Directors personally liable in landmark whistleblowing case
The Court of Appeal has upheld a landmark £2m award in a whistleblowing case that saw directors sued for the first time for unfairly dismissing an employee. The earlier Tribunal and EAT decisions in favour of Alexander Osipov, former chief executive of International Petroleum Ltd (IPL), was ruled to have been correctly applied.
Osipov was dismissed in October 2014 after a series of disagreements between himself, Frank Timis – IPL’s largest individual shareholder – and chairman Antony Sage over the business’s operations and specifically the award of contracts in Niger. He brought proceedings to an employment tribunal for unfair dismissal and victimisation on whistleblowing grounds.
In 2016, a Tribunal ruled Osipov had been unfairly dismissed for making protected disclosures under whistleblowing legislation. The tribunal awarded him damages of more than £1.7m and held Timis and Sage individually liable for Osipov’s sacking. The pair appealed the ruling to the EAT, which upheld the ruling and increased the pay out to £2m.
The case establishes that individual directors who decide to dismiss someone for making protected disclosures can be held personally liable for such decisions, and face financial consequences.