International Petroleum Ltd & Ors v Osipov & Ors – senior management had personal liability for dismissal of whistleblowing employee
In the case of c UKEAT/0058/17/DA the Employment Appeal Tribunal held that two non-executive directors who were materially involved in the dismissal of a whistleblowing employee were personally liable for for their part in the dismissal.
The Employment Appeal Tribunal upheld an Employment Tribunal’s decision that two non-executives who were materially involved in the dismissal of an employee because he had ‘blown the whistle’ were personally liable for the dismissal and, further, jointly and severally liable with the employer for the employee’s losses flowing from the dismissal.
The consequences of this decision are that senior management dismissing employees because of protected disclosures the employee has made (and any other employee involved in the decision to dismiss) could be personally liable for the dismissal, as well as the financial losses that the dismissed employee suffers.
The facts in International Petroleum Ltd & Ors v Osipov & Ors
International Petroleum Limited (“IPL”) was an oil and gas company involved in oil and gas exploration in Niger. Mr Osipov commenced employment with IPL on 23 February 2011 and was appointed to the position of CEO in June 2014; shortly after this Mr Osipov submitted a number of protected disclosures (colloquially known as ‘blowing the whistle’) which he alleged led to certain detriments to him including, eventually, his dismissal by Mr Timis and Mr Sage (two non-executive directors of IPL).
Subsequent to his dismissal Mr Osipov brought Employment Tribunal claims against Mr Timis, Mr Sage, and IPL for unfair dismissal, detriment due to protected disclosure, and automatic unfair dismissal (essentially a complaint that he had been dismissed because he had made protected disclosures).
The Employment Tribunal upheld Mr Osipov’s claims, holding that Mr Osipov had submitted protected disclosures and that he had been subjected to various detriments (including, but not limited to, dismissal) as a result of those disclosures. The Tribunal awarded Mr Ospiov £1.7 million as compensation for his dismissal against Mr Timis, Mr Sage, and IPL on a joint and several basis, meaning that they were all equally liable to pay the full amount of compensation.
Mr Timis and Mr Sage appealed the Employment Tribunal’s decision, arguing that, although it was permissible for the Tribunal to find that they had submitted Mr Opisov to detriments, it was an error of law for the Tribunal to allow Mr Opisov to bring a detriment claim where the detriment is dismissal. They also argued that it was an error of law for the Tribunal to hold that they should be liable for post-dismissal losses (although, again, they agreed that it was permissible for the Tribunal to find that they were jointly and severally liable for pre-dismissal losses).
The Employment Appeal Tribunal’s decision
The Employment Appeal Tribunal dismissed Mr Sage and Mr Timis’ appeals, holding that there is nothing in the relevant legislation which prevents employees from bring a claim for detriment arising from protected disclosures where the detriment pleaded is dismissal. Equally, the Tribunal held that there was no error of law in holding that individuals could be personally liable for losses arising from an employee’s dismissal.
Our solicitors’ comments
This case has significant implications for both senior management of businesses and the businesses themselves.
What Osipov establishes is that dismissed employees may bring detriment claims against former colleagues involved in their dismissal in respect of the decision to dismiss them. This is an advantage for the claimant as the burden of proof in establishing a causal link between a protected disclosure and a ‘detriment’ is less onerous (where the claimant has to show that the disclosure was a ‘material influence’ in relation to their treatment) than establishing that they were dismissed because of the disclosure (where the claimant has to show that the dismissal was the cause or the principal cause of their dismissal). Equally, this case also establishes that former colleagues involved in making the decision to dismiss could potentially be liable for a claimant’s financial losses post-dismissal.
There are also added risks to businesses, in that the employer may be held vicariously liable for the detriments (including dismissal) that its employees subject the claimant to. Businesses are able to defend themselves from such claims by establishing that they took all reasonably practicable steps to prevent the conduct in question occurring, but tangible evidence will need to be submitted of such (such as, for example, training in how to deal with protected disclosures, the establishing of policies to deal with such situations, and a commitment on the business’ (and senior management’s) part to prevent whistleblowers from being subjected to any detriment.
Directors, partners, and officers of businesses may wish to establish whether they are covered against the risk of such claims by liability insurance cover.