Employers may now be personally liable for unfair dismissal claims

A recent ruling has increased the scope of statutory protection for whistleblowers to include covered detriments against co-workers under the Employment Rights Act 1996. A Mr. Rice was dismissed by his company owner on the grounds of redundancy in February 2021. Mr. Rice asserted that his dismissal was automatically unfair, given that it was motivated by his protected disclosures. He subsequently applied to amend his claim to include a detriment claim against his owner-employer, alleging that his dismissal was a detriment in contravention of Section 47B of the Act. The core issue arose when he sought to amend his claim to include an additional complaint, specifically that his dismissal constituted a detriment inflicted by a co-worker, for which the owner was vicariously liable under the 1996 Act.

This principle states that the exclusion (Section 47B) only bars a direct detriment claim against the employer for its own act of dismissal. However, it does not bar a claim against a co-worker (under S. 47B(1A)) for the detriment of dismissal. Consequently, if a co-worker is liable for the act of dismissal as a detriment, the employer automatically becomes vicariously liable for that act under Section 47B(1B). This effectively allows the employee to bring a detriment claim against the employer for the act of dismissal itself. 

The ruling creates a crucial pathway through which employees may obtain a more comprehensive remedy for the act of dismissal, no longer solely restricting whistleblowers to a claim of unfair dismissal. This significantly increases the potential value of any award for damages, particularly in distressing cases.

Employees can now pursue the individual co-worker who carried out the dismissal – in this case, the owner of the firm. This is an important concession, especially where a company becomes insolvent, as the personal liability remains. Employers should be wary of their conduct toward whistleblowers, as they may find themselves personally liable for their words and deeds.