Whistleblowing | Is dismissal automatically unfair if the real reason was concealed from the decision maker?

When making the decision to dismiss, it’s important to have all the facts. But what happens if a manager deliberately creates a false narrative around the reason for dismissal, and the decision maker acts on this basis?

While it may not be a common scenario, it raises an important question: in a claim for unfair dismissal, should a Tribunal make a determination based on the real reason for dismissal, or the fabricated reason that the decision maker believed to be true?

Following a lengthy legal battle that recently culminated in a judgment by the Supreme Court, employers now have some indication as to how a court will treat cases of this nature.

Royal Mail Group Ltd v Jhuti

The claimant in this case, Ms Jhuti, was employed by Royal Mail (RM) as a media specialist. During her trial period, Ms Jhuti approached her line manager with concerns that a colleague was breaching Ofcom regulations and company rules. However, rather than investigate the claims, Ms Jhuti was pressured by her manager into retracting her allegations, and it was implied that her employment would be at risk should she press the issue further. Fearing for her job, Mrs Jhuti complied and wrote an email rescinding her claims.

Following her disclosure, Ms Jhuti was subjected to a rigorous performance management programme, and her manager was vocal with HR about the fact that her performance was being closely monitored, falsely painting a picture that she was underperforming. Eventually, the manager pushed for Ms Jhuti’s dismissal and another manager with no prior involvement in the case was appointed to make a decision as to whether her employment should be terminated.

With no cause to doubt the manager’s account, and no sight of the emails in which Ms Jhuti had raised concerns about the treatment she had received following her disclosure, the decision maker elected to dismiss Ms Jhuti on performance grounds. Ms Jhuti had been unable to present her case to the decision maker as she had been signed of with work-related stress at the relevant time.

Employment Tribunal, EAT and Court of Appeal

After her employment was terminated, Ms Jhuti complained to an Employment Tribunal.

She brought claims for:

Automatically unfair dismissal

Under Section 103A of the Employment Rights Act (ERA) 1996, an employee is regarded as having been automatically unfairly dismissed if the principal reason for the dismissal is the making of a protected disclosure – a disclosure that relates to certain categories of serious wrongdoing, including criminal activity, a breach of legal obligation or miscarriages or justice.

Detriment on the ground that she had made a protected disclosure

Under Section 103A of the Employment Rights Act (ERA) 1996, an employee is regarded as having been automatically unfairly dismissed if the principal reason for the dismissal is the making of a protected disclosure – a disclosure that relates to certain categories of serious wrongdoing, including criminal activity, a breach of legal obligation or miscarriages or justice.

In the first instance, the Tribunal upheld the second part of Ms Jhuti’s claim in view of the detrimental treatment she had received from her manager as a direct result of her disclosure.

However, it dismissed the unfair dismissal claim based on the fact that the decision maker had been unaware of Ms Jhuti’s disclosure and had acted on incomplete and misleading information given by Ms Jhuti’s manager. As such, because the protected disclosure had not been a factor in the decision to dismiss, it could not be the reason for dismissal.

The question over whether the principal reason for dismissal was Ms Jhuti’s protected disclosure was contested through various stages of appeal. The Employment Appeal Tribunal overturned the first-instance decision, concluding that the reason for dismissal was the making of protected disclosures. However, the Court of Appeal later reinstated the Tribunal’s initial verdict, maintaining that in determining the reason for dismissal under Section 103A, a Tribunal need only consider the mental processes of the employer’s appointed decision maker.

The Supreme Court

Eventually, the case was heard before the Supreme Court, where the objective was to determine whether the Tribunal had correctly identified the reason (or principal reason) for dismissal taking into account the meaning of Section 103A of the ERA. Ultimately, it concluded that it had not, and that despite the decision maker acting in good faith, the real reason for dismissal was in fact the protected disclosure made by Ms Jhuti.

It held that:

When applying a rule to a company that requires attributing to it a state of mind, it is necessary to consider the language of the rule (if it is a statute), as well as underlying policy. By section 103A, Parliament had clearly intended to provide that, where the real reason for dismissal was whistleblowing, the automatic consequence should be a finding of unfair dismissal.
The Court of Appeal had been incorrect in its assertion that when an employee’s line manager disguises the real reason for dismissal behind a fictitious reason, it is the latter that is to be taken as the reason for dismissal if adopted by the decision maker in good faith. The Supreme Court held that in these particular circumstances – although rare – it is the Court’s duty to look beyond the invention and uncover the underlying reason for dismissal.

For employers, the Supreme Court’s judgment provides the following clarification:

"If a person in the hierarchy of responsibility above the employee determines that she (or he) should be dismissed for a reason but hides it behind an invented reason which the decision-maker adopts, the reason for the dismissal is the hidden reason rather than the invented reason."

Lord Wilson, Justice of The Supreme Court

James Tamm

Director of Legal Services

Expert Comment

As the Supreme Court has said, this is an extreme case. It is rare to find such an obvious example of a line manager deliberately manipulating a situation in order to engineer the dismissal of one of their team. 

However, it does reinforce the need to deal with whistleblowing complaints properly and thoroughly. Managers need to be trained on how to respond in these situations and ideally a whistleblowing policy will exist, giving clear reporting lines to a designated senior manager who can oversee complaints of that nature. That sort of oversight should allow employers to investigate carefully when disciplinary or performance issues arise at the same time as a protected disclosure, and, crucially, ensure one is not the result of the other.