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Should an employee leave after blowing the whistle?

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Watson v 1) Hilary Meredith Solicitors Ltd 2) Ms H Meredith

In order that whistleblowers can safely raise issues regarding wrongdoing in the workplace there is specific statutory protection given to them against dismissal or detriment. The issue in the case of Watson v 1) Hilary Meredith Solicitors Ltd 2) Ms H Meredith was whether the employer’s decision to dismiss had been materially influenced by the disclosure of the wrongdoing or whether it was the conduct of the employee in refusing to attend work after he had made the disclosure. 
Mr Watson was dismissed when he refused to return to work after exposing financial irregularities 

Mr Watson had invested £100,000 into Hilary Meredith’s solicitor’s firm when he joined as the new CEO. However, just three months later serious financial irregularities came to light including £1 million worth of unpaid disbursements. After presenting this information to Ms Meredith he resigned and requested that his 12 month notice be reduced. In discussions whilst he was on garden leave he was asked to return as by immediately leaving he had damaged the business. When he refused he was dismissed.

Decision

It was held that the dismissal was not automatically unfair as the reason for the dismissal was not because he had made the protected disclosure but because he had, by immediately giving his notice, taken action which had further destabilised the firm. Given his position it had been expected that he would assist the firm deal with the problems rather than ‘running for the hills’. The employer had been entitled to regard this as a breach of his duties as a director and of the terms of his service agreement.

Key point

Whilst whistleblower protection may apply in a number of cases, the key issue in most is causation. It has to be established the reason for the treatment was the disclosure and not something else that the employee has done. The decision here highlights how the employee’s actions after making the disclosure are separable from the disclosure. The test is not whether “but for” the protected disclosures there would have been a dismissal, it is whether the reason or principal reason for dismissal was the protected disclosures. 

Practice point – legal advice privilege

The legal advice privilege was waived in order to help the employer show the reason for dismissal was not the disclosure. The communications between Ms Meredith and her solicitor were ordered to be disclosed in respect of the advice relating to the dismissal. This was challenged separately as not sufficiently wide in that all communications and not just those relating to the dismissal should be disclosed. The EAT endorsed the approach taken by the Tribunal and confirmed that there were three guiding principles of the law in this area:

  1. That if a party waives privilege, it is taken to have waived privilege in relation to all documents or communications that are concerned with the same issue or transaction. 
  2. That the overriding principle is fairness, and a party is not entitled to waive privilege in a selective way, which would be misleading or give rise to unfairness. Therefore, if privilege is waived in relation to a document or matter, the party concerned is obliged also to disclose any other documents which, if they were not disclosed, would render the disclosed documents misleading or would give rise to unfairness. 
  3. That waiver of privilege in relation to one matter or document does not mean that the party has waived privilege in all of the privileged documents in its possession, in other words waiver can be limited to exclude other matters.

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Gateley Plc is authorised and regulated by the SRA (Solicitors' Regulation Authority). Please visit the SRA website for details of the professional conduct rules which Gateley Legal must comply with.

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