Liability of directors for detriment to whistleblowing workers

The Employment Appeal Tribunal (EAT) has reinforced the substantial risk taken by participators and controllers of organisations who commit unlawful detriment acts against their whistleblowers.

A recent whistleblower case

Dismissed whistleblowers have twin track remedy routes - against their employer and against those who are the controlling mind behind their dismissal or cause the detriment their whistleblowing brings them.

A recent whistleblower, who faced summary dismissal when he blew the whistle on the unlawful participation of the business in illegal acts succeeded in a claim, not only against his employer, but also against non-executive directors orchestrating his dismissal by using the route of the detriment he suffered because of their controlling decision.

An award of almost £2m was made to the whistleblower and the non-executive directors were liable equally with the employer.

Whistleblowing and the law

The law in relation to whistleblowing remedies is complex, but its overall purpose is to provide an effective remedy for disadvantaged or unemployed whistleblowers where they suffer detriment or dismissal due to that whstleblowing.

Whilst there remains a substantial hill for a claimant to climb to establish both that:

  • a disclosure was made of the type to qualify for a remedy; and
  • the detriment, disadvantage or dismissal was caused by that whistleblowing

once those are established, the net of those liable to compensate can be cast widely and catch the senior personnel driving the decisions. In fact in this case, rather boldly, even those who were not workers in the business but had a third-party business connection was asserted to be liable although the Tribunal declined to accept this.

Non-executive directors are workers in the business, although not employees or formal executive directors. In this case, the Tribunal considered that the non-executives had stepped over the line into more of an executive role and that may well have influenced the decision to make them liable.

Lesson learnt from dismissing a whistleblower

The lesson however for managers, co-workers, trustees and both executive and non-executive directors and officers of an organisation receiving a whistleblowing notification is that they should tread very carefully indeed before they decide to dismiss that whistleblower and always have an eye to their own personal liability.

A well-advised executive or non-executive director or officer will likely ensure that there is directors and officers insurance in place to protect them against this business risk.

For more information please get in touch with Carolyn Brown, or your usual RSM contact.