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PART 2 - THE PROBLEM OF IAGO: BRINGING OR DEFENDING A TAINTED INFORMATION WHISTLEBLOWING CLAIM BY BENJAMIN GRAY

This article has been reproduced with the permission of the publishers. For further information visit www.practicallaw.com or call 020 7542 6664.

In his last blog post, The Problem of Iago: Whistleblowing and tained information, Benjamin Gray considered the cases of Royal Mail Ltd v Jhuti [2017] EWCA Civ 1632 and International Petroleum Ltd v Osipov [2017] UKEAT/0058/17 and the difficulties faced by both claimants and respondents in ‘tainted information’, or ‘Iago’, cases, where employers are manipulated into dismissing employees by their co-workers .

In this blog post he looks at possible approaches for parties to take when bringing or defending such a claim. The right approach will vary depending on the particular employer and factual scenario. However, the following are matters that should at least be considered by advisors in such cases, even if the sensible advice in some cases will be to reject them. For employers, some steps will have to be considered before any claim arises.

Claimants

Bring claims against individual workers

Following the Enterprise and Regulatory Reform Act 2013’s amendments, claimants are able to bring claims against co-workers personally for whistleblowing detriments in much the same way as they can under the Equality Act 2010. Although it is not necessary to do so for a detriment claim (which can proceed on the basis of vicarious liability), there may be good reasons to do so where there are issues of company solvency (as in Osipov) or where the respondent may succeed on a “reasonable steps” defence.

Identify the ‘tainting’ or decision to dismiss as an act of detriment

This addresses the issue outlined in Jhuti and CLFIS (UK) v Reynolds [2016] EWCA Civ 439 of a dismissing officer not personally motivated by an unlawful reason. It may also help where any whistleblowing played a significant influence in, but was not the principal reason for, any dismissal (thus only succeeding as a claim of detriment rather than unfair dismissal). Such a claim needs to be formulated with care to avoid falling foul of arguments that it is really a claim for unfair dismissal and therefore excluded by s. 47B(2) of the Employment Rights Act 1996 (ERA 1996).

Consider time limits and Early Conciliation

In most cases the act of detriment resulting in dismissal will predate the dismissal itself. It is unsafe to assume that time will run from the effective date of termination, or that a tribunal will agree to extend time if one holds off until after any decision is made to dismiss (which may be several months after the detriment). Indeed, a limitation defence may still be being taken in Jhuti.

Prospective claimants and their advisors therefore need to consider at an early stage what steps need to be taken to preserve their position in respect of time limits, and this will likely involve the commencement of ACAS Early Conciliation (EC). If a claim against an individual co-worker is contemplated, EC will also have to be started in respect of that specific individual.

This may be rejected by some claimants as too risky, potentially inflaming what may already be a fraught situation, especially as their essential case is that their employer looks unfavourably on allegations of wrongdoing. In some cases it may be considered preferable to defend the dismissal case on its merits without raising a further claim of detriment. If that approach is taken, claimants need to be advised carefully on the risk that creates of any detriment claim’s time limit expiring, with careful exploration of any potential grounds for seeking to extend time later on.

Respondents

Consider taking the reasonable steps defence

Jhuti only provides a defence to unfair dismissal claims, and is largely meaningless if the claimant brings a detriment claim. The reasonable steps defence introduced by section 47B(1D) of the ERA 1996 provides a complete defence if the respondent shows it took all reasonable steps to prevent co-workers from treating the claimant in the way they did. It will be necessary to run this defence to avoid equivalent liabilities in a detriment claim.

It is an inherent risk in a ‘tainted information’ case that the deception may not be uncovered until late in the proceedings, possibly the final hearing itself. It is advisable to consider whether to run such a defence at the outset of proceedings. Although many employers will, for commercial or other reasons, not wish to pursue such a defence, failing to do so increases the risk of liability in the event that their witnesses do not come up to proof.

Beef up whistleblowing policies

The reasonable steps defence requires a respondent to take all reasonable steps to prevent the relevant treatment; if a tribunal identifies something further that could reasonably have been done, it will not succeed. Such steps have to be taken in advance of any complaint of detriment being made. Any employer seeking to run such a defence needs to consider what steps it should take to prevent such detriments in general, and tainted information cases in particular. Possible steps include:

  • Having an active whistleblowing policy;
  • Training workers on that policy;
  • Providing clear sanctions for breaches of that policy, as happens with breaches of equality and diversity policies;
  • Encouraging employees to disclose the detrimental treatment of themselves or others, for example via a confidential hotline.
This last point is important: in discrimination law the reasonable steps defence does not work if co-workers fail to report acts of discrimination. It is likely that the same would hold true in whistleblowing cases.

Do not separate the disciplinary and grievance processes

Part of the problem in Jhuti was that HR had directed that the claimant’s bullying and harassment grievance against her line manager should be handled separately from the dismissal process. The tribunal considered this part of the reason why the dismissing officer did not see the ‘full picture’. Presumably, had the grievance been heard first, or at the same time, it might have uncovered the line manager’s deception. It would therefore seem sensible, where a grievance is raised about the conduct of someone linked to, or a source of information about, the dismissal, that such grievances be addressed before any decision is taken to dismiss.

Clearly identify the reasons for dismissal, and their weight

Where a decision to dismiss is based on multiple factors (e.g. multiple allegations of misconduct), it is useful to identify in any decision and outcome letter what weight each factor bore in the decision to dismiss. This will help all parties assess the causative impact of any allegedly ‘tainted’ factor. Any subsequent argument that, absent a tainted factor, the claimant would still have been dismissed is less likely to be rejected as opportunistic if it is supported by such contemporaneous evidence.

Heightened scrutiny of the dismissal case

Employers cannot afford to “think men honest that but seem so”. The best way to avoid being the subject of a tainted information claim is to avoid making a tainted decision in the first place. Scrutinising material put before the decision-maker and ensuring the word of line management or an investigation officer is not taken as given, but properly assessed for credibility, is the best way of doing this. Active consideration should be given to any claim that information has been tainted and, if such claims are rejected, the basis for doing so should be made clear.

Even if this does not prevent the decision being made, such an exercise may, if part of the company’s general practice, help discharge a reasonable steps defence.

In some cases, it may even be advisable to put evidence of the protected disclosures before the decision-maker. Jhuti implicitly criticised the respondent for failing to do this. The tribunal said that this had meant the dismissing officer had not understood the seriousness of the allegations the claimant raised, allowing the line manager to pull the wool over the dismissing manager’s eyes and suggest it was a misunderstanding. Explicit consideration of a worker’s disclosures may therefore be necessary to properly assess whether they would cause someone to taint information. This approach carries obvious risks and will not be appropriate in every case.

Keep the status of the decision-maker clear

As noted above, Underhill LJ thought there was a ‘strong case’ for an employer incurring primary liability where Iago had a ‘formal role in the decision making process’. It is sensible to clearly identify the roles of individuals in any decision to dismiss to ensure which side of the ‘formal’ line they fall.

Conclusion

These decisions are a double-edged sword for workers and employers. They simultaneously expand and contract the possibilities of whistleblowing claims, in both tainted information cases and more widely. There is no single right way to deal with such cases. Parties and their advisors will need to take tactical and strategic decisions tailored to the specific dispute before them, often at an early stage. The points identified above, however, may serve as a useful checklist of the factors that need to be considered.
Posted: 22.11.2017 at 12:33
Tags:  Comments  Employment Law
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