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Directors Must Pay £2m in Landmark Whistleblowing Case

10 Apr

In the recent Court of Appeal case of Osipov v International Petroleum, it was confirmed that employees who have been dismissed for whistleblowing can make a claim against individual decision-makers within a company, as well as against the company itself.

Mr Osipov was CEO of International Petroleum and dismissed by a director, Mr Timis, who was acting on the instructions of another director, Mr Sage, after whistleblowing.

He claimed automatic unfair dismissal against the company, but also argued that the two directors had subjected him to a detriment by putting him through a sham disciplinary process.

He won both claims and although the directors appealed, the original decision was upheld and Mr Osipove was awarded £2m.

Whistleblowing can now be seen in a similar way to discrimination in respect that individuals can also be held liable. In the most serious cases, the individuals involved can be held personally responsible for their actions. The company may be vicariously liable for their actions, unless it can show that the decision-maker was “off on a frolic of their own”, which the company could not be expected to control.

Unlike in ‘standard’ unfair dismissal claims, in detriment claims linked to whistleblowing, this new case establishes that the employee may be able to get compensation for injury to feelings from individuals and not just the business itself. There is, therefore, a real motivation for employees to consider claiming against individuals.

This can obviously be an extremely complicated and very serious issue for directors, particularly where a decision-maker owns the business and organisations should always seek employment law support in such situations.

For further information, please contact employment@thomas-carroll.co.uk.