Scrase Law Employment Solicitors

Whistleblowing claims and uplifts in compensation

An employee can issue a claim in the Employment Tribunal if they believe they have been subjected to a detriment on the ground that they have made a protected disclosure (known as ‘whistleblowing’).  An employee who has been dismissed will have a claim for automatic unfair dismissal if the reason (or principal reason) for the dismissal is that they have made a protected disclosure.   The Tribunal can award such compensation as it considers just and equitable in all the circumstances, and there is no statutory cap on the award. 

The background

Mr Z was asked to agree to a 30% pay cut for three months because of the impact of COVID on the business, to which he agreed.  The employer later sought to extend the period of the pay cut.  Mr Z raised various concerns in an email and then subsequently verbally in a meeting.  His comments were relayed to Mr S.  During a later telephone conversation, Mr S told Mr Z ‘I’m firing you’ and hung up.

Compensation

Mr Z issued claims in the Employment Tribunal, including detriment and unfair dismissal for having made protected disclosures.  The Tribunal found that Mr Z had been unfairly dismissed during the telephone call.  It found that Mr S subjected Mr Z to a detriment and dismissed him on the ground that he had made protected disclosures.  The Tribunal awarded £1,626,452.07 compensation for detriment against the employer and Mr S, and £3,589.09 against the employer for unfair dismissal.   These awards included an uplift of 20% on the ground that the ACAS Code on Disciplinary and Grievance Procedures had not been followed. 

Mr Z’s contract of employment specified that if the employer terminated his employment, it would pay him £270,000 subject to a confidentiality and non-competition agreement.  The employer argued that as a result, the amount of compensation that Mr Z could receive should be limited to £270,000.  The Tribunal rejected this argument.

The uplift

The employer and Mr S appealed to the Employment Appeal Tribunal (EAT).  The employer argued that in light of the contractual provisions, it was not just and equitable to award Mr Z more than £270,000 in compensation.  The EAT agreed with the Tribunal on this point.  It found that the outcome of what the employer was arguing would have been an unenforceable contractual cap on the Tribunal’s award.

The employer also challenged the uplift to the compensation awarded on the basis that Mr Z’s email did not include the protected disclosures, they were raised verbally in the meeting.  The EAT noted that as a matter of law, an employee must put a grievance in writing for the grievance section of the ACAS Code to apply.  In this case, the obligations under the ACAS Code were triggered by Mr Z’s email and he did not need to raise a further written grievance with the protected disclosures.

In any event, in this case, the uplift arose as a result of the disciplinary section of the ACAS Code due to Mr S dismissing Mr Z.  The EAT noted ‘Where the employer dismisses or takes other action against an employee because, in substance, of what it regards as, or potentially as, culpable conduct, the discipline provisions of the Code will apply.”  The EAT upheld the Tribunal’s decision. It also upheld the Tribunal’s decision to uplift the award against Mr S where it found that he was responsible for the employer’s failure to comply with the Code.

Comment

It is important to remember that individuals can be personally liable for acts of whistleblower detriment and that employees can bring claims against both their employer and that individual.  Compensation can be awarded against the employer for any automatic unfair dismissal; and against both the employer and the individual for any detriment. 

A Tribunal can increase the amount of any compensation awarded against the employer for unfair dismissal by up to 25% where there has been an unreasonable failure to follow the ACAS Code.  In a whistleblowing claim, the award made against the individual can also be uplifted where the Tribunal finds that they were responsible for the failure by the employer to comply with the ACAS Code.

SPI Spirits (UK) Ltd and anor v Zabelin

21 December 2023

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