Legal

Why an employee’s action after whistleblowing can still result in dismissal

2 Aug 2021 By Gearalt Fahy

In light of a recent EAT ruling, Gearalt Fahy explains how an individual’s behaviour could see them the lose their statutory protection rights

Issue 

Specific statutory protection is given to whistleblowers against dismissal or detriment so that employees can safely raise issues regarding wrongdoing in the workplace. This means that any dismissal will be deemed automatically unfair, regardless of the employee’s length of service, where the reason or principal reason is shown to be the making of the protected disclosure.

The issue in the case of Watson v 1) Hilary Meredith Solicitors Ltd 2) Ms H Meredith was whether the employer’s decision to dismiss the employee who had blown the whistle had been materially influenced by the disclosure of the wrongdoing or whether it was his conduct in refusing to attend work after he had made the disclosure. 

Facts

The case concerned a firm of solicitors. Mr Watson had invested £100,000 into the firm when he had joined as the new chief executive officer and director. However just three months after his appointment, serious financial irregularities came to light, including £1m worth of unpaid disbursements. 

Watson presented this information to Ms Meredith – the owner of the firm – and almost immediately afterwards resigned, at the same time requesting his 12-month notice be reduced. It had initially been agreed that he could be put on gardening leave, but it soon became clear that his sudden departure had caused disruption to the business and had prompted another director to resign. 

Watson was asked to return to work to assist the firm in addressing the accounting problems that had been identified. When he refused to return, he was dismissed on the grounds that his conduct had fallen ‘substantially short’ of what could be expected of a director.

Decision

Watson claimed that he had been dismissed in circumstances that meant it was automatically unfair, as it was primarily due to him making a protected disclosure about the financial irregularities discovered. 

It was accepted by all that he had made a protected disclosure. However, his claim failed as it was held that the reason for the dismissal was not because he had made the disclosure, but due to his actions after he had made it. 

The reason for the dismissal was because of the destabilising impact of him resigning and then refusing to attend work during his notice period. Given that he occupied such a senior position, it was reasonable for the firm to expect that he would assist it in dealing with the problems that had been discovered rather than, as the owner of the firm had put it, ‘running for the hills’. The employer had been entitled to regard this as a breach of his duties as a director and of the terms of his service agreement and to dismiss him as a consequence.

Key point

The decision highlights that while whistleblower protection may apply in a number of cases, as the definition of what is a protected public disclosure is wide reaching, the key issue in most disputes is causation. 

For a claim of automatic unfair dismissal to succeed it has to be established that the reason for the dismissal is the protected disclosure and not something else that the employee has done. 

Every case will need to be assessed on its own facts, and in some, it might be difficult to distinguish between the disclosure and the employee’s actions following the disclosure or even when making it. However, it will be an issue that will need to be considered, as the legal test is not whether ‘but for’ the protected disclosure there would have been a dismissal, it is whether the reason or principal reason for dismissal was the protected disclosure. 

Gearalt Fahy is an employment partner at Gateley Legal

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