ‘if the matter were free from authority I could see the force of the argument for attributing the manipulator’s motivation to the employer because it has delegated authority to him or her to manage the employee in question’.27 However, the Court of Appeal considered that it was driven to this conclusion by the earlier decision of the Court in Orr v Milton Keynes.28 Mr Orr had been dismissed for behaving in an abusive and insubordinate manner. A potential mitigating factor was that his misconduct had been in response to certain conduct by his line manager, Mr Madden, relating to the way in which he had gone about reducing Mr Orr’s hours and the way he had spoken to Mr Orr. The dismissing officer was not aware of this and the Court of Appeal in Orr held that, as such, this conduct and knowledge of it was not to be attributed to the employer in relation to fairness of the dismissal. By a majority, the Court in Orr considered that this followed from the approach envisaged by Lord Hoffmann in the Privy Council decision in Meridian Global Funds Management Asia Ltd v Securities Commission which focussed on the question ‘[w]hose act (or knowledge or state of mind) was for this purpose intended by the legislation in question] to count as the act etc. of the company?’.29 At first blush, it may seem surprising that the Court of Appeal in Jhuti considered itself bound by the approach in Orr in the light of the differences between the cases. First, Orr was not concerned with protected disclosure claims. Second, the case was not directly concerned with the reason for dismissal. The issue instead was as to what knowledge was to be attributed to the employer in assessing the fairness of the dismissal (under section 98(4) ERA 1996). Third, it was not concerned with a situation where the line manager, although not involved in the dismissal process, had deliberately set out to influence that process (as in the case of setting up Ms Jhuti to fail). As to the first factor, Underhill LJ reasoned that since section 103A falls within Part X of the ERA 1996, it must be interpreted consistently with the other provisions concerning liability for unfair dismissal. In each case, there is an identical test of the reason or principal reason for dismissal. He might have added, as the Court had done in Fecitt, that to the extent that this produces anomalies when compared to the provisions for detriment, that is a consequence of the different legislative schemes for detriment and unfair dismissal. As to the second factor, Underhill LJ considered that the reasoning in relation to section 98(4) must apply equally to the reason for dismissal. He emphasised the link between the analysis which applies in relation to the reason for dismissal and that which applies in considering fairness under section 98(4). In considering fairness, the tribunal is engaged in considering, by reference to the reason for dismissal, whether the employer acted reasonably in treating that reason as sufficient to dismiss. As such, he considered that: It would be incoherent and unworkable if, in deciding—as the reasonableness question requires—what beliefs were (reasonably) held or facts (reasonably) known by the employer, it were permissible to look at the mental processes of a different person.30 In addition, in Orr, Moore-Bick LJ emphasised the need for an approach consistent with the fact that in a large organisation, with many employees, it will inevitably be necessary to delegate responsibility for dealing with routine employment problems to suitably qualified managers who must then proceed on the basis of a reasonable investigation.31 He regarded it as being inconsistent with that approach if certain knowledge could fall to be attributed to the employer irrespective of the investigation. The same may be said to apply if, even though the dismissing officer has formulated reasons for dismissal after a thorough investigation, the reasons for the dismissal are to be derived from considering the mental processes of someone outside the disciplinary process. This aspect of the reasoning might be questioned on the basis that, as is apparent from the above schema of manipulation cases, Underhill LJ allowed for the possibility that the mental processes of individuals other than the dismissing officer could be important: whether by reference to someone with responsibility for the investigation or, possibly, someone at or near the top of the management hierarchy who procures the dismissal. Having allowed for those exceptions, it may be said there is nothing incoherent in allowing further exceptions to cover cases where someone else exercising the employer’s authority, such as the line manager in Ms Jhuti’s case, procures the dismissal. As to Orr not being a case of a manager being found to have deliberately procured a dismissal, on one view it can be said that Orr was also a tainted information case. Mr Madden was found to have withheld information and thereby to have given a misleading picture when he was a witness in the disciplinary process. But that may still be distinguished from the case of a manager setting out to procure a dismissal for an illicit purpose. One possible approach in such a case may be for the tribunal to ask who in substance brought about the dismissal and then to pose the Meridian question of whether, for the purposes of the legislation, that person can be regarded as counting as the employer. It may be argued that it is wholly consistent with the purposes of the legislation to focus on the substance of who brought about the dismissal and, where it results from an exercise of managerial authority, to attribute that as an act of the employer. Indeed, had Ms Jhuti resigned in response to Mr Widmer’s conduct, subject to any issues as to having affirmed the contract, it is likely that based on its findings of fact, a tribunal would have had no difficulty in concluding that there was a constructive dismissal giving rise to a successful section 103A claim. As against this, considerable uncertainty might be engendered in an ordinary unfair dismissal case by going beyond the mental processes of the dismissing officer. As emphasised in Orr, the scheme of the unfair dismissal legislation is to encourage reasonable investigation. That points against focussing on the mental processes of the manager who may bring a complaint, rather than the decision maker who may be tasked with considering the evidence, including that of the complainant manager. That is less of a concern in cases of automatic unfair dismissal where no issue arises as to adequacy of the investigation. But, as emphasised by Underhill LJ, it cannot be the case that there is a different approach to the test of the reason or principal reason in automatic unfair dismissal cases. 8. OTHER MODELS Are there other models available to answer the more general question of whose state of mind is relevant which would be open to the Supreme Court to take? a. In Orr, Sedley LJ considered that the application of the Meridian approach in unfair dismissal claims could lead to taking into account ‘institutional intent’.32 He decided that for the purposes of considering the fairness of a decision, the person deputed to make the dismissal decision should be taken to know the ‘facts known to persons who in some realistic and identifiable way represent the employer in its relations with the employee concerned’.33 He added that ‘[i]f, as would seem inescapable, relevant things known to a chief executive must be taken to be known to both the corporation and its decision-maker, the same is likely to be the case as the chain of responsibility descends. It is equally likely not to be the case when one reaches the level of fellow employees or those in more senior but unrelated posts’.34 He concluded that the ‘principle is that where neither express authority nor vicarious liability affords an answer, attribution of the personal to the corporate depends on what one can call institutional intent’.35 That broad approach was rejected by the majority in Orr, with Aikens LJ supporting the conclusion of Moore-Bick LJ that it was necessary to identify the ‘person who was deputed to carry out the employer’s functions under s. 98’,36 and that was followed in Jhuti. It can be questioned whether this adequately gives effect to the objectives of the whistleblowing legislation. But as noted above, Underhill LJ stressed the need for consistency across the range of unfair dismissal provisions focusing on the reason or principal reason for dismissal. b. In Reynolds, the EAT concentrated on Mr Gilmour, as the decision maker who carried out the termination of services; Singh J accepted that even if he was sole decision maker, his decision was shaped and informed by others within the respondent, and that this was enough.37 This was subsequently overturned on appeal, but substantially on the basis that ‘very unfair consequences’ could flow from what was described as a ‘composite approach’ (ie combining the acts of the decision maker who is innocent of discriminatory motive, with the malign motives of somebody else whose views or information influenced the decision).38 In particular, the scheme of personal liability under discrimination legislation could result in liability for the innocent decision maker. That particular concern does not arise in the context of unfair dismissal claims since there is no personal liability. However, the approach begs the question as to the circumstances in which the motivations of those who shaped and informed the decision are to be attributed to the employer. c. More radically, it may be argued that the Meridian question of whose intention is relevant for the purposes of this legislation should have regard to the whistleblowing legislation as a whole. The unfair dismissal and detriment provisions are intended to provide a coherent structure for overall protection. In the context of the detriment provisions, it is clear that liability can be established by attributing to the employer the acts or deliberate failures to act of a worker in the course of that worker’s employment or by an agent of the employer with the employer’s authority (section 47B(1A) ERA 1996). That is subject to a statutory defence if the employer can show that the employer took all reasonable steps to prevent the worker from doing the act of victimisation in question or doing anything of that description (section 47B(1D) ERA 1996). It might be said, adopting a purposive approach and viewing the legislation as a coherent whole, that if (a) the dismissal was brought about by a co-worker acting in the course of their employment (or an agent acting with the employer’s authority), and (b) the co-worker or agent principally acted by reason of the protected disclosure and (c) the statutory defence would not have been made out if applying the detriment provisions, then the reason or principal reason for dismissal was the protected disclosure. That approach reduces the scope for acts of victimisation to go unpunished simply because they are serious enough to have resulted in dismissal. It is also consistent with the legislative scheme that remedies of reinstatement, re-engagement and interim relief are intended to be available where the detriment takes the form of dismissal, whereas that would not be the case if it was necessary to rely instead on a detriment claim. But it is convincingly answered by the point that the legislature cannot be taken to have intended that the test of the reason or principal reason for dismissal means something different in relation to section 103A than it does for the rest of Part X. 9. A CLAIM IN DETRIMENT? The significance of the narrow approach applied in Jhuti depends in large part on the availability of a potential detriment claim arising in relation to the tainted information or manipulation that causes a dismissal. At first instance in Jhuti, the tribunal, without deciding on the availability of a section 47B claim, had highlighted that Mr Widmer’s claims made dismissal inevitable (though, as noted above, Underhill LJ said this could not have been conclusive given the scope of the hearing). The EAT concluded it was unnecessary to deal with the alternative detriment claim because it upheld the section 103A claim. However, Mitting J expressed the view that since section 47B(2) ERA 1996 excluded detriment claims amounting to dismissal of an employee, it also of necessity excluded claims in relation to the financial and other consequences of dismissal.39 Before the Court of Appeal, the employer did not support that argument. But that may have reflected a concern that it would highlight a lacuna in protection that might lead the Court to a different decision on the unfair dismissal claim. Instead, the only point taken in relation to section 47B was a narrow one as to the limit of what had been pleaded or advanced below, which the Court rejected. An unfortunate consequence was that the Court of Appeal did not definitively decide a crucial issue as to the scope for detriment claims to fill the potential gap in whistleblower protection resulting from the limits set out to unfair dismissal claims. Underhill LJ did express the view that he could see no reason in principle why a different approach should be taken in whistleblowing cases to that adopted in Reynolds (relating to discrimination claims) that losses occasioned on dismissal may be recoverable as compensation for unlawful detriment. He acknowledged that the real issue was as to the effect of section 47B(2) but commented, obiter, that it was ‘clearly arguable that in this kind of case the relevant detriment is the prior treatment complained of’, with dismissal being only a consequence of that detriment.40 But he added that it might be that this distinction was ‘not as straightforward as it seems’ and that in any case where the scope of section 47B(2) falls to be decided, careful attention will be needed as to the effect of the Court of Appeal’s decision in Melia v Magna Kansei Ltd.41 In Melia, the Court concluded that in a constructive dismissal whistleblowing case, the scheme of the legislation is that while detriments that preceded the dismissal could give rise to claims under section 47B ERA 1996, claims for compensation consequential on acceptance of the repudiatory breach (ie the termination of employment consequent on the constructive dismissal) would have to be brought under section 103A. That reasoning would suggest, as Mitting J had indicated, that losses consequent on dismissal are excluded. Consistently with that approach, section 47B(2) is framed by reference to ‘detriment’ rather than the act or deliberate failure to act which gives rise to the detriment. Applied to Ms Jhuti’s situation, the detrimental acts or failures to act involved setting her up to fail. Those acts were plainly detrimental in themselves but also caused the detriment of dismissal. On the face of the language of section 47B(2) and (on one view) the reasoning in Melia, the losses consequent on the detriment of dismissal would seem to be excluded. Underhill LJ’s obiter observations may, though, point to a purposive approach in favour of a different conclusion, which becomes all the more significant in the light of the approach to unfair dismissal claims in Jhuti. Furthermore, the Court in Melia proceeded on the basis that the purpose of section 47B(2) was to exclude only those detriments that could be compensated under the unfair dismissal regime. It was for that reason that losses consequent on dismissal were excluded. However, the decision in Melia preceded the amendments to the whistleblowing legislation made in 2013, and as such did not grapple with the anomalies which are liable to arise from vicarious liability only being available in detriment claims. It can be said, consistently with the tenor of Underhill LJ’s observations in Jhuti, that where the loss is not capable of being compensated under the unfair dismissal regime because it results from the influence of a person whose acts or motivation are not attributed to the employer for the purposes of the unfair dismissal regime, section 47B(2) does not bite. In International Petroleum v Osipov the EAT went a step further in developing the scope of section 47B protection.42 Whereas Underhill LJ had focussed on whether detriments prior to dismissal could be distinguished from the dismissal itself, Simler J concluded that section 47B(2) ERA 1996 applies only to unfair dismissal claims against an employer and not to claims on the basis of personal liability of workers or agents under section 47B(1A) ERA 1996. On that basis, the EAT saw no objection to a claim being brought against individual directors who had planned and brought about the dismissal. Indeed, this could include a claim against the directors based on the very act of effecting the dismissal since no unfair dismissal claim could be brought other than against the employer. Although not directly addressed by the EAT in Osipov, it might be argued (though this does raise some further construction issues) that there should equally be no bar to the employer being vicariously liable under section 47B(1B) ERA 1996 even where the detriment consists of dismissal. The EAT’s decision in Osipov may be regarded as a valiant attempt to adopt the Equality Act 2010 approach (which does not distinguish between dismissal and other detriments), or something approximating to it, within the current whistleblowing legislation. The obstacles to that approach as a matter of statutory construction are formidable. Section 47B(2) ERA 1996 refers to a detriment amounting to ‘dismissal (within the meaning of Part X)’ rather than to ‘unfair dismissal’ and appears to be a clear reference to the definition of dismissal in section 95 ERA 1996 (ie with or without notice, constructive dismissal etc). Furthermore, section 49(6) ERA 1996, with its demarcation provisions relating to termination of contract claims only by non-employee workers, also contemplates that it is only that category of workers who can bring such claims. To permit vicarious liability for what are, in effect, automatic unfair dismissal claims, might also be said to be inconsistent with the current structure of the legislation. Furthermore, section 47B(2) applies to the detriment of dismissal, rather than to the act or deliberate failure to act. While Simler J in Osipov reasoned that only an employer could dismiss, the deliberate act or failure to act of individual employees could cause the detriment of dismissal, as with Mr Widmer in Ms Jhuti’s case. Despite these obstacles, the policy considerations in favour of a purposive construction of section 47B(2) are powerful. It cannot have been the legislative intention to leave such a gaping hole in the scope of whistleblowing protection as would arise if the approach to unfair dismissal in Jhuti was combined with a construction of section 47B(2) which excluded losses consequent on dismissal from the scope of detriment claims. To some extent, the force of that concern is ameliorated if, following the approach indicated above, section 47B(2) is construed so as only to exclude those claims where the loss is not capable of being compensated under the unfair dismissal regime. That would permit a claim under section 47B in a case such as Jhuti where the relevant detrimental acts or motivation could not be attributed to the employer (other than by reliance on the vicarious liability provisions in section 47B(1B) ERA 1996). Different considerations may apply in a case such as Osipov, where the relevant detrimental acts of the relevant directors could be attributed to the employer and, indeed, the section 103A unfair dismissal claim succeeded. That raises a distinct issue as to whether section 47B(2) should bite so as to exclude a detriment claim even though losses could claimed under the unfair dismissal regime, but not against the relevant co-worker or agent. It may be said that this is simply the consequence of confining individual liability to detriment claims. But there remain compelling reasons for straining to avoid exclusion of a detriment claim in such a case so as to avoid the result that those who engage in whistleblowing victimisation can escape liability (whereas they could not do so if the victim was a non-employee worker). At least pending authoritative resolution of the issues arising from construction of section 47B(2) ERA 1996, the law is left in a somewhat unsatisfactory state.43 Not least, there is the anomalous prospect in an ‘Iago’ or ‘tainted information’ situation that an employee’s unfair dismissal claim may fail, yet a non-employee worker would be able to succeed by bringing a detriment claim. It is unfortunate that the Court of Appeal in Jhuti was not in a position to resolve these issues in the round with a view to fashioning a coherent approach, so far as possible, within the confines of the unhelpful distinction between dismissal and detriment provisions. Footnotes 1 [2017] EWCA Civ 1632. 2 By s 47B(1A) ERA, this may include a detrimental act/deliberate failure to act by a co-worker in the course of employment or by an agent with the employer’s authority, and the claim can be brought against the co-worker/agent as well as the employer. 3 In practice, this places a cap on the amount of non-pecuniary loss (eg injury to feelings) that can be awarded where the detriment consists of termination of the contract of a non-employee worker, such that it cannot exceed the amount of the unfair dismissal basic award. That is because while the same compensation for financial loss can be awarded under a detriment or unfair dismissal claim, it is only on a detriment claim that there can be an award for non- pecuniary loss (Dunnachie v Kingston upon Hull City Council [2005] 1 AC 226 (HL)). Conversely, unlike in a detriment claim, there would be a basic award on an unfair dismissal claim. 4 Jhuti (n.1) [20] and [27]. 5 [2012] ICR 372. 6 Made by the Enterprise and Regulatory Reform Act 2013 in relation to qualifying disclosures made on or after 25 June 2013 in relation to Great Britain. Equivalent provisions were introduced for Northern Ireland from 1 October 2017: Employment Act (Northern Ireland) 2016 (ss 13–17) and Employment Act (Northern Ireland) 2016 (Commencement No 1) Order (Northern Ireland) 2017, SI 2017/199. 7 Fecitt (n.5). 8 Jhuti (n.1) [26]. Notably, in enabling legislation with a view to introducing whistleblowing protection for applicants for employment in the NHS, a discrimination model has been preferred (s 49B ERA), adding to the somewhat confused picture. 9 Jhuti (n.1) [26] and [79] (Underhill LJ). 10 [2017] IRLR 748 [30], emphasis added. 11 [1974] ICR 323. This was approved by the House of Lords in W Devis & Sons Ltd v Atkins [1977] ICR 662. 12 [2015] EWCA Civ 439, [2015] ICR 1010 (CA) [34]. 13 [2014] EWCA Civ 658 [42]. See also Kuzel v Roche Products Ltd [2008] ICR 799; Western Union Payment Services UK Ltd v Anastasiou, EAT, 21 February 2014; Ahmed v City of Bradford Metropolitan District Council & Ors EAT, 27 October 2014. 14 The tribunal found that ‘Mr Widmer set her…an ever changing unattainable list of requirements which she took to be an attempt to drive her out of her job’ (as set out in the EAT judgment): Royal Mail Group Ltd v Jhuti [2016] ICR 1043 [11]. 15 Jhuti (EAT) (n.14) [21] and [35]. 16 Jhuti (n.1) [78]. 17 Above n.12. 18 Jhuti (EAT) (n.14) [29]. The EAT decision is considered in Lewis, Bowers, Fodder & Mitchell, Whistleblowing, 3rd edn (Oxford: OUP 2017), 243–55. 19 Jhuti (EAT) (n.14) [34]. 20 Ibid. [36]. 21 Jhuti (n.1) [57]. 22 Ibid. [58]. 23 Ibid. [60]–[63]. 24 [2011] ICR 704. 25 Jhuti (n.1) [63]. 26 Ibid. [64]. 27 Ibid. [61]. 28 Above n.24. 29 [1995] 2 AC 500, 507 (Lord Hoffmann). 30 Jhuti (n.1) [56]. 31 Orr (n.24) [55]. 32 Orr (n.24) [19]. 33 Ibid. 34 Ibid. 35 Ibid. 36 Ibid. [58]. 37 Reynolds v CLFIS (UK) Ltd [2014] ICR 907 (EAT) [46]. 38 Reynolds (n.12) [36]. 39 Jhuti (EAT) (n.14) [28]. 40 Jhuti (n.1) [79]. 41 [2006] ICR 410. 42 EAT, 19 July 2017. See further the Supplement to Whistleblowing: Law and Practice (Oxford: OUP, 2017) (n.18), available at http://www.littletonchambers.com/, where the approach in Osipov is considered in further detail. 43 The Court of Appeal is due to hear the appeal in Osipov in July 2018. © Industrial Law Society; all rights reserved. For permissions, please e-mail: journals.permissions@oup.com.

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Industrial Law JournalOxford University Press

Published: Mar 1, 2018

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  • Personalized recommendations
  • No expiration
  • Print 20 pages per month
  • 20% off on PDF purchases
  • Organize your research
  • Get updates on your journals and topic searches

$49/month

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14-day Free Trial

Best Deal — 39% off

Annual Plan

  • All the features of the Professional Plan, but for 39% off!
  • Billed annually
  • No expiration
  • For the normal price of 10 articles elsewhere, you get one full year of unlimited access to articles.

$588

$360/year

billed annually
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14-day Free Trial