Ms Jhuti reported a concern that a colleague was offering incentives contrary to regulatory guidance and company policy. Her line manager then created a false picture of poor performance, and another manager, acting on that picture in good faith, dismissed her. The Supreme Court held that the reason for the dismissal was the hidden whistleblowing reason, not the invented performance reason adopted by the decision-maker.
The whistleblowing and the invented performance case
Ms Jhuti joined Royal Mail in a sales role and raised concerns about incentives being offered to customers.
She told her line manager that she believed the incentives breached regulatory guidance and company policy. The tribunal found that her reports included protected disclosures.
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After a prolonged meeting with her manager, Ms Jhuti withdrew the allegation by email. The tribunal found that she had come under pressure to do so.
He afterwards held intensive weekly meetings with her alone and told human resources that he would gather material showing that she was below the expected standard. Another team leader, covering while he was away, said that she was happy with Ms Jhuti’s progress. In February 2014 Mr Widmer imposed a performance improvement plan, including a demand that Ms Jhuti disclose client contacts from earlier employment. She told human resources that his treatment followed the concern she had raised and been forced to withdraw. Ms Rock replied that Mr Widmer would be believed and that the company might dismiss Ms Jhuti by reference to her performance.
Ms Jhuti went on sick leave. A different manager was asked to decide whether to dismiss her.
Ms Vickers, who had not previously dealt with Ms Jhuti, was appointed to review the evidence and decide whether to dismiss her. She was not given the original November emails or the February emails to human resources. Ms Jhuti was too ill to meet her. In emails which the tribunal found often incoherent, she referred to being sacked for telling the truth. Mr Widmer told Ms Vickers that Ms Jhuti had misunderstood the rules and had accepted his explanation. On 21 July 2014 Ms Vickers dismissed her on three months’ notice for failing to meet the required standard.
Two complaints, and the decisions below
Ms Jhuti claimed, first, that she had suffered detriments because she had made protected disclosures. Secondly, she claimed that the dismissal was automatically unfair under section 103A of the Employment Rights Act 1996. That section treats a dismissal as unfair if the reason, or principal reason, is that the employee made a protected disclosure. Unlike an ordinary unfair-dismissal claim, there is then no separate question of whether dismissal was reasonable.
The employment tribunal found four protected disclosures: the three November emails and what Ms Jhuti told Ms Rock on 10 February 2014. It found that Mr Widmer had imposed the targets, meetings and improvement plan, and had bullied and harassed her, without a genuine concern about performance and in order to set her up to fail. It also treated the two salary offers as detriments done on the ground of the disclosures. Those findings were not the direct subject of the Supreme Court appeal, nor was a dispute about whether the detriment complaint had been presented in time.
The tribunal nevertheless dismissed the unfair-dismissal complaint. The disclosures played no part in Ms Vickers’ reasoning. The evidence before her was hugely tainted, but she genuinely believed that performance was inadequate and dismissed Ms Jhuti for that reason. It added that Mr Widmer’s actions made that dismissal inevitable.
Mitting J in the Employment Appeal Tribunal allowed Ms Jhuti’s cross-appeal. He held that, where a manager responsible for an employee manipulated a dismissal decision taken in ignorance of the manipulation, the manager’s reason could be attributed to the employer. On the tribunal’s findings, the reason was the protected disclosures. The Court of Appeal disagreed. Underhill LJ, with whom Jackson and Moylan LJJ agreed, held that the tribunal had to consider only the mental processes of the person authorised to take, and who took, the decision to dismiss. It restored the tribunal’s dismissal of the section 103A complaint.
Whose reason counts as the company’s?
Lord Wilson gave the judgment, with which Lady Hale, Lord Carnwath, Lord Hodge and Lady Arden agreed. The same words, “the reason (or, if more than one, the principal reason) for the dismissal”, appear elsewhere in the unfair-dismissal provisions. The answer therefore also applies where a tribunal must identify the employer’s reason, or decide whether the employer acted reasonably in treating that reason as sufficient. Lord Wilson nevertheless described the facts as extreme: a decision-maker will not often dismiss in good faith for a reason which the employee’s line manager has dishonestly constructed.
A company has no mind of its own, so the court must decide which person’s state of mind is to be attributed to it. That depends on the context and purpose of the provision. Lord Wilson relied on the classic description of a reason for dismissal as a set of facts known to the employer, or beliefs held by the employer, which cause the dismissal. Earlier authority also supported a broad reading, preferring industrial reality and common sense to technicality, and a search for the real reason. Parliament intended dismissal to be automatically unfair where whistleblowing was that real reason.
The Court distinguished Orr v Milton Keynes Council. That case did not require a tribunal to ignore a manager’s deliberate invention of a reason for dismissal which an innocent decision-maker then adopted.
Royal Mail argued that there was no need to go beyond Ms Vickers. A worker already has a right not to suffer a detriment for making a protected disclosure, whether the act is the employer’s own or another worker’s act for which the employer is vicariously liable. The Court rejected the argument. The tribunal had treated Mr Widmer’s acts as the company’s own acts under section 47B(1). More broadly, Parliament had provided an automatic unfair-dismissal remedy where whistleblowing was the reason for dismissal, and section 47B(2) withdraws the detriment right where the detriment amounts to dismissal. Differences between time limits and remedies did not make one right a substitute for the other.
Courts will generally look no further than the reason given by the appointed decision-maker, who will usually hear the competing explanations. Here, however, the reason given by Ms Vickers in good faith was bogus. If a person in the hierarchy of responsibility above the employee decides that she should be dismissed for one reason, but hides it behind an invented reason which the decision-maker adopts, the court must penetrate the invention. The hidden reason, not the invented one, is the reason for the dismissal. The Court did not attribute to the employer every fact known somewhere in the organisation. Limited to a person placed in the hierarchy above the employee, attribution of that person’s state of mind involves no conceptual difficulty.
The tribunal had already found the facts needed for that conclusion, even though it had considered only Ms Vickers’ state of mind. There was no need to remit the issue.
Verdict: The Court unanimously allowed Ms Jhuti’s appeal and restored the Employment Appeal Tribunal’s order. On the tribunal’s findings the hidden reason for dismissal was her protected disclosures, making the dismissal automatically unfair. Compensation was not determined.
