Some useful pointers for employers in the handling of protected disclosures, courtesy of the EAT’s recent decision in Argence-Lafon -v- Ark Syndicate Management Limited, a sad example of what happens when an employee lets his unshakeable belief in his own rightness cost him his sense of perspective and ultimately his job.
As almost always with whistleblowing cases, the alleged wrongdoing is greatly less interesting than what happened subsequently. In brief, AL worked for an insurance syndicate in the energy and resources field. A claim was made by an insured party for a tidy $53m following an underground blow-out incident at an oil drilling well. Ark took the view that the incident was covered by insurance and therefore that the claim was legitimate, but AL considered that it was fraudulent, and that the support of Ark’s management for the claim meant that they were in on it too. When he first raised this challenge, he was encouraged by his management to escalate it. If he was right, after all, there was a whopping saving to be made. Ark considered the relevant facts again at AL’s request and reached the same conclusion – so far as anyone there could tell, the claim was legitimate. Unpersuaded, AL continued to agitate and an external expert was commissioned who said the same thing, then followed at AL’s insistence by another who did the same. There was no evidence found to support AL’s allegations of fraud, not on the part of the insured company and still less on the part of Ark’s management.
In commendably restrained terms, Ark told AL that it had investigated the matter as far as it was willing to, that his concerns had been found baseless and that he now really needed to get on with his day job. A lesser man might have taken the hint, but AL was made of sterner stuff and continued to bang his drum when anybody would listen, and increasingly even though they would not.
It became apparent to Ark that AL’s focus in showing the insurance claim to be fraudulent had taken him away from his duties to such an extent that he was described as having “disappeared”. His financial outputs were far below what was required. In November 2020 he was given a series of objectives which required an exponential increase in them. Inevitably, AL objected to some of the targets but seeing his arguments going unheard, he ultimately accepted them. His figures did not improve. Most of his statistics declined against the prior year. In the circumstances, Ark moved to a PIP in May 2021. Equally inevitably, AL contended that both the objectives and the PIP were retaliation for his disclosures, a potentially difficult argument for Ark to deal with given the absence of any prior formal notice to AL that he had been underperforming, and indeed a number of indicators to the contrary, including an increased discretionary bonus.
A grievance in May 2021 made further allegations of fraud against senior Ark management, though again without evidence, and repeated AL’s objections to some of the targets he had been set. Ark could finally bear it no more and AL was dismissed in August 2021 on the basis of a complete breakdown in trust and confidence. The fraud allegations had continued to be made, the company had been unable to obtain real agreement to the PIP or its objectives and AL denied that there were any issues with his performance in the first place. As a result, there was little to no chance of its improving.
So what did the EAT say in relation to the whistle-blowing piece?:
AL’s grudging acceptance of the objectives on the grounds that he had no real alternative did not amount to voluntary agreement and so it was still open to him to argue that those objectives amounted to a detriment.
However, the lengths to which Ark had gone to explore AL’s contentions militated strongly against their then having retaliated against him for raising them. Even though there is nothing in the whistleblowing legislation which requires any particular level of enquiry into the disclosure made, Ark’s being seen to give it appropriate (perhaps even more than appropriate) airtime was cosmetically very powerful. A cursory or superficial review could have led to a different outcome.
Pursuit of his crusade did not give AL licence for dereliction of his ordinary responsibilities, and taking reasonable performance management action against him as a result did not therefore amount to less favourable treatment by Ark on the grounds of his disclosure. However, that was only because the shortfall in his performance was so obvious. Performance management measures taken against a whistle-blower on more marginal grounds, especially where not previously raised, would have been much harder for the employer to explain.
Importantly, once Ark had investigated the issue to death and beyond, and had communicated this to AL, it was no longer reasonable for him to believe that the claim was fraudulent. As a result, those repeated disclosures by AL after that point were not deemed protected, merely incredibly irritating. The key point here is that the investigation by the employer must be reasonably thorough. The employer cannot render an employee’s beliefs unreasonable just by telling him that they are.
It was not material that the question of exactly what had happened underground at the drilling site could not be determined definitively. It remained theoretically possible that AL was right and that the losses caused to the insured party were not covered. However, it was enough for these purposes that Ark and its array of experts had all concluded on a balance of probabilities that the claim was legitimate. That gap between what probably happened and what definitely happened was not something which AL was entitled to explore further.
The EAT noted with approval a particularly punchy line in the ET’s judgement that one of the purported disclosures had been made so long after the event (seven months) that the real reason for it was not a sudden reasonable belief that it was in the public interest, but instead a desire to derail the performance management process which AL knew was heading down the track towards him. Employers should treat this one with care. Pre-emptive strikes on formal processes through allegations of discrimination or other wrongdoing are common, but that does not automatically mean that they are made in bad faith or that the employee does not reasonably believe in them. Here the seven month silence was found too long for the employee to rely convincingly upon a sudden burning sense that the public needed to know, but all these cases will turn on their own facts. If there had been fewer signs of AL’s rejection of the PIP and all it stood for, the balance could have tipped the other way.
Overall, this case is another example of the principle seen in a number of whistleblowing cases, i.e. that there is a difference between an employer taking adverse action because of the fact of a disclosure on the one hand and its doing so because of the manner of the disclosure (or the employee’s subsequent behaviours) on the other. Nothing in being a whistleblower releases you from the normal parameters of your employment relationship, including your obligations to do your job to an acceptable standard, to accept reasonable management instructions and ideally, not to accuse your management of fraud on a repeated basis without some reasonably persuasive grounds for doing so. However, if you are going to seek to rely on that difference to dismiss a dogged employee who just won’t let go of his bone whatever you say, you need your own house to be in order first – to have looked thoroughly into the complaint before rejecting it, to have raised performance concerns when they arose rather than only after he complains, to be able to evidence the harm to trust and confidence being done by his not dropping it, and so on. It is not enough that the whistleblower makes a pain of himself with his inconvenient “truth” and you would rather he left.