Disclosure

The law says that whistleblowers have to make a disclosure either to their employer or to someone who falls under the category of a “prescribed person”. In Schaathun v Executive & Business Aviation Support Ltd, the Employment Appeal Tribunal (EAT) held that a claim for automatic unfair dismissal should not be struck out just because the employee did not tell her employer directly about the disclosure.

Basic facts

Ms Schaathun was a 10 per cent shareholder and the company secretary of Executive & Business Aviation Support Ltd which was set up by in April 2005 by her partner Mr Abbott. In September 2008 he ended their relationship although they continued to live together.

After Mr Abbott was told that Ms Schaathun had been seen photocopying documents at one of the company’s offices, he searched her bedroom and found copies of personal papers. She moved out of the house on 18 December 2008 and he removed her as company secretary the next day. She was dismissed by reason of redundancy in June 2009.

Ms Schaathun claimed ordinary unfair dismissal as well as automatically unfair dismissal on the basis that she had made a series of protected disclosures, including allegations that Mr Abbott was involved in a possible tax evasion scheme and other financial irregularities, to a number of different “prescribed persons” such as her solicitors and HMRC. Mr Abbott argued that she had been dismissed either for redundancy or some other substantial reason (the breakdown of their relationship).

Tribunal decision

The tribunal struck out her claim for automatic unfair dismissal as she had not told Mr Abbott she had made any protected disclosures. As he was not aware of them, they could not have formed part of his decision to dismiss her.

In terms of her ordinary unfair dismissal claim, the tribunal held that the reason for her dismissal was not redundancy but the breakdown of her relationship with Mr Abbott. The dismissal could not therefore be fair as the dismissal procedure was based on a false premise which required Ms Schaathun to address issues which were not the real issues. However, it found that had the company followed a fair procedure it would have reached the same conclusion by the same date and she was not, therefore, entitled to any compensation.

Ms Schaathun appealed on the basis that the tribunal had prevented her from cross-examining Mr Abbott about the transcripts of telephone conversations which showed he knew or must have known about the disclosures.

EAT decision

The EAT agreed with her. Although Ms Schaathun accepted that she had not told Mr Abbott directly about the protected disclosures or shown him any documents in which she had made them, her case was that he was aware or must have been aware of the disclosures by other means. However, she felt pressurised into not pursuing these matters in her cross-examination of Mr Abbott because the employment judge had threatened to strike out her case for unreasonable conduct and had also threatened her with a costs order.

The tribunal was wrong to hold that the disclosures to HMRC were not protected disclosures because Ms Schaathun had not told Mr Abbott about them. It should have considered whether he was aware of the disclosures by other means and therefore whether the reason for dismissal was, in fact, the protected disclosures.

In light of the errors made by the tribunal, along with concern about the conduct of the proceedings by the judge which included striking out allegations of protected disclosures, the EAT held that her claim for automatically unfair dismissal could proceed before a freshly constituted tribunal.