Whistleblowing and detriment claims: the latest developments

Siobhan Bishop: Hello and welcome to this Podcast where we are discussing whistleblowing. I am Siobhan Bishop, a Principal Associate in the Employment and Equalities Team, here at Gowling WLG, and I am joined by Martin Chitty, a Partner in our Team. We are going to focus on detriment claims in a whistleblowing context and how this is panning out since the changes which were made in the Public Interest Disclosure Act, back in 2013, because these detriment claims have been having a more significant impact recently than perhaps we had expected. So, we are looking at the situation where a co-worker victimises a colleague who has made a protected disclosure. They victimise the whistleblower and the whistleblower can bring a claim for detriment against that individual worker personally and, of course, the company can also be vicariously liable for those individual's actions. So Martin, would it be fair to say that managers and organisations should be worried about detriment claims from whistleblowers?

Martin Chitty: Well, the short answer to that Siobhan is, yes, of course they should simply because it appears in the legislation, it has been the subject of claims and it was a very deliberate amendment designed to deal with just the point that you make. It was to stop people victimising people, retaliating against them, just by being unpleasant in the workplace, whatever form that takes, or by not giving them pay increases, those sorts of things, because all of those things are detriments. A detriment in this context is anything negative short of actually being dismissed. But what we have seen, in recent months in fact, are some very interesting developments in this area of the law because although detriment tends to assume it is after the whistleblowing disclosure has been made and is by peers if you like or people close in a working relationship. What we have seen is cases where a detriment has been found where somebody, let us say much more senior, much more important and much more powerful has procured a detriment, they have not actually imposed it but they have actually brought it about and this is what one of the Judges in the Court of Appeal recently referred to as the Iago Effect. So if somebody malevolent is working away in the background getting somebody to do something that they won't actually or can't actually do themselves. So, I'll give you a couple of examples of that. There is one recent case concerning Osipov; [he] comes into a new role, identifies that things are not as they should be. He sees that the oil exploration licences the company have are not being kept to, they are doing things they shouldn't be doing and not doing things they should do, in the way which they should be done. He raises this and suddenly finds that he is being excluded from meetings and discussions; that is a detriment at his level. He was the chief executive. He complains about this and low and behold, not long afterwards, he is dismissed. Well, he has a claim, if that is connected to the whistleblowing, and it was. What he decides to do is run an argument about detriment, the prior exclusion on the one hand and the fact that non-executive directors had brought about his dismissal (they got somebody else to fire him in fact); that is a detriment. Now, the interesting thing about detriment claims, as you mentioned, is not only do you get to sue the company, as you do in all unfair dismissal cases, but you get to sue the individual. So this is much more like discrimination and, of course, I may decide, as the person who suffered the detriment, that it is wildly entertaining to sue you and take your house off you and much more satisfying on a personal level than simply suing the company and getting money off them because you get to feel some of my pain.

Siobhan: I certainly would. Thanks Martin, but what extent does that go to? How much can be recovered in this way?

Martin: Well again, people need to think about this very carefully. One of the aspects of whistleblowing based unfair dismissal claims is that you do not need a qualifying period of employment, so it is very immediate. Detriment claims, just like dismissal claims for whistleblowing, have no upper limit on the awarded damages. Now, a pure detriment claim if you like, what lose do I suffer from being sent to Coventry by my colleagues, might have a very limited financial value to it, I am being paid the same as I was. If I have not got a pay rise or something, but am still employed, then I have got a quantifiable lose haven't I. But I can also claim for injury to feelings. But at the upper end, if the detriment is that you have procured my dismissal, then there is no limit on the claim and I might be without a job. And if you take Mr Osipov's claim, he sued for £1.5 million overall for which the individuals are now as liable as the employer is.

Siobhan: And that is right in the whistleblowing context it particularly can be a career limiting outcome and the recovery of damages will be significantly higher.

Martin: Absolutely and this is something which frankly both employers and employees need to realise. It is very easy for people to throw in, slightly glibly, the fact that I was a whistleblower. But if they run that case, and that is how they are presented in the employment market going forward, then that plainly is going to make future employment prospects slightly less positive, let's say, then they might otherwise have been. If their former employer takes steps to ensure that their employment prospects are bleak by trashing them or by giving poor references, when those references are entirely inaccurate, or motivated by some malign intent, then that can give rise to another claim for detriment. So, you could have more than one detriment claim arising out of the same, not the same set of circumstances, but the same narrative if you like, at different points different detriments will arise.

Siobhan: OK, so just going back to the manipulator behind the scenes. How far does that manipulation need to go or how close does that manipulator need to be to the actual outcome?

Martin: That is a very interesting question and one with which the courts are only really just starting to get to grips. There is a quite important, relatively recent, case involving the Royal Mail and Jhuti which touches on this point. Just to put that into context, Jhuti identifies something with which they are legitimately and properly concerned, they make a protected disclosure, a whistleblowing disclosure, to their manager. Their manager is the person whose conduct they take issue with. Not surprisingly, the manager is not pleased by this and then makes Jhuti's life very difficult, both in terms of the way they managed, the setting of targets, criticism for the failure to obtain targets and the fact the targets are unreasonable, unrealistic. Because of that underperformance issue, Jhuti then ends up facing a disciplinary hearing and ultimately is dismissed. Now, the claim there can be for the whistleblowing disclosure leading to dismissal and also the whistleblowing disclosure leading to a detriment by the manager even though, even though, the person who actually dismissed did not know anything about it, and that is what the case is fundamentally about, is what was in the mind of the individual dismissing? If they did not know about the whistleblowing disclosure, then, as a starting point, they cannot have dismissed because of it and it is quite simple from that point of view, there is insufficient connection between the two. In this particular case, the Court found that there was not enough obvious manipulation of the individual in their decision making, rather than how the facts leading to the disciplinary came about, to lead them to make that connection. What they have said is that if that sort of behaviour is evidenced, so if you decide that you are going to get rid of me and you really do manipulate somebody else to do it, rather like the Osipov case, then there is going to be the distinct possibility of the employer then being found liable for the malign behaviour of the Iago figure sitting in the background because they have got somebody else to do something completely unwittingly, actually, and that is the point, that is where this whole Iago Effect comes about really.

Siobhan: That is not the end of the story, as you just explained so well. So one of the key issues for employers is really going to be knowing when a disclosure has been made which will attract protection status as a whistleblowing disclosure and recognising that is what is being made and how to deal with it. What you say are your top tips for identifying disclosure that is protected and dealing with it?

Martin: As a starting point I think, it's like the old saying, it's all about training, training, training. It is about getting people, line managers, to recognise issues as protected disclosures so there is a finite list of what can be a protected disclosure. The most common ones, in practice, in the working environment are breach of a legal obligation by the employer and that can be about an obligation owed to the individual, there are some rules around that we have talked about in previous podcasts, and there is also the issue about health and safety, so in a more industrial environment or in a construction type environment those issues, if raised as a health and safety issue, could also be a whistleblowing issue. So it's about training people to recognise them as looking at the substance not the form then look at the process it comes through, it might a grievance, it might on the whistleblowing hotline, it might be something else entirely but look at what the issue is actually about. So having then recognised it, how do you deal with it? Engage with the person, don't, as some employers are still tempted to do, cut the person off at the knees, try and bury the issue because it will simply fester and for most employers they want to know what is going on and particularly what is going wrong in their business. So, for those that are brave enough actually to disclose that things are going wrong, as they see it, they need to know that they are going to be supported, that we're not simply going to try and get rid of them. They are not the problem, the behaviour of the people responsible is the problem and we have to look into that. And there is a lot of research both in the HR field and in sort of psychological terms about what motivates those who make whistleblowing disclosures and the vast majority are motivated by a desire to make things right, it's about the behaviour that they see in other that prompts them to raise these things, it's very rarely about protecting their own back.

Siobhan: And there's a big piece around culture of the organisation as well, as you alluded to, in terms of feeling that they are going to be supported and that leadership is behind this initiative. Would you say this is the key to it in whistleblowing?

Martin: Well I think culture is something which companies can decide upon for themselves. If you want people to disclose misconduct, and they're legitimate and proper concerns, you have to set the tone. Otherwise they won't do it. You can have all the policies you want but if people believe, rightly or wrongly, that disclosing something results in them being taken off at the knees, then they are not going to do it, it's not going to happen, things will simply go by the board and if you like, it's another example of the standard you accept in cultural terms, is the standard that you accept. If you want people to be open about things and you want people to improve the organisation's performance and learn from mistakes, they've got to feel safe in coming forward with these things and that's the big issue for many employers and there's a very interesting piece in Matthew Syed's latest book "Black Box Thinking" on all of this which is how certain organisations learn from mistakes and how certain organisation actually almost deliberately and consciously refuse to learn from mistakes because people aren't encouraged to articulate that a mistake has happened.

Siobhan: There's an awful lot of food for thought there Martin. Thank you very much for those tips and insights and as you mentioned, there is another podcast available on the website where we talk about the public interest test in deciding whether someone who makes a disclosure has the whistleblower protection and that podcast was where Martin Chitty was talking to Jane Fielding, another partner in our team. And of course if you have any other questions on whistleblowing or other topics, please feel free to contact Martin or one of the team

Thank you for listening.