Case update

An innocent decision-maker manipulated by another in disciplinary proceedings is not personally liable for detriment

Overview

In Henderson v GCRM Ltd and ors, the Employment Appeal Tribunal (EAT) held that an innocent manager, who was manipulated by another person during the disciplinary process and consequently dismissed a whistleblower, could not be held personally liable for protected disclosure detriment under s.47B(1A) of the Employment Rights Act 1996 (ERA). The EAT found that the principle set out in Royal Mail Group Limited v Jhuti should not be extended to impose personal liability on innocent individuals under s.47B(1A).

However, the EAT held that the s.103A ERA claim for automatically unfair dismissal had been decided incorrectly by the Employment Tribunal (ET) and clarified how the Jhuti principle should be applied in such claims.

Click here for our key takeaways for employers.

Facts

The Claimant was employed as an embryologist by GCRM Ltd (R1). She made protected disclosures to her employer, R1, and her line manager (R2). R2 began an investigation as part of a disciplinary process, which was ultimately overseen by R2’s superior (R3), who had recently joined R1. The Claimant was dismissed at the end of the disciplinary process.

The Claimant believed that the real reason behind her dismissal was her raising protected disclosures and that R2 had retaliated against her. She therefore brought claims as follows:

1. An automatically unfair dismissal claim under s.103A ERA against R1 as her employer; and

2. Detriment claims under s.47B(1) ERA against R1, R2 and R3 personally.

Employment Tribunal (ET) decision

s.103A ERA claim

The ET found that the Claimant had made protected disclosures but rejected her unfair dismissal claim. The ET considered that R2 was a key influence on R3 during the disciplinary process – R2 “shaped the investigation” and “extensively informed and guided the process”. However, the ET found that although the protected disclosures may have materially influenced the disciplinary proceedings, R3 did not know about the protected disclosures so they were not the sole or principal reason for the dismissal as required for a s.103 ERA automatically unfair dismissal claim. The ET therefore rejected the Claimant’s s.103A automatically unfair dismissal claim.

s.47B(1) ERA claims

The ET found that the detriment claims against R3 and R1 succeeded. In doing so, the ET applied the principle from Jhuti, where the Supreme Court held that if a senior employee deliberately hides the real reason for dismissal (such as whistleblowing) behind a false reason, which the innocent decision-maker then adopts in good faith, the reason for the dismissal will be the hidden one.

For the reasons set out above, the ET found that R2 had manipulated the disciplinary process and therefore, applying Jhuti, R2’s motives could be imputed to R3. As a result, R3 was held personally liable for detriment. By extension, R1 as the employer was held vicariously liable for R3’s actions.

Employment Appeal Tribunal (EAT) decision

The Claimant appealed, arguing the ET had not applied Jhuti to the s.103A claim when considering the true reason for dismissal. R1 and R3 appealed, arguing Jhuti had been wrongly applied to s.47B(1A) claims.

s.103A ERA claim

The EAT allowed the Claimant’s appeal on the s.103A findings. As the issue of Jhuti had been raised, the ET should have made clear findings about whether the innocent decision-maker (R3) had been improperly manipulated by R2.

s.47B(1) ERA claims

The EAT also allowed R1 and R3’s appeal. While the ET had not applied Jhuti to the s.103A claim (which was a mistake), the EAT found the ET was wrong to apply Jhuti to the s.47B(1A) claim. The EAT considered that it could not have been the intention of Parliament to impose ‘unlimited liability upon innocent individuals who have not personally been motivated by a proscribed reason’. The purposive approach taken in Jhuti reflected the need to provide the claimant with an effective remedy. It did this without liability ever having to be imposed upon a wholly innocent party (because the outcome of a successful s.103A claim is that the employer, not an individual, would be liable). The EAT accordingly concluded there was no need to extend Jhuti to complaints under s.47B(1A), and good reason not to do so.

In the course of its ruling, the EAT commented that there was no obvious reason in principle why Jhuti could not, in appropriate circumstances, apply to a claim of non-dismissal detriment against an employer under s.47B(1). Liability in such cases would not fall on an innocent decision-maker.

Key takeaways

  • The principle from the Jhuti Supreme Court case is that if a senior employee deliberately hides the real reason for dismissal (such as whistleblowing) behind a false reason, which the innocent decision-maker then adopts in good faith, the reason for the dismissal will be the hidden one.
  • This Jhuti principle applies to automatically unfair dismissal claims in respect of an employer’s liability, but does not extend personal liability for detriment to innocent individuals.
  • Under s.103A ERA automatically unfair dismissal claims, the real reason for dismissal is critical, even if the decision-maker is unaware of protected disclosures. If a manager manipulates the process, their motive may be attributed to the employer.
  • However, innocent managers who are not personally motivated by wrongdoing should not be held individually liable for detriment under s.47B(1A) ERA.
  • It therefore remains important for employers to ensure disciplinary processes are fair, transparent, and properly documented.