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Nicholas Siddall QC succeeds in Important Clarification of the Scope of the Jhuti Principle

10.09.21

The EAT (HHJ Auerbach) has today handed down its judgment in Kong-v-Gulf International Bank (UK) Limited [2021] EA-2020-000357-JOJ which provides an illuminating discussion of the narrow scope of the principle in Jhuti and discusses why it shall rarely be found to apply.

The Facts

The claimant was employed by the respondent as Head of Financial Audit. A draft audit report prepared by her raised concerns that a legal agreement relating to a certain financial product did not provide sufficient protection against certain risks arising from the involvement of non-bank counterparties. It was not disputed that the claimant’s communications of her concerns about this, and other aspects, amounted to protected disclosures.

The Head of Legal, who had been responsible for the agreement, disagreed with the claimant’s view. She went to the claimant’s office and a discussion took place, following which there were exchanges of emails. The Head of Legal considered that the claimant had impugned her integrity, and raised the matter with the Head of HR and others. She indicated that she was very upset, and could not see how she could continue working with the claimant. She declined mediation. The Head of HR and CEO became inclined to the view that the claimant should be dismissed. The Group Chief Auditor agreed to that course and the claimant was then dismissed.

The claimant complained of detrimental treatment and unfair dismissal for having made protected disclosures. One complaint of detrimental treatment – relating to the Head of Legal’s conduct – would have succeeded, but was out of time. The complaint of unfair dismissal for having made protected disclosures failed. However, the claimant was found to have been ordinarily unfairly dismissed. The claimant appealed against the failure of the unfair dismissal protected disclosure complaint.

The EAT’s discussion of Jhuti

The EAT dismissed the appeal and gave a detailed explanation of the limited scope of the Jhuti principle.

It firstly charted the basis of the Jhuti principle in the following terms:

72. I note the following points. First, the general rule that the motivation that can be ascribed to the employer is only that of the decision-maker(s) continues to apply. Secondly, there is no warrant to extend the exceptions beyond the scenario describe by Underhill LJ [in the Court of Appeal judgment in Jhuti], which will itself be a relatively rare occurrence, and the surely highly unusual variation encountered in Jhuti. Thirdly, whether in the scenario contemplated by Underhill LJ, or in the variation described by Lord Wilson, two common features are that (a) the person whose motivation is attributed to the employer sought to procure the employee’s dismissal for the proscribed reason; and (b) the decision-maker was peculiarly dependent upon that person as the source for the underlying facts and information concerning the case. A third essential feature is that their role or position be of the particular kind described in either scenario, so as to make it appropriate for their motivation to be attributed to the employer.

Turning to the facts of the appeal the EAT held that the distinction between questioning a person’s ability as opposed to their integrity was not the sort of invention which the Supreme Court had in mind in Jhuti

75. In my view the Tribunal undoubtedly came to the right conclusion on this issue, and if anything, with respect, was over-generous to the claimant’s case in its analysis. I say that for the following reasons. First, I agree with the Tribunal that criticising a professional person’s knowledge or competence does not necessarily entail any criticism of their integrity. (For a recent illuminating discussion of the latter elusive but important concept see Beckwith v Solicitors Regulation Authority [2020] EWHC 3231 (Admin).) Secondly, however, I agree entirely with the Tribunal that, whether Ms Harding rightly or wrongly perceived the claimant to have questioned her integrity, as opposed to her know-how, does not remotely take us into the territory of the sort of manipulation or invention that would be a necessary ingredient for Jhuti purposes.         

The EAT also clarified how a person was to be judged to be within the hierarchy above an employee for the Jhuti principle to ‘bite’

78. In addition, I am bound to say that I think that the Tribunal was over-generous in regarding Ms Harding as in the hierarchy of responsibility above the claimant, in the sense meant in Jhuti. In Jhuti itself, the individual concerned was the line manager, who used his position to set Ms Jhuti up to fail. In the present case, while Ms Harding was part of the senior management team in the UK, as the Tribunal itself found, the claimant had, because of her role, a distinct reporting line to Mr Mohammed. There was no suggestion or finding that Ms Harding had “responsibility” for the claimant, or that her dealings with Ms Harding over this matter were in the capacity of Ms Harding being a superior, as opposed to a person, who, because of her role, was a relevant manager from whom a response was required.

Finally for the Jhuti principle to ‘bite’ the manager must actively seek the dismissal of the employee

79. Finally, the Tribunal noted at [162] Ms Harding’s evidence that she was not sure whether the claimant’s conduct towards her warranted her dismissal. “There was a history and “it felt like she could not go on getting chance after chance to improve.” But the Tribunal made no finding that Ms Harding was herself seeking to get the claimant dismissed. Ms Yates and Ms Garrett-Cox were the ones whose thoughts turned at a certain point, to dismissal. It seems to me that, on the Tribunal’s findings, Ms Harding’s role was that she was simply someone who turned to HR for support or advice in relation to her perceived treatment by the claimant, and who was in the position, informally, of being a complainant or witness.

Analysis

The EAT’s judgment repeats comments made by a separate division of the EAT (HHJ Taylor) in University Hospital North Tees & Hartlepool NHS Foundation Trust v Fairhall [2021] UKEAT/0150/20 that the Jhuti principle is limited and only applies on extreme facts. Thus it will not be a test which is readily satisfied.

The judgment also provides clear guidance that the Jhuti principle will not be engaged as regards persons whom have no direct managerial responsibility over the dismissed employee and where they do not actively seek the dismissal of the employee. Significant invention is required before it can be said to apply.

Perhaps the best guidance for practitioners to be taken from the decision is to heed the words of HHJ Taylor in Fairhill and recognise that Jhuti shall rarely be a case that needs to be considered by the Employment Tribunal at all.

40. Despite the Jhuti situation being unusual, the case is relied upon in pretty much every appeal where there is any issue about decision makers.  The arguments about decisions and decision maker have become ever more Baroque; often unnecessarily so.
41. The paradigm of the single decision maker who dismisses for a clearly expressed reason will often apply where the employer has a legitimate reason for dismissal. If an employer really has determined to rid themselves of a whistle blower the process may be complex and involve people who are keen to appear not to have been involved in the decision making; someone who wishes to ensure an employee is dismissed because of their whistle blowing is likely to try to keep to the shadows. Wrongdoers often wish to distance themselves from their decisions. It would be troubling if in such cases excessively complex arguments about the difficulty in determining the precise mental processes of all those involved in the process resulted in a valid claim failing. Fortunately, we can rely on the good sense of the members of employment tribunals to see through such ruses and get to grips with the reason that operated, however it got there, on the mind of the dismissing officer.

Nicholas Siddall QC acted for the successful Respondent in the appeal in Kong and has a particular interest in whistleblowing cases in the financial sector.