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Published 13 November 2018
Mr Osipov was the CEO of International Petroleum Ltd (IPL), an oil and gas exploration company operating in Niger in June 2014. Within days of joining IPL, Mr Osipov discovered serious wrongdoing by senior employees and made a number of protected disclosures about corporate governance and compliance with local law.
He was subsequently dismissed by two of IPL's non-executive directors, Mr Timis (the largest individual shareholder) and Mr Sage (the Chairman).An employment tribunal found he had been automatically unfairly dismissed because he was a whistleblower. He also succeeded in a claim against two non-executive directors that he had suffered detriments at their hands. Compensation was awarded against all three parties who were held to be jointly and severally liable. IPL became insolvent and Mr Osipov sought to enforce the judgment against Mr Timis and Mr Sage. Mr Timis and Mr Sage appealed to the EAT, on a number of grounds including that they should not have been made liable for the losses flowing from the dismissal. They argued that a detriment (under section 47B(2) of the Employment Rights Act 1996) specifically excludes detriments amounting to dismissal and that dismissal claims under section 103A of the same act can only be brought against an employer and not named individuals (as with all unfair dismissal claims). The EAT rejected this argument and Messrs Timis and Sage appealed to the Court of Appeal on this ground. As we reported in August last year (see here), the EAT upheld the tribunal’s finding that non-executive directors were jointly and severally liable for nearly £1.8 million.
The Court of Appeal had to decide whether the drafting of the whistleblowing legislation means that claims against individual co-workers can only be brought in relation to claims of detriment falling short of dismissal, or whether claims can be brought against co-workers for the dismissal. Reviewing existing case law and the purpose of the legislation, the Court of Appeal considered that, while the legislation is not entirely clear, once Parliament had made the decision to make co-workers personally liable for whistleblowing detriment claims, it was difficult to see why this should not have been intended to extend to cases where the detriment amounted to dismissal. Accordingly, the Court of Appeal agreed with the tribunal and the EAT, and the appeal was dismissed.
In most cases of whistleblowing dismissal there will be a solvent employer to pursue for compensation, so where individual co-workers are found to be responsible for whistleblowing detriment, compensation will usually be part and parcel of the employer's liability. However, this case is likely to accelerate the trend we are seeing in discrimination legislation of individual employees being named as respondents. Being a named claimant is a deeply uncomfortable experience for the individual concerned, and claimants may use this as a tactic to increase settlement offers. It is also more likely that employees will bring both dismissal and detriment whistleblowing claims, with the inevitable result that whistleblowing cases are likely to become more complex to manage.
Employers who do not do so already need to train decision makers on the rights of whistleblowers, including how to spot and deal with whistleblowing allegations.
Timis & Anor v Osipov & Anor
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