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Is It Personal? An EAT Decision on Whistleblowing Detriment

on Friday, 02 February 2018.

In a recent case the Employment Appeal Tribunal (EAT) considered whether or not the person who subjects a whistleblower to a detriment must be personally motivated by their protected disclosure.

The Law on Whistleblowing Detriment

Under s47B Employment Rights Act 1996 (ERA 1996), workers have the right not to be subjected to any detriment because of protected disclosures which they make.

When deciding whether or not the detriment is linked to the disclosure, an employment tribunal will need to consider whether the employer's treatment of a whistleblower has been materially influenced by the relevant protected disclosure.

It has generally been held that a decision-maker subjecting a whistleblower to a detriment must have had personal knowledge of the disclosures (and therefore personal motivation) in order to establish liability. However there has remained a question mark as to whether liability could be established by imputing another's knowledge in these circumstances.

Malik v Cenkos Securities Plc

Dr Malik was employed by Cenkos Securities Plc. Throughout his employment he had made a number of disclosures, some of which were later held by the Employment Tribunal (ET) to be protected. Issues arose concerning whether or not he had conflicts of interests and, in particular, whether he had failed to declare those interests. In September 2015, an investigation into an alleged conflict of interest was ordered by the Head of Compliance and questions were later raised as to whether this had been motivated by Dr Malik's protected disclosures.

Dr Malik subsequently resigned and brought various claims in the ET including constructive unfair dismissal, automatic unfair dismissal and detriment on whistleblowing grounds. The ET rejected all of these claims. On the point of causation in relation to the whistleblowing detriment claim, it found that the decision made by the Head of Compliance to investigate Dr Malik had nothing to do with the disclosures he had made.

Dr Malik appealed this decision to the EAT, arguing that the ET had not considered that there may have been a "chain of command" leading the Head of Compliance to take detrimental action against Dr Malik, irrespective of whether he had personal knowledge of the disclosures.

In reaching its decision, the EAT noted that as the schemes of vicarious liability (whereby an employer can be held liable for the actions of its employees) under the ERA 1996 and Equality Act 2010 are similar, the principles applied in discrimination cases will be relevant in cases such as this. Accordingly, in these cases, the knowledge and motivation of another cannot be imputed to the decision-maker who themselves had no knowledge of the disclosures.

It noted however that where there was a claim for unfair dismissal on whistleblowing grounds (where liability for the dismissal will always lie with the employer) then it may be possible to impute the motivation of another in such cases. The same will not apply in a detriment case.

Best Practice

  • The decision in Malik highlights that a person who subjects a whistleblower to a detriment must have some level of personal knowledge of the disclosure which motivates the treatment for an employee to establish liability
  • Where an employer believes a protected disclosure may have been made by one of its employees, it may want to consider who has knowledge of that disclosure and ensure that, where possible, the scope of the knowledge is limited on a need to know basis
  • Cases such this will often turn on evidence of emails or other internal memos showing recipients of information about the relevant protected disclosures

For more information please contact Eleanor Boyd in our Employment Law team on 020 7665 0940.

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