Whistleblowing

Whistleblowers have the right not to be subjected to a detriment, including dismissal, for making a protected disclosure. However, the reason for subjecting the whistleblower to a detriment or dismissal must be because he or she made the protected disclosure, not another reason. In a recently reported case, the employee made a protected disclosure and was later dismissed. But his actions after making the disclosure were clearly separable from the disclosure itself, so his subsequent dismissal was not automatically unfair.

Mr Watson was appointed as CEO for Hilary Meredith Solicitors Ltd. He brought in a new Finance Director at the same time. After four days, Mr Watson and the FD discovered financial irregularities which they brought to the attention of the business owner. This was a protected disclosure. Both Mr Watson and the FD resigned at a board meeting. Mr Watson was placed on garden leave for the period of his notice. The firm tried to persuade him to return to work to help resolve their problems. But attempts to persuade him to return and settlement negotiations failed. Mr Watson was dismissed because of his conduct after he made the disclosure.

Mr Watson submitted a claim to the employment tribunal, alleging that he had been dismissed because, in reporting the financial irregularities, he had been a whistleblower. The tribunal had to decide whether the dismissal and associated detriments had been materially influenced by the whistleblowing. If this were the case, the dismissal would have been a whistleblowing dismissal and therefore automatically unfair.

On the other hand, had Mr Watson been dismissed because he had ‘run for the hills’ (as the firm claimed) rather than staying to help the business out of its difficulties, this would not have been a whistleblowing dismissal. The tribunal decided Mr Watson’s dismissal was not connected to his disclosure and his claim failed. He appealed.

The EAT agreed with the tribunal’s decision that the dismissal was not materially influenced by the disclosures. Mr Watson’s actions after having made a protected disclosure could be distinguished from the protected disclosures themselves. His dismissal was not automatically unfair as the reason for the dismissal was not because he had made the protected disclosure but because he had, by immediately giving his notice, in a board meeting to alert others, acted in a way which had further destabilised the firm.

The EAT noted the tribunal’s findings that the law firm’s owner did not at any stage criticise Mr Watson for making his disclosures; she did not try to cover up the disclosures and, for a period after they were made, she maintained an amicable relationship with him. This only began to change when she started to reflect on events and decided she was not happy about his decision to resign rather than to stay on to help resolve the problems that had been identified. Given his position it had been expected that he would help the firm deal with the problems rather than ‘running for the hills’. The firm had been entitled to regard this as a breach of his duties as a director and of the terms of his service agreement.

This case is also a useful reminder of the responsibilities placed on directors and that in this set of circumstances simply walking away at that critical stage was enough to justify immediate dismissal.

***

If you’re an employer with HR queries and problems, get in touch!

Sign up for our free resources and free weekly tip - subscribe here.

Phone 0345 644 8955
LinkedIn Russell HR Consulting

DISCLAIMER

Although every effort has been made to ensure the accuracy of the information contained in this blog, nothing herein should be construed as giving advice and no responsibility will be taken for inaccuracies or errors.

Copyright © 2021 all rights reserved. You may copy or distribute this blog as long as this copyright notice and full information about contacting the author are attached. The author is Kate Russell of Russell HR Consulting Ltd.