Real Liability.

By Andrew Knorpel, Partner in the Employment team

The Court of Appeal has been particularly busy in the last few weeks dealing with a range of employment-related cases.

In the widely reported case of ABC v Telegraph Media Group Ltd, the Court granted an injunction preventing a newspaper from publishing details of harassment alleged against “a leading businessman” of five former staff who had signed settlement agreements. Amongst other things, these agreements required the former staff to keep their allegations secret.

The Court decided that it was likely that ABC could prove that there had been a breach of confidentiality by either the former staff or those with knowledge of the agreements. The Court also found that the former staff (two of whom had already commenced tribunal proceedings) hadn’t been bullied into signing the agreements. Having carried out a careful balancing exercise and finding that it was not in the public interest for the newspaper to publish its story before a full hearing of the matter next year, the Court granted an interim injunction. Lord Hain then used parliamentary privilege to announce in the House of Lords that the “leading businessman” was Sir Philip Green (who has since denied the allegations).

In the case of Timis and another v Osipov, the Court confirmed that individuals could be held personally liable (jointly with the employer) for their own actions in dismissing a whistleblower. The EAT had previously upheld the Tribunal’s decisions that this could be so and the Court agreed. Ordinarily, a dismissed employee would claim against the employer as they will have the deeper pockets to pay compensation. However, in this case, the employer was insolvent and the individual decision-makers were non-executive directors who were covered by a policy of directors’ and officers’ (D&O) liability insurance. It therefore made financial sense to pursue the individuals as well as the employer.

One of the non-executive directors argued that he shouldn’t be liable as he simply conveyed the instruction given by the other non-executive director. However, the Court found that he had sufficient involvement to be considered as having been party to the decision to dismiss.

Of course, it’s all well and good to be covered by insurance, but this judgment would apply equally to an individual manager below the level of director who was party to a decision to dismiss a whistleblower. Employers should therefore ensure that those who have the authority to take disciplinary action or dismiss have the appropriate HR support to mitigate any risks.

Finally, in the case of Wm Morrison Supermarkets Plc v Various Claimants, the Court upheld a High Court judgment that the supermarket should be held vicariously liable for the acts of Andrew Skelton, a dissatisfied employee subsequently convicted of various criminal offences, who had deliberately exposed salary details and other personal data of around 100,000 staff on the internet. This was the case despite the judgment furthering Mr Skelton’s motive of causing financial and reputational damage to his former employer. The Court observed that employers can always take out insurance to cover themselves for such financial risks.

The contents of this update are intended as guidance for readers. It can be no substitute for specific advice. Consequently we cannot accept responsibility for this information, errors or matters affected by subsequent changes in the law, or the content of any website referred to in this update. © Mundays LLP 2018.

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