In Wilson Solicitors LLP and others v Roberts the Court of Appeal has held that workers are entitled to claim post-termination losses in respect of pre-termination detriments. This is the case even if the intervening termination was lawful. The termination does not break the chain of causation. To succeed, a claimant will need to show that their losses would not have arisen but for the earlier detrimental treatment.
Employees who are terminated because they have made a protected disclosure can bring an automatic unfair dismissal claim against their employer, seeking compensation for post-termination losses. They may also be able to bring a detriment claim against co-workers or agents of the employer in respect of pre-termination detriments, seeking compensation for post-termination losses. This was recently seen in the case of International Petroleum Ltd v Osipov (you can read our report on that case here). In some cases, the employer could be vicariously liable for that detrimental treatment (as discussed recently in the case of Royal Mail Group Ltd v Jhuti). In addition, the employee could bring a detriment claim against the employer in respect of pre-termination detriments. Here, they would usually be seeking compensation for injury to feelings.
What an employee cannot do is bring a detriment claim about the termination itself against the employer – this must be brought as an unfair dismissal claim. The position is different for workers who are not employees. Workers are not entitled to bring unfair dismissal claims. They are only protected from suffering a detriment, however, they are entitled to say that the dismissal itself was a detriment.
In a successful detriment claim, the Employment Tribunal can award an amount of compensation it considers to be just and equitable in all the circumstances. There is no cap on the amount of compensation that can be awarded.
This case concerned a detriment claim brought by a worker against an LLP for post-termination losses which, he said, arose from detriments which took place shortly before he was expelled from the LLP.
The Claimant was a solicitor and member of Wilsons Solicitors LLP. He held the position of Managing Partner, as well as two compliance roles. He also sat on the Board of the LLP. The LLP was governed by a Members' Agreement.
In July 2014 a complaint of bullying was made against the LLP's Senior Partner. The Claimant was responsible for investigating that complaint and related compliance issues. He was due to present his findings to the Board at a meeting on 21 October 2014. However, the rest of the members of the LLP did not attend the meeting, and a few weeks later they voted to remove the Claimant as Managing Partner. He was also subsequently removed from his compliance roles.
In January 2015, the Claimant wrote to the rest of the membership stating that they had repudiated the Members' Agreement, he accepted that repudiation and he was giving one month's notice of termination of his membership. The LLP denied any repudiatory breaches and rejected the notice. They told the Claimant that they expected him to return to work. The Claimant rejected this and maintained that his membership would cease on 5 February 2015. He did not return to work and was formally expelled from the LLP on 30 April 2015.
The Claimant brought a claim in the Employment Tribunal against the LLP and other individual respondents (together, the Respondents) alleging that he had been subjected to pre-termination detriments for having blown the whistle. However, he did not claim that the actual expulsion from the LLP was a detriment. The Claimant sought compensation of approximately £3.4 million, most of which represented future loss of earnings.
In November 2015, the Employment Tribunal struck out the claim that the Claimant's membership had been "constructively terminated" on the basis of previous case authority which had said this was not possible in an LLP context. The Tribunal also struck out the part of the claim that concerned post-termination losses, without providing reasons for that decision.
The Claimant appealed to the EAT. Although the EAT agreed that there was no constructive termination, they overturned the Tribunal's decision to strike out the part of the claim concerning post-termination losses. The EAT said that the Claimant could claim post-termination losses provided they were properly "attributable to" the detriment. This was the case even if the detriments had been followed by a lawful termination. In other words, a lawful termination did not break the chain of causation between the pre-termination detriment and the post-termination losses. The Respondents appealed this point to the Court of Appeal.
The Court of Appeal dismissed the Respondents' appeal. Relying on the decisions in Reynolds v CLFIS (UK) Ltd and Royal Mail Group Ltd v Jhuti, they held that the Claimant could pursue a claim for post-termination losses caused by pre-termination detriments. They agreed with the EAT that a lawful termination did not break the chain of causation between the pre-termination detriment and the post-termination losses.
When determining what amount of compensation was just and equitable in a detriment claim the Employment Tribunal has to consider a number of factors, including whether the loss is "attributable to" the detriment. The Court said that "attributable to" imported the common law concept of "but for" causation.
In this case, the Claimant's position was that he suffered detrimental treatment which caused him to withdraw his labour. It was this that led to his lawful expulsion from the LLP and his subsequent losses. If this chain of events could be shown, then it would be hard to say that the losses were too remote a consequence of the detriment.
The focus for employers has typically been on ensuring that any termination of a whistleblower was for a reason unconnected to the making of the protected disclosure. In cases where the employer has been unhappy with the whistleblower's behaviour in connection with their protected disclosure, this has required them to show that the dismissal was rooted in the manner of the pursuit of the disclosure, rather than the disclosure itself. In other words, there is a need to demonstrate that the reason for the dismissal is "genuinely separable" from the protected disclosure itself. This can be a difficult line to tread in practice.
What this case makes clear is that even if an employer manages to negotiate the tightrope towards a fair dismissal, they may still be at risk of a high value whistleblowing claim based on future loss of earnings. The whistleblower's position here would be that pre-termination detriments meted out by the employer and/or his co-workers drove him to the offending behaviour which gave rise to the fair dismissal. In other words, but for the detrimental treatment he would not have been dismissed and his post-termination losses would not have arisen.
To neuter this risk employers need to take the utmost care to ensure that whistleblowers are not subjected to detriments as a result of having made a protected disclosure. The starting point is to make sure you have a whistleblowing policy in place which explains the consequences of victimising a whistleblower (i.e. disciplinary action). Furthermore, appropriate training should be given to line managers and cascaded down to all employees.