Can an employer be held liable for automatic unfair dismissal for whistleblowing? Who is responsible in determining the reason for dismissal?

Hello and welcome to our first employment video for 2020. My name’s Paul Griffin and I’m Head of the Norton Rose Fulbright Employment Team in London.

Today’s video is on the recent Supreme Court decision looking at how to determine the reason for dismissal. The case considered whether an employer can be held liable for automatic unfair dismissal for whistleblowing even though the person who made the decision to dismiss the employee was unaware that the employee had made the protected disclosures.

Facts

In this case the employee made a protected disclosure to her line manager. She was put under pressure to withdraw her allegations by that line manager, which she duly did. Following the retraction of her allegation, her line manager questioned her performance and she was put on a performance improvement plan. She raised a grievance about her treatment and was subsequently signed off work with work-related stress. Eventually the employer appointed another manager, who had the same level of seniority to her line manager, to consider whether the employment should be terminated. Although the employee did not attend the hearing, she provided evidence by way of email. The line manager was also asked to comment and provided evidence of the retraction of the allegations, but not details of the allegations themselves. The decision-maker accepted the account of what had happened and dismissed the employee on the grounds of performance

The employee brought a claim to the employment tribunal both on the grounds that she had suffered an unlawful detriment due to her protected disclosure or having blown the whistle under the Employment Rights Act 1996. She also claimed automatic unfair dismissal by reason of the disclosures.

Previous decisions

The Employment Tribunal upheld the claim for detriment, but dismissed the claim of automatic unfair dismissal. It held that the protected disclosures were not the reason for the dismissal because the individual who had made the actual decision to dismiss was unaware of the disclosures and had genuinely believed that the performance of the employee had been inadequate, (albeit on tainted evidence). The EAT however, overturned the decision on the dismissal, on the basis that the reasoning of the line manager could be attributed to the employer. The Court of Appeal disagreed with the EAT stating that it was only necessary to consider the mental thought process of the decision-maker in the dismissal process.

The Supreme Court decision

The question that therefore had to be decided by the Supreme Court was whether the employment tribunal had correctly identified the reason for the dismissal. Was it the hidden reason? That’s to say the making of the protected disclosure. Or was it the invented reason, being the performance concerns? The key issue in deciding this was to determine whose state of mind could be attributed to the company.

The Court of Appeal had relied on previous case law that it was the knowledge of the person assigned to carry out the employer’s functions under the unfair dismissal legislation, and only that person, which fell to be attributed to the company. The Court of Appeal did accept that there may be circumstances where it may be appropriate for a tribunal to attribute knowledge to the employer that was held otherwise than by the decision-maker, such as the knowledge of a manager who had responsibility for the conduct of an investigation – but this didn’t apply to these facts.

The Supreme Court however determined that, if a person in the hierarchy of responsibility above the employee determines that the employee should be dismissed for one reason but hides it behind an invented reason which the decision-maker adopts, it is the court’s duty to penetrate through the invention rather than to allow it to infect its own determination. In that situation it is correct to attribute that person’s state of mind to the employer rather than that of the deceived decision-maker.

Practical effect for employers

This decision does seem to clarify that in order for the manipulation to be attributed to the company, it should be done by someone in a position in a higher level of authority than the employee (in this case the line manager). Whilst this does seem to give the Tribunal the right to scrutinise dismissal decisions, the Supreme court did point out that the facts of this case, where the decision to dismiss was taken in good faith, but not for a reason which the employee’s manager had dishonestly constructed, would not be common.

From a practical point of view it is advisable that any decision maker ensures that a thorough investigation has been done to obtain information from all relevant parties, including line managers and HR. It is also advisable that they check whether the employee has made any grievances or protected disclosures which might influence any proposal to dismiss the employee.

Conclusion

This video is intended to provide you with a summary of this case and if you’d like any more information, or have any questions on any aspect of today’s topic, then please don’t hesitate to contact us.

Thank you.