The scope of whistleblowing detriment claims and the Osipov decision were reviewed by the Court of Appeal in the linked cases of Rice v. Wicked Vision Limited and Barton Turns Developments Limited v. Treadwell. On Friday the Court of Appeal gave its eagerly awaited judgment.
Tl,dr? The CA took the opposite view from Osipov on the correct construction of s.47B Employment Rights Act 1996 [ERA], but held that it was bound by Osipov. Employees can bring dismissal-related claims under both s. 47B and s.103A ERA.
Background
In 2013, s. 47B of the ERA was amended to enable employees and workers to bring claims for whistleblowing detriment against co-workers. Detriments against co-workers can include acts amounting to dismissal, e.g. a manager’s decision at a disciplinary hearing or in a redundancy exercise, an instruction to dismiss or even carrying out the acts of dismissal. There was no change to s. 47B(2) which provides that “this section does not apply where the worker is an employee, and the detriment in question amounts to dismissal (within the meaning of Part X)”.
Part X of ERA contains s. 95 which defines ‘dismissal’ and s.103A which provides that an employee’s dismissal is automatically unfair if the reason or principal reason is the employee has made a protected disclosure.
The issue in both appeals was one of pure law, namely the scope of ss. 47B(1A) and (1B) and what is exempted under s. 47B (2): can employees bring dismissal claims under s.47B or are they confined to s.103A? There are significant differences in what these claims involve, in particular: i. under s. 47B, the burden of proof of causation is on the employer, not the claimant; ii. under s. 47B, the claimant can recover damages for injury to feelings; iii. under s.103A, the claimant can apply for interim relief, and reinstatement if successful, but may not recover for injury to feelings.
Decision in Osipov
In Osipov, the claimant brought proceedings against co-workers only because the employer itself was insolvent. The claims were brought under s.47B(1A). The co-workers included Mr Timis, the principal shareholder and director, whose personal liability was insured.
Underhill LJ gave the unanimous judgment of the Court of Appeal, that claimants could bring claims against co-workers for acts of detriment amounting to dismissal under ss 47B (1A). Further, it expressly held that the employer could be vicariously liable under ss 47B (1B), and that this liability was not excluded by s. 47B(2). Underhill LJ expressly endorsed the reasoning in the EAT of Simler P (as she then was), that an expansive interpretation was to be preferred as better reflecting the intention of Parliament.
All that section 47B(2) excluded, the CA held, is a claim against the employer in respect of its own act of dismissal. Thus, an employee could bring parallel claims against the employer, under s. 47B(1B) for vicarious liability for an act amounting to dismissal by a co-worker, and under s. 103A for automatically unfair dismissal. Underhill LJ recognised this as ‘inelegant’, but preferable to the anomalies which would otherwise arise.
Wicked Vision decision by Bourne J in EAT
The EAT considered whether the ET had been right to refuse to let the claimant amend to claim under s. 47B (1B) where she had already brought a claim under s.103A.
Bourne J considered that he was not bound by Osipov, as that case had concerned claims under s. 47B(1A) and therefore, any comments in Osipov about s. 47B(1B) were obiter. Bourne J noted that there were good reasons why an employee should be able to bring a s.47B(1A) claim in relation to dismissal, notwithstanding the right under s.103A, e.g. if the employer was insolvent or would not be liable under the reasonable steps defence. However, Bourne J held it was different under s.47B(1B) and that claims for detriment amounting to dismissal could not be brought against the employer, where an employee could claim against the employer under s.103A.
Wicked Vision decision of Court of Appeal
The arguments were keenly pitched. Wicked Vision emphasised the plain and natural meaning of the statutory language, and argued that the words in s. 47B(2) ‘amount to dismissal’ under Part X did not refer to unfair dismissal under s.103A. Rather, with echoes of Johnson v. Unisys, it meant where the substance of the complaint is the dismissal, the employee should bring that claim under Part X, not s. 47B.
The claimant’s approach, supported by the whistleblower’s charity Protect, was that Osipov was binding in relation to both ss. 47B(1A) and 47B(1B). They argued this was the better legal approach, to avoid the anomaly that workers could claim for dismissal with the lower test of causation and no burden of proof, but that employees would have to prove causation and meet the stricter test under s.103A.
Giving the unanimous judgment, Elisabeth Laing LJ first set out the CA’s view of the proper construction of s.47B(2), and held the words that “amounts to a dismissal (within the meaning of Part X)” were not ambiguous. It does not use the phrase ‘unfair dismissal’, so its scope is not restricted to cases in which a claim of unfair dismissal is or might be available. ‘Dismissal’ is defined in section 95. Therefore, if an employee’s complaint about a detriment is, in substance, a complaint about his dismissal, or if he is claiming losses consequent on his dismissal, he cannot bring a complaint about that detriment under s. 47B; he is necessarily limited to making a claim under Part X [48].
The CA was fortified in this view by the following factors: 1. Only the employer can dismiss an employee. The CA held there was no relevant legal distinction between a dismissal ‘by the employer’ and a dismissal ‘by a co-worker’. There is no such thing, it held, as a dismissal which does not fall within Part X [75]. 2. The Osipov argument was circular. Because s. 47B (1B) provides that dismissal by the co-worker is to be treated as done by the employer, the legal effect of dismissal by a co-worker is that it is dismissal by the employer and thus within Part X [76]. 3. The question is not whether liability is primary, secondary or vicarious: the question is what the liability is for. If the act amounts to dismissal within Part X, only the employer can be liable and only under Part X [77].
The CA in Wicked Vision thus took the opposite view to the construction of s. 47B(2) as had a differently comprised CA in Osipov. However the CA went on to find, contrary to the decision of Bourne J, that Osipov was binding in relation to ss. 47B(1A) and (1B): the interpretation of the exemption in s.47B had to be the same for both sub-sections [89]. Whether the scheme under s.47B(2) is rational, or could be better, was a matter for Parliament [68] and it was up to the Supreme Court to referee the dispute between the two Courts of Appeal [101].
Where does this leave us?
The position in Osipov stands, however with a differently constituted CA having expressly disagreed with its reasoning. Law students may delight in this clash of approach to statutory interpretation, but clients will wish to act cautiously until the conflict is resolved by the Supreme Court. Thus, claimants will wish to continue to plead dismissal claims under s. 47B and s.103A. The CA in Wicked Vision has clarified that there is no need to bring a concurrent s. 47B(1A) claim against a co-worker in order to claim against the employer under s.47B(1B) [87-90]. This clarification is at least a small consolation to those now navigating this uncertain statutory landscape.
View a copy of the judgment here.
