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Employment Law Case Update: Unfair Dismissal after Whistleblowing Disclosure

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Managing whistleblowing in your organisation is a fine balancing act.  Understanding how to treat an employee is of vital importance to avoid a tribunal claim; however it's also important that the employee understands how to act after a disclosure.  Our Employment Law team today review the case of Mr P Watson v Hilary Meredith Solicitors Limited 2021 which tells us a dismissal of a whistleblower isn’t always automatically unfair. 

Mr Watson joined the firm in 2017 as its Chief Executive Officer. He brought in a new Finance Director, Mr Ritchie, who very quickly noticed financial irregularities in the business. Both Mr Watson and Mr Ritchie made protected disclosures regarding these irregularities to Ms Meredith, the firm’s founder and Chair, in September 2017. Ms Meredith was “shocked and very upset” on learning of the problems and was “keen to get to the bottom” of them.

A couple days later, Mr Watson resigned and was subsequently placed on garden leave. Relations between Ms Meredith and Mr Watson at this time remained friendly and she tried to persuade him to stay and help sort out the financial issues but he declined. Settlement negotiations were taking place between the parties’ solicitors at this time but were unsuccessful.

Ms Meredith informed Mr Watson that his garden leave was ending and he was instructed to return to work. He resisted returning but did eventually go in to meet with Ms Meredith. At this point, the tone of their relationship changed. In their meeting, Ms Meredith criticised Mr Watson for resigning, saying that his resignation had “spooked” the rest of the staff and that he should have stayed on to try and solve the problem rather than running for the hills.”

Mr Watson’s employment was then terminated with immediate effect for gross misconduct. In the termination letter, Ms Meredith stated Mr Watson’s actions “fell substantially short of what should be expected of a director and fiduciary and was in breach of numerous obligations to the company.” He filed a claim for automatic unfair dismissal with the Employment Tribunal (ET), arguing that he had been dismissed for making a protected disclosure.

The ET dismissed Mr Watsons claim after coming to the conclusion that Ms Merediths reason for dismissal was not materially influenced by the disclosures.” Ms Meredith dismissed Mr Watson because of his actions following the disclosure, which she believed had de-stabilised the business, and his actions could be severed from the whistleblowing disclosures themselves. Mr Watson then appealed to the Employment Appeal Tribunal (EAT).

The EAT dismissed the appeal. It reasoned that whistleblowing disclosures can, in some cases, be severed from the subsequent actions of the whistleblower and in such cases it is open to a tribunal to find that a dismissal was not materially influenced by the whistleblowing disclosure itself, but by the conduct of the whistleblower after the disclosure. Looking at the facts of the current case, including that fact that Ms Meredith never criticised Mr Watson for making the disclosures, she herself was not at fault for the irregularities, and she promptly investigated the irregularities rather than try to cover them up, the EAT concluded that the ET was entitled to find that Mr Watson’s dismissal was not materially influenced by his whistleblowing disclosure but was instead due to his subsequent actions.

Employers may be comforted to know that in certain circumstances the subsequent actions of an employee who made a whistleblowing disclosure may be severed from the disclosure itself. Employers should still be cautious however when deciding to dismiss a whistleblower or subject them to a detriment, and only take such action where they can show the dismissal or detriment is in response to separate actions and not “materially influenced” by the whistleblowing disclosure itself.

If you have any questions regarding this article, you can call our Employment team today on 023 8071 7717 or email employment@warnergoodman.co.uk.

This was previously part of our weekly Employment Law Newsletter. If you would like to subscribe, please email us at events@warnergoodman.co.uk or just fill in our subscription form.

ENDS

This is for information purposes only and is no substitute for, and should not be interpreted as, legal advice.  All content was correct at the time of publishing and we cannot be held responsible for any changes that may invalidate this article.