David Hoey: Individual liability for unlawful detriments – ouch!

David Hoey

Personal liability is not that common in employment law. It is possible, for example, to sue the person who unlawfully discriminates an employee directly (in addition to the employer). Can an individual employee be liable for causing a fellow employee an unlawful detriment? 

This was the point that was recently considered by the Court of Appeal in Timis v Osipov, which was a relatively unusual case.

The claimant was appointed chief executive of an oil and gas exploration company. The post was offered to him by a non-executive director who was also the majority shareholder. Another non-executive director attended board meetings and exercised management functions. The claimant had made four qualifying disclosures. A few days after the final disclosure, the claimant was dismissed in an email that had been sent by the non-executive director who dealt with management, having been told to send the email by the majority shareholder.

The claimant argued that his dismissal was automatically unfair as the reason for his dismissal, he claimed, was that he had made protected disclosures. He also argued that he had been subjected to an unlawful detriment by both individuals. The Employment Tribunal upheld his claims and found that both directors were jointly and severally liable for the losses flowing from the dismissal – which amounted to over £1.7 million!

The Employment Appeal Tribunal had rejected an appeal by each of the parties. The directors had argued that they should not be liable for any losses that post-dated the dismissal (since such losses would fall under the unfair dismissal claim, which could only be raised against the employer). This was rejected by the Employment Appeal Tribunal.

The Court of Appeal was asked to consider this point. The court considered whether an individual worker could be liable for the dismissal which was claimed to amount to an unlawful detriment. The court examined the complex statutory language and reasoned that a construction which prevented a claimant from bringing a claim against an individual co-worker based on the detriment of dismissal would produce an incoherent and unsatisfactory result, which was not what Parliament intended.

The court accepted that this interpretation could lead to anomalies. For example, it is possible to claim compensation for injury to feelings under a detriment claim, which is not available in unfair dismissal claims. The legal tests are also different in terms of proving the cause of the detriment or the principal reason for the dismissal.

One issue in this case was whether, where there is a detriment that precedes (and causes) a dismissal, but is separate from it, the Claimant can claim for loss flowing from the dismissal based on the detriment (as opposed to the dismissal). The court decided that there was no prohibition on seeking such losses, if it can be shown that they flow from the detriment, subject to the usual rules about remoteness. Ultimately it is a question of fact.

This case is therefore important in showing that it is possible for a claimant to raise proceedings against a fellow employer for causing the caimant to suffer an unlawful detriment even where the detriment amounts to dismissal. It may also be possible to recover the costs of compensation that flow from dismissal even if the detriment precedes the dismissal. Whistleblowing is a complex area of law but one of increasing importance.

David Hoey is a partner at BTO