News

06/12/2017

Royal Mail Ltd v Jhuti

News

Royal Mail Ltd v Jhuti [2017] EWCA Civ 1632

This recent judgment of the Court of Appeal resolved two important questions:

1. Where a line manager, who is not involved in the investigatory or disciplinary process, has tainted the evidence supplied to a person deciding whether an employee should be dismissed, and that decision-maker is innocent of any discriminatory motivation, whose knowledge or state of mind is to be attributed to the employer for the purpose of s.103A of the Employment Rights Act 1996 (ERA 1996)?
2. Can an employee recover damages for dismissal consequent on detriment in the whistleblowing context?

The facts

The Claimant (J) made protected disclosures to her line manager (W). W put pressure on J to withdraw the allegations and made her email him to say that they were withdrawn. W then became critical of her performance and put together a series of performance-related emails to suggest J was a poor performer. An independent, senior manager (V) was appointed to consider J’s future at Royal Mail. J emailed V regarding the performance concerns and referenced the protected disclosures. V queried this with W, who disingenuously showed V only the email from J withdrawing the allegations and suggested that the matter had been resolved. V dismissed J with a genuine and reasonable belief that J was a poor performer.

The ET found that J had suffered 2 [please read para 21 of the Judgment] specific detriments (such as harassment by W) under section 47B of the ERA 1996 on the grounds of the protected disclosures, but that the reason or principle reason that J had been dismissed was not due to any of her protected disclosures (pursuant to s.103A ERA 1996), because even though W was motivated by the protected disclosures, V was not. Royal Mail appealed and J cross-appealed to the EAT. Mitting J in the EAT resolved the matter in J’s favour and Royal Mail appealed that decision.

(1) Whose knowledge or state of mind is attributed to the employer under s.103A ERA 1996 – the innocent decision-maker or the line-manager with a discriminatory motivation?

In a judgment delivered by Underhill LJ, the Court of Appeal analysed the decision of Orr v Milton Keynes Council [2011] EWCA Civ 62. In Orr, which related to the same issue in respect of section 98 of the ERA 1996 (the provision relating to ordinary unfair dismissal) it was held by a majority that the employer should only be attributed with the knowledge or the state of mind of “the person who was deputed to carry out the employer’s functions under section 98”. Jhuti followed Orr on the basis that the language in section 103A was identical to the language in section 98, and there was no justification for taking a different approach to s.103A. On the facts of this case, V was the person deputed with these functions, and so the s.103A claim failed.

The Court of Appeal helpfully considered some other factual scenarios obiter at [60]-[63]:

• Where a colleague with no managerial responsibility procures the dismissal by presenting false or tainted evidence from which the decision-maker is innocently (and reasonably) misled, the employer’s knowledge is not tainted and the dismissal is fair.
• Where the manipulator is the victim’s line manager but does not have responsibility for the decision to dismiss, but they influence or provide tainted evidence to an unknowing dismissing officer, Orr establishes that the employer’s decision to dismiss is fair, and that decision is binding.
• Where the manipulator is a manager with some responsibility for the investigation (e.g. if A is given responsibility for investigating allegations which are then presented to another manager (B) as the factual basis for a disciplinary decision), there would be a “strong case” for attributing the motivation and knowledge of such a manager to the employer, because the conduct of the investigation is part of the deputed functions under s.98. However, merely supplying documents to the HR department or answering a query about a complaint would not be enough to make that person an ‘investigator’ for this example.
• Where the manipulator is someone near the top of the management hierarchy (e.g. a CEO), the Court of Appeal declined to express a definitive view, but the implication is that their influence would be treated as imputed knowledge of the employer.

(2) Can an employee recover damages for dismissal consequent on detriment in the whistleblowing context?

Section 47B(2) of the ERA 1996 makes clear that it does not apply “where the detriment in question amounts to dismissal”. However, before the Court of Appeal, Royal Mail did not pursue an argument that this excluded any such claim, arguing instead that J had failed to plead her claim on this basis. The Court of Appeal disagreed with this pleading point, holding that since the section 47B(2) argument was not pursued, there was no obstacle ‘in principle’ to J recovering compensation for dismissal consequent on the detriments that had been found [78] however, practically, this was a question of fact for the ET to determine at the remedy hearing.

Whilst declining to express a concluded view, the Court of Appeal went on to consider, obiter, what impact 47B(2) had on such a claim given the importance of the issue in other cases. It observed (at [79]) that:

a) In CLFIS v Reynolds [2015] EWCA Civ 439, losses suffered due to dismissal consequent on detriment arising from discrimination were held to be recoverable. There was no reason to adopt a different approach in the whistleblowing context;
b) That section 47B(2) only precluded a claim where the cause of action “amounts to a dismissal”;
c) It is arguable that in this kind of case, the relevant detriment is the prior treatment complained of, with the dismissal being only a consequence of the detriment; but that
d) This argument may not be so straightforward and careful attention had to be given in this context to Melia v Magna Kansei Ltd [2005] EWCA Civ 1547.

A copy of the judgment, can be found here.

Simon Gorton QC and Jack Mitchell (instructed by Weightmans) appeared for the Appellant.

Note by Darshan Patel, Pupil at Old Square Chambers.

Court of Appeal, Royal Mail, Jhuti