Court of Appeal finds employer can be vicariously liable for the detriment of dismissal

In the case of Rice v Wicked Vision Limited and anor (with Protect, the whistleblowing charity, as an intervener) the Court of Appeal found that two employees could bring claims against their respective employers for vicarious liability, for the acts of individual workers who allegedly subjected them to detriment, by dismissing them because they had made protected disclosures.

In practice, this judgment could lead to an increased number of claimants simultaneously bringing claims for both unfair dismissal and the detriment of dismissal in the Employment Tribunal.

The law

Section 103A of the Employment Rights Act 1996 (ERA) provides that an employee can bring a claim of automatic unfair dismissal against their employer if they are dismissed because they made a protected disclosure.

Separately, section 47B of the ERA provides that a worker has the right not to be subjected to any detriment by any act, or any deliberate failure to act, by their employer or by a co-worker, done on the ground that the worker has made a protected disclosure, with the employer being vicariously liable for the acts of the co-worker.

However, section 47B(2) states that section 47B does not apply where the detriment in question amounts to dismissal, which seems to suggest that the proper route for a claim for being dismissed for making a protected disclosure is an unfair dismissal claim under section 103A, rather than a claim for detriment.

Nonetheless, in the 2018 case of Timis v Osipov, the Court of Appeal found that an employee can also bring a claim for the detriment of being dismissed by a colleague under section 47B(1A) of the ERA, suggesting that the drafting of section 47B was incomplete and contradictory.

Facts of the case

The Court of Appeal in Rice v Wicked Vision brought together two separate Employment Appeal Tribunal (EAT) cases which had been decided differently (Wicked Vision and Barton Turns Developments Limited v Treadwell). In the latter case, the employee brought a claim for automatic unfair dismissal and then sought to amend her claim to include various detriments, including her dismissal. The EAT held that it was bound by the Court of Appeal’s decision in Osipov and allowed claims for both unfair dismissal and for the detriment of dismissal against a co-worker (for which the employer would, in turn, be vicariously liable).

In Wicked Vision, the claimant had been employed by the company but dismissed by Mr Strang, who also owned the company. The individual brought a claim for automatic unfair dismissal under section 103A, and also applied to amend his claim to include a claim for detriment in the form of dismissal by Mr Strang under section 47B(1A), meaning the employer would be liable under 47B(2).

The EAT found that 47B(2) prohibited this type of claim and, in doing so, construed the decision in Osipov more narrowly, stating that it was only authority for the proposition that a detriment claim under section 47B(1A) can be brought against a co-worker whose act amounts to dismissal (but not against the employer itself).

The cases were appealed to the Court of Appeal.

Court of Appeal decision

Hearing both cases together, the Court of Appeal found that it was bound by the precedent set in the earlier Osipov case and that employees are permitted to bring detriment claims against a co-worker (and by extension, their former employer), and to claim automatic unfair dismissal against the employer, despite the wording at 47B(2) seeming to disapply this section of the legislation where the detriment in question amounts to a dismissal.

The Court of Appeal made clear, however, that it disagreed with the general finding in Osipov that the drafting of the legislation was incomplete and contradictory. In its view the wording of section 47B(2) was clear, and employees cannot bring a section 47B detriment claim – whether against employer or co-worker – if the substance of their complaint is dismissal by the employer. This section of the ERA had been in the legislation from the date of enactment (this part of the ERA had been amended in 2013 following an earlier case but section 47B(2) had not changed). However, the Court of Appeal was bound to follow the decision in Osipov, unless and until a different finding was made by the Supreme Court or the legislation was amended by Parliament.

Key takeaways

This decision will almost certainly be appealed to the Supreme Court, although a judgment is unlikely before the end of 2026. Until then, in practice, this means that we are likely to see claimants bringing both unfair dismissal claims (under section 103A of the ERA) and claims for the detriment of dismissal (under section 47B).

The effect of this will be that, although claimants will not be able to recover double damages for the dismissal, they can claim financial losses for their dismissal and injury to feelings for the detriment of dismissal, which could lead to higher combined awards. They may also seek to join additional parties, such as dismissing officers, to any tribunal proceedings. Finally, as the burden of proof is lower in a detriment case than in a dismissal case, this may lead to a greater number of successful claims.

Employers may also find that they face pressure from senior managers and dismissing officers for financial and legal protection in the event of them being held liable for the detriment of dismissal, or that senior management are reluctant to participate in disciplinary decisions, particularly where there is an element of whistleblowing.