Company Directors personally liable for £843,000 judgment in whistleblowing case

2018-10-23 Jennifer Renney posted:

Company Directors personally liable

Company directors should sit up and take note of the recent Court of Appeal case of Timis v Ospiov and the fact that they may not be immune from personal liability regarding claims for unfair dismissal based on “whistleblowing” detriment ie protected disclosures.

In this case, two of the directors of International Petroleum Ltd (IPL) were found to be personally liable, as well as jointly with IPL, for conduct leading to the dismissal of their CEO Mr Osipov after he made protected disclosures.

The Employment Appeals Tribunal had awarded Mr Osipov the sum of £843,372 as compensation for unfair dismissal and detriment for making protected disclosures being (a) £563,461 for unfair dismissal, (b) £16,500 for injury to feelings, (c) £169,702 for unpaid salary; and (d) £93,708 for failing to comply with the ACAS Code. The problem was that Mr Osipov was unable to enforce the judgment against IPL as it had gone into liquidation.

Mr Osipov therefore took his case to the Court of Appeal which has unanimously decided that the two directors who were involved in conduct leading to the dismissal are to be held personally liable for the compensation payment to Mr Osipov.

This case raises the bar for directors who will need to consider their conduct very carefully, as this case challenges their limited liability and makes it clear that directors will be held personally responsible for their actions where whistleblowing detriment leading to unfair dismissal is concerned. For directors or employees on the receiving end of sanctions because of their whistleblowing, this case will provide an extra layer of security.

If you have queries regarding your rights or obligations arising from workplace issues, get in touch with us by giving us a call on 01225632240 to speak to one of our experienced solicitors. You can also email us at info@renneyandco.com with any questions.

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