Whistleblowing, performance management and unfair dismissal – guidance from the EAT

Background

In the case of Argence-Lafon v Ark Syndicate Management, a senior underwriter raised concerns about a high-value energy claim, suggesting it was probably invalid and implying possible fraud. He argued that by paying the claim, his employer would be complicit in wrongdoing. He claimed these statements were protected disclosures and that he was later subjected to detriment and dismissed as a result.

The tribunal accepted his initial comments as protected disclosures. However, later allegations were not protected, as by then independent loss adjusters and the lead insurer had confirmed the claim should be paid, making it unreasonable for him to persist in alleging fraud.

The employee also claimed that he was set challenging performance targets, placing him on a performance improvement plan and his eventual dismissal were all linked to whistleblowing. The tribunal rejected that argument, finding the actions stemmed from genuine concerns about performance and his refusal to accept expert views. It held that whistleblowing was not the reason for dismissal, but it did find the dismissal unfair because the targets were not properly scrutinised, and the breakdown-of-trust issue was raised late in the process without notice.

The EAT’s decision

The employee appealed, arguing that more of his allegations should have been treated as protected disclosures, and that the tribunal had been wrong to dismiss his whistleblowing detriment and automatic unfair dismissal claims.

The employer cross-appealed, contending that the tribunal had erred in finding the dismissal unfair because it had not taken proper account of the internal appeal stage.

The EAT dismissed the employee’s appeal. It held that the tribunal had been entitled to find only the early statements were protected disclosures and that the later allegations did not meet the statutory tests. The tribunal was also entitled to conclude that the performance measures, PIP and dismissal were not caused by whistleblowing.
The employer’s cross-appeal succeeded. The EAT noted that the tribunal had only considered the fairness of the initial dismissal decision. Because an internal appeal can remedy earlier procedural defects, the tribunal should have factored this into its overall assessment. The unfair dismissal finding was therefore set aside, and the issue remitted to the tribunal for reconsideration.

Learning points for employers

The case underlines the importance of keeping clear, contemporaneous evidence of why management action is being taken, particularly where whistleblowing concerns form part of the background. Documentation showing that decisions about objectives, performance processes or dismissal were based on legitimate business reasons will be central if challenged. It also highlights how the fairness of a dismissal will be judged by looking at the whole process, including the appeal stage, and not just the original decision.

For more information or advice, please contact Ella Straker in our Employment team.