Unfair Dismissal and Whistleblowing: Mr. Dowding v The Character Group Plc

By Rachel Ellis Partner & Regional ER Manager &

Jazmeer Jackson Employment Rights Lawyer

Mr. Dowding (the Claimant), formerly a finance director at The Character Group Plc, brought a claim for unfair dismissal against his employer, alleging that he had been dismissed for making protected disclosures (whistleblowing). He argued that the primary reason for his dismissal was that he had raised concerns regarding breaches of the Companies Act 2006. The raising of breaches of legal obligations is one area that can be protected under the whistleblowing legislation.  

The company, listed on the Alternative Investment Market (AIM), disputed this claim, maintaining that Mr. Dowding was dismissed due to a breakdown in trust and confidence, rather than for whistleblowing. 

Tribunal Decision 

The original Employment Tribunal (ET) concluded that Mr. Dowding’s alleged disclosures did not qualify as protected disclosures. The tribunal found that: 

1. The disclosures were not made with a belief that they were in the public interest, or alternatively, any belief was not reasonably held. 
2. The dismissal was a result of a breakdown in trust and confidence, largely due to Mr. Dowding’s conduct during his tenure, which included insubordination and refusal to provide requested documents. 

On these grounds, the ET deemed the dismissal fair and rejected Mr. Dowding's claim of unfair dismissal. 

The Company then applied for costs against Mr Dowding. The Company cited unreasonable conduct on Mr. Dowding’s part in pursuing the whistleblowing claim. The tribunal directed that costs could be awarded on an indemnity basis, meaning they received a higher award. Mr Dowding was ordered to pay the Respondent’s capped costs at £12,563/70 or 21% of its overall claimed cost of £600,000. The Claimant was also ordered to pay the Respondent £20,000 in respect of the cost of the hearing itself. 

EAT Appeal and Outcome 

Mr. Dowding appealed both the liability and the costs decision to the Employment Appeal Tribunal (EAT). The EAT dismissed the appeal regarding unfair dismissal, agreeing with the original tribunal that the dismissal was fair and unrelated to any alleged whistleblowing. 

However, Mr. Dowding's appeal on the costs decision succeeded in part: 

• Costs Assessment Basis: The EAT ruled that while the tribunal had the authority to award costs, it had erred in directing that costs be assessed on an indemnity basis without sufficient justification. The direction for indemnity costs was quashed and remitted for reconsideration. 

• Costs of the Costs Hearing: The EAT also found fault in the tribunal’s decision to award £20,000 in respect of the costs of the costs hearing itself. It concluded that the tribunal had not sufficiently explained why this maximum award was appropriate, considering the specific conduct and circumstances of the case. This issue was also remitted for a fresh determination. 

Key Takeaways 

1. Threshold for Protected Disclosures: This case reinforces the high threshold required to establish that a disclosure is protected under whistleblowing laws. The disclosure must be made with a genuine and reasonable belief that it is in the public interest. 
2. Fair Dismissal for Conduct: Even when an employee claims to have made a protected disclosure, an employer may still dismiss the employee fairly if it can be demonstrated that the dismissal was for unrelated, legitimate reasons—such as a breakdown in trust and confidence due to misconduct. 
3. Costs and Conduct in Litigation: The case also highlights the potential for costs awards against claimants who pursue claims unreasonably. However, any decision to assess costs on an indemnity basis must be clearly justified, especially in the Employment Tribunal context where costs awards are less common. 

Implications for Trade Union Representatives 

Trade union members and representatives should be aware that while raising concerns about potential breaches is a key right, establishing whistleblowing protection requires more than just proving the disclosure was made; there must be a public interest element.  

Additionally, conduct throughout the litigation process, including in pursuing claims without a reasonable prospect of success, can lead to significant costs penalties. It is important to weigh the strength of claims carefully, especially where whistleblowing is alleged, to avoid adverse cost consequences.