Benjamin Gray writes for Practical Law on The Problem of Iago: Whistleblowing and Tainted Information. This article has been reproduced with the permission of the publishers. For further information visit www.practicallaw.com or call 020 7542 6664.
“Tainted information”, or “Iago”, cases, in which employers are manipulated into dismissing employees by their co-workers, have thrown up difficult questions for Tribunals in both whistleblowing and discrimination claims. The latest guidance has been given in two recent cases: Royal Mail Ltd v Jhuti  EWCA Civ 1632 and International Petroleum Ltd v Osipov  UKEAT/0058/17.
Jhuti: the facts
The Claimant worked for the Respondent as a probationary employee. She made protected disclosures. In response, her line manager pressured her into retracting her allegations, criticised her performance and singled her out for unreasonable performance improvement targets. These were held by the Employment Tribunal to be detriments. In due course, she was dismissed for poor performance.
The person who took the decision to dismiss was not the Claimant’s line manager. She based her decision on the information before her. She was not provided with the emails that formed the Claimant’s protected disclosures, and was positively misled by the Claimant’s line manager about the nature of her disclosures. Meanwhile, the Claimant was so stressed by the situation that she had been signed off sick and incapable of participating meaningfully in the dismissal process.
The dismissing officer, thus misled, genuinely and reasonably believed that the Claimant’s performance fell below the expected standard, and dismissed the Claimant. Based on the tainted information placed before her, the Tribunal saw this as the ‘inevitable’ outcome.
“For Nought I Did in Hate, but All in Honour” – The decision of the Court of Appeal
The Claimant brought claims for automatic unfair dismissal and detriment on the grounds of making protected disclosures. The central question on appeal was whether the Respondent employer could be liable for an automatic unfair dismissal where the dismissing officer was not personally motivated by any whistleblowing.
Underhill LJ (with whom Jackson LJ and Moylan LJ agreed) held that when assessing the reason for dismissal, ‘the tribunal is obliged to consider only the mental processes of the person or persons who was or were authorised to, and did, take the decision to dismiss.’ The Court followed the previous decision of Orr v Milton Keynes Council  EWCA Civ 62, an ordinary unfair dismissal case that focussed the Tribunal’s inquiry into the reason for dismissal on the mental processes of the specific person appointed to take the decision to dismiss.
Accordingly, it was the dismissing officer’s decision that had to be assessed in this case, not the line manager, who had played no formal role in the process. As the dismissing officer was not motivated by any protected disclosures, the Court could not say that those disclosures were the reason for dismissal. The claim for automatic unfair dismissal therefore failed.
The Court of Appeal did, however, note that the position might have been different if an “Iago” figure:
Liability for dismissal consequent on detriment
The matter, however, did not end there. The Claimant had succeeded in her claims that her line manager’s behaviour amounted to unlawful whistleblowing detriments. The question therefore arose whether she was able to recover damages for dismissal as a consequence of those detriments.
The Respondent conceded that this was possible in principle, but in essence confined itself to arguing that that was not how the case had been put before the Employment Tribunal below. That was rejected on the facts by Underhill LJ, who concluded that ‘on the arguments advanced before us [there was] no obstacle in principle to the Claimant recovering compensation for dismissal consequent on detriment’ (emphasis added). The Court of Appeal did not decide more widely whether in general Claimants could recover damages for dismissal consequent on detriment.
However, this question has been addressed by the EAT in Osipov, where Simler P held that there was no principled reason to prevent employees recovering damages for a detriment resulting in dismissal, not least because otherwise a Claimant might be left without a remedy in a tainted information case.
Osipov has been given permission to appeal by the Court of Appeal, with a backstop hearing date of November 2018. Underhill LJ expressly refused to express a view on Osipov in Jhuti despite being invited to do so.
The current legal position
The current legal position can therefore be summarised as:
Even if logically and conceptually clear, these decisions pose difficulties for both potential Claimants and Respondents. A worker who fears they are being “fitted up” may have to begin proceedings (or at least Early Conciliation) before a decision has been taken to dismiss, to stay within time limits, with all the attendant risks that involves. Employers will be understandably concerned at the possibility of potentially uncapped vicarious liability for the acts of subordinates about which they not only knew nothing, but were actively misled.
In the next part of this blog I consider the appropriate steps and matters to be considered by both claimants, to enhance their prospects of succeeding in a claim, and by respondents faced with defending such a claim.