Background
This case involves Mr Neeraj Handa, a former director and employee of The Station Hotel (Newcastle) Ltd (“the Company”), who brought claims including unfair dismissal and whistleblowing detriment. Mr Handa alleged that he was dismissed for making protected disclosures about alleged financial improprieties within the company.
He also brought claims of whistleblowing detriment against two external HR consultants: Mr Duncan (the fourth respondent), who investigated grievances against Mr Handa, and Ms McDougall (the fifth respondent), who conducted the disciplinary process that led to his dismissal. Mr Handa argued that these individuals acted as agents of the Company and that their actions contributed to his dismissal, thus making them personally liable.
Key Issues
- Agency and Whistleblowing Detriment
Mr Handa’s case depended on showing that the two HR consultants acted as “agents” of the employer under section 47B of the Employment Rights Act 1996. The tribunal had to consider whether their involvement in grievance and disciplinary proceedings, respectively, meant they were co-liable with the employer for the alleged detriments. - Strike-Out of Claims Against External Consultants
The Employment Tribunal struck out the claims against Mr Duncan and Ms McDougall, finding they were independent contractors and not agents acting on behalf of the employer. It concluded there was no reasonable prospect of establishing an agency relationship based on the facts pleaded and the evidence provided. - Common Law Agency Principles
The EAT examined whether carrying out HR tasks under a contract for services automatically created an agency relationship. It confirmed that simply performing a task on behalf of an employer does not amount to being an agent unless the individual has authority conferred by the employer and is acting on its behalf. - No Personal Liability for Dismissal
The EAT found that neither HR consultant made or implemented the decision to dismiss Mr Handa. Their roles were limited to investigation and recommendation. As such, they could not be held personally liable for the dismissal itself under whistleblowing legislation.
Employment Appeal Tribunal (EAT) Decision
The EAT upheld the tribunal’s decision to strike out the claims against Mr Duncan and Ms McDougall. While the EAT acknowledged that, in some circumstances, external HR consultants might be deemed agents, it agreed with the tribunal that there was no arguable legal or factual basis for such a conclusion in this case.
The EAT also criticised the attempt to equate procedural unfairness or poor investigation with whistleblowing detriment and noted that criticisms of process should be directed at the employer, not external consultants acting under contractual terms.
Significance
This ruling is a clear reminder that not every professional working with an employer under a contract for services can be classed as their “agent” for the purposes of whistleblowing or discrimination law. For trade union representatives, the case underlines the importance of correctly identifying the Respondents when pursuing claims of whistleblowing detriment or unfair dismissal.
Where members are subject to investigations by third-party HR consultants, this judgment confirms that unless those consultants directly take decisions or act under the employer’s authority to do so, they are unlikely to be held personally liable.
Outcome
Mr Handa’s appeal was dismissed. The claims against the two external HR consultants were struck out, and his case proceeds only against the Company and its internal decision-makers.
