The Court of Appeal recently ruled in the case of Timis and Sage v Osipov that individuals, as well as the employer, can be personally liable with regards to a whistleblowing dismissal.
In this particular case, the directors of the company were found to be jointly and severally liable along with the company itself to compensate the employee for his losses which he suffered as a result of his dismissal, which was connected to whistleblowing. He was awarded over £1.7 million as compensation.
The claimant, Alexander Osipov was CEO of International Petroleum Ltd (IPL) until he was dismissed for blowing the whistle about wrongdoing in relation to contracts in the Republic of Niger. Crucially, two directors of IPL, Frank Timis and Anthony Sage, were instrumental in his dismissal.
Mr Osipov brought successful claims in the Employment Tribunal for whistleblowing detriment and automatically unfair dismissal. However, IPL had become insolvent and in order to obtain full compensation for the losses flowing from his dismissal, Mr Osipov needed to show that Mr Timis and Mr Sage were personally liable to compensate him as he was unable to claim his compensation from the insolvent company.
The success of pursuing the two individuals in this case means that company owners will no longer be able to rely on the protection of limited liability in respect of similar whistleblowing claims by using the protection of their company, but instead can now find themselves personally liable.
Fortunately, the two directors had the benefit of Directors and Officers Insurance in this case.
If you have any queries on this or any other HR issue, or if you require further information on Directors and Officers insurance, please contact firstname.lastname@example.org.