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Watson -v- Hilary Meredith, (a case of Causation -v- Correlation between protected disclosure and detriment). 

Mr Justice Cavanagh sitting at the Employment Appeal Tribunal refused to draw the inference that the Claimant/Appellant’s protected disclosure must have been the reason for his subsequent dismissal.  The Judge concluded that the employment tribunal, was entitled to find the reason for dismissal was ‘separate and distinct’ from the protected disclosures.

In this case Mr Watson, had joined Ms Hilary Meredith as chief executive and director in June 2017 on a 12-month contract, investing £100,000 into the firm through a share purchase.  A new finance director, Tim Ritchie, recruited on Mr Watson’s recommendation, almost immediately discovered financial irregularities in the business and the pair made protected disclosures to the firm’s owner Hilary Meredith. The disclosures were that costs advances had been wrongly treated as profit costs and not loans, and around £1m was outstanding in unpaid disbursements.

Mr Watson resigned soon after and was placed on gardening leave.  The firm requested he return to work, but he said this was an unreasonable expectation without evidence showing that financial issues had been addressed.

The firm then told Mr Watson he was expected to attend work and that he would be considered in breach of contract if he did not do so. At a meeting between Ms Meredith and Mr Watson, Ms Meredith sought to assured him the problems were not as bad as had been feared and she invited Mr Watson to stay to work through the problem.  She later told him his behaviour had ‘spooked’ the staff, the bank and a fellow director who had resigned. Watson was dismissed in 2017 for gross misconduct, with Mr Meredith saying his conduct fell ‘substantially short’ of what could be expected of a director.

Mr Watson submitted to the EAT that the employment tribunal had erred in law by drawing a distinction between the protected disclosures and the consequences of what he reported. He said the tribunal had failed to consider the possibility that Mr Meredith had been influenced by his disclosures in deciding to dismiss him.

The Judge following a line of many cases decided on this point made a distinction between causation and correlation.  The burden is on the claimant to adduce sufficient evidence from which in the absence of counter evidence, causation can be inferred as correlation is insufficient.  This is also in line with the text of the 47B of the Employment Rights Act 1996, which provides that, “a worker has the right not to be subjected to any detriment by any act, or any deliberate failure to act, by his employer done on the ground that the worker has made a protected disclosure”.

The burden is not discharged by establishing mere correlation, the Claimant must establish fact upon which a causal link between the protected disclosure and the dismissal can be drawn.

This decision gives employers some comfort when managing workplace issues with an employee who has made protected disclosure.  An employee who has made a protected disclosure can still be subjected to performance management or managed under the disciplinary procedure, provided that the action was not on the ground that the employee made a projected disclosure.