Flynn v Warrior Square Recoveries Ltd

Oliver Flynn claims to be a victimised whistleblower. His case has not received substantive consideration because the Employment Appeal Tribunal (EAT) has held that certain proceedings which he commenced in the ET were out of time. It is against that decision that he now appeals to this Court.

Mr Flynn was employed by WSRL as a senior broker. The business is highly specialised. It provides services to Kennedys (a firm of solicitors) and other law firms in relation to the recovery of fees from clients in the insurance industry. At the material time, WSRL was owned by Kennedys. In December 2005 Mr Flynn supplied information to Mr Nick Thomas, the senior partner of Kennedys ( and a former director of WSRL). He amplified it at a meeting in March 2006. In essence, he alleged that two directors of the company had misappropriated a large sum of money. This was capable of amounting to a public interest disclosure (PID). However, the response of the company was to subject him to disciplinary proceedings on the ground that he had breached trust and confidence by making an untrue allegation. On the same day in October 2006 Kennedys wrote to Mr Flynn on behalf of the two directors alleging that he had defamed them and seeking certain undertakings not to repeat the allegations. A meeting was arranged for 31 October but it was adjourned. In September 2007 Mr Coates of Kennedys wrote to Mr Flynn stating that he had completed his investigation but little seems to have happened for some considerable time after that. In November 2009 Mr Flynn was informed by letter that the allegations against him were withdrawn and the disciplinary proceedings were withdrawn subsequently. I should add that the allegations and counter-allegations which I have described in this paragraph have never been the subject of an adjudication. For present purposes, they are simply an attenuated version of the assumed facts, many of which remain disputed.

Throughout this time Mr Flynn remained an employee of WSRL but he was on sick leave from March 2006 until May 2010 when he resigned. The company paid him his sick pay for more than four years notwithstanding that the statutory requirement is limited to 28 weeks.

Mr Flynn commenced proceedings in the ET on 22 September 2010. WSRL applied to strike the claim out on the grounds, amongst others, that it was out of time. On 8 December 2011 in the Employment Tribunal (ET) Employment Judge Davidson concluded that the proceedings were commenced in time but the EAT later (Mr Justice Langstaff, sitting alone) came to the contrary conclusion.

Section 47B (1) of the Employment Rights Act 1996 (as amended) provides:

“…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 person has made a protected disclosure.”

The time limit is provided by Section 48 (3) which states that an ET:

“shall not consider a complaint…unless it is presented –

(a)

before the end of the period of three months beginning with the date of the act or failure to act to which the complaint relates or, where the act or failure is part of a series of acts or failures, the last of them, or

(b)

within such further period as the tribunal considers reasonable in a case where it is satisfied that it was not reasonably practicable for the complaint to be presented before the end of that period of three months.”

It is apparent that time begins to run from the date of the employer’s act or failure to act rather than from the date when the detriment is first suffered.

The reasoning of the ET in support of its decision that the proceedings were commenced in time is contained in this brief passage:

“The Claimant alleges that he has been subjected to a detriment as a result of this disclosure in that he has been under threat of disciplinary action and legal action for defamation. The respondent’s case is that those threats were lifted at the latest by 30 November 2009. However, the Claimant has been consistent and persistent in his view that these threats are still present and, in his mind, repeated by the Respondent’s actions. If he is correct, then the detriment continues and his claim is within time.”

It is apparent from that passage that (1) the relevant acts to which the complaint relates were considered to be the threat of disciplinary proceedings and an action in defamation and (2) the decision was that the proceedings were in time pursuant to section 48(3) (a) and no consideration was given or sought to an extension of time pursuant to section 48(3) (b).

The EAT considered that the ET had fallen into legal error because it had failed to identify the act or deliberate failure to act which had caused the detriment and had “confused a continuing detriment with a continuing cause”. Moreover,

“the latest any identified act, or deliberate failure to act, could have occurred, on the facts of this case either as alleged in the proceedings before the [ET] or found by the judge herself, could be 18 March 2010”

No submissions were made in favour of an extension of time pursuant to section 48(3) (b).

As can be seen from the decisions of the ET and the EAT, it was and it remains, the case for WSRL that no relevant act or deliberate failure to act occurred after 30 November 2009 or, alternatively, 18 March 2010. It is necessary to describe the circumstances which arose at those times.

On 25 November 2009, over three years after Mr Flynn had gone on sick leave and two years after he had been informed that the investigation into his disclosure had been completed, he wrote to Mr Martin. We have not seen the letter but I infer from the terms of Mr Martin’s reply dated 30 November 2009, that Mr Flynn had inquired about the disciplinary hearing which had been adjourned on 31 October 2006 and never resumed. Mr Martin’s letter enclosed the notes of that hearing and added.

“The allegations were withdrawn and the proceedings withdrawn subsequently”

In later correspondence, Mr Flynn continued to request information, documents and assurances. He received some but by no means all the information and documents requested. By a letter dated 10 March 2010, he was told:

“…the disciplinary action initiated against you in 2006 was withdrawn and so there are no “live” allegations against you”

No defamation proceedings were ever issued.

In wide-ranging submissions, Mr Al Mustakim seeks to restore the decision of the ET. His submissions can be summarised under two categories. The first is an attempt to widen the alleged detriment-causing acts and deliberate failures to act beyond the threats of disciplinary proceedings and an action in defamation by reference to matters such as the way in which statutory sick pay was treated, the reduction of the notice period from three months, the failure to provide holiday pay for 2010 and the failure to respond to requests made pursuant to the Freedom of Information Act. The second returns to the complaint that the threat of defamation proceedings was never withdrawn before the commencement of the proceedings in the ET, notwithstanding requests for assurances that it had been. It is not sought to reopen the threat of disciplinary proceedings. It is now common ground that that threat expired with the letter of 30 November 2009.

The wider allegations of detriment-causing acts

Mr Al Mustakim submits that the threats of disciplinary proceedings and an action in defamation were never the totality of Mr Flynn’s case on detriment-causing acts and deliberate failures to act. It is true that in his ET1, Mr Flynn referred to other matters including the statutory sick pay issue and denial of his rights under the Freedom of Information Act. However, the ET1 was a single document in which a number of statutory complaints were made, including unfair dismissal and unpaid holiday pay. Indeed, those two complaints are still pending in the ET, having survived the strike out hearing in December 2011.

There is no doubt that the only allegations of detriment-causing acts addressed by the ET were the threats of disciplinary proceedings and an action in defamation. That is apparent from the passage to which I referred to in paragraph seven above. It is suggested that the omission to consider other matters in this context derives or may derive from the Employment Judge concluding that having made positive findings in relation to those threats, it was unnecessary to consider any other allegations. I consider that to be very unlikely. Each distinct allegation has its own chronology and time limit. Moreover, I attach significance to the document prepared by Mr Panton (the employment consultant who represented Mr Flynn in the ET) for an earlier case management hearing which, under the heading “PID Detriment”, had focused on “taking disciplinary action against him with the threat of instant dismissal”, and “advising him that he was being investigated with a view to court action against him for defamation” and “not advising him that the defamation action was withdrawn until…30 November 2009”. That document remained extant at the hearing on 8 December 2011.

Ms Caroline Musgrave, who represented WSRL then as she does on this appeal, says that that was the focus of Mr Flynn’s case on PID as presented by Mr Panton on that occasion. In the EAT, Langstaff J (at paragraph 24) “suspected” that the Employment Judge had “faithfully identified the thrust of the argument as it was put to her”. Mr Al Mustakim has only come into the case in this Court. There is no witness statement from Mr Panton suggesting that the Employment Judge failed to deal with other aspects of the PID case. In my judgment, it would be quite wrong for us to go behind the description by the Employment Judge of the case that was presented to her. On this basis, it cannot now be said that she was in error in confining her ruling on PID to the threats of disciplinary proceedings and a defamation action. I accept that matters such as statutory sick pay, holiday pay and Freedom of Information Act requests featured in the hearing. That is apparent from a transcription of the Employment Judge’s notes which was provided to us in the course of the hearing. However, those matters were relevant to other issues which were under consideration, in particular the unfair dismissal and holiday pay claims which the ET refused to strike out. In these circumstances, it seems to me that Mr Flynn is fixed with the way in which his PID case was put to the ET. It is not open to him to raise other alleged detriment-causing acts or failures to act in the course of an appeal which is limited to errors of law and in relation to which the ET has not made findings of fact specifically related to the time limit.

Although the EAT appears to have been minded to adopt this same approach, Langstaff J nevertheless went on to consider the wider allegations. However, he concluded (at paragraph 24):

“…they feature… in the skeleton argument of Mr Flynn for these proceedings as real matters that caused him a detriment that went on until he began proceedings and afterwards … there is no material to show that any one of them occurred any later than 18 March 2010.”

Accordingly, they significantly preceded the three month period which commenced in June 2010. That analysis seems to me to be essentially correct, save perhaps for one further Freedom of Information Act access request made in May 2010 which remained unanswered for the 40 day period permitted by the Act, thus trickling into the three month period. Indeed, it was that alone which persuaded Lord Justice Rimer, “with some hesitation”, to grant permission to appeal to this court. However, on further investigation it is apparent that Mr Flynn’s purpose in making this and other access requests was to satisfy himself that he was no longer under threat of disciplinary proceedings or, more importantly, a defamation action. For reasons which will become apparent when I turn to that aspect of the case, on any reasonable view there was no such threat as at June 2010. Accordingly, the failure to respond to the May request was of no real significance for present purposes. For all these reasons, I would reject the attempt to rely on the wider allegations.

There is no doubt that these threats, evidenced by two letters dated 20 October 2006, were, at that time, acts potentially falling within section 47B (1). The letter in relation to disciplinary action was written by Mr Martin, one of the directors of WSRL. The letter threatening a defamation action was written by Mr Coates on Kennedy’s notepaper, indicating that they were acting for the two directors rather than for WSRL. However, no point is taken on this appeal seeking to differentiate between the company and the directors for present purposes.

The decision of the ET was that these threats continued and had not been withdrawn at the time of the commencement of the proceedings in the ET. Oddly, that analysis appears to have been based on Mr Flynn’s “consistent and persistent view” rather than on an objective assessment. It was, in any event, a flawed analysis because it expressly concentrated on the alleged detriment rather than specific acts or deliberate failures to act, as the EAT found. However, the deference to Mr Flynn’s subjective belief also skewed the findings of the ET.

It is abundantly clear, as Mr Al Mustakim wisely concedes, that in reality the threat of disciplinary proceedings did not endure beyond Mr Martin’s letter of 30 November 2009. The complaint about it in proceedings commenced some ten months later was substantially out of time. However, Mr Flynn’s case is that the same cannot be said of the threat of defamation action which Mr Al Mustakim submits was not withdrawn before the commencement of proceedings and remained of deep concern to Mr Flynn as correspondence well into 2010 demonstrates.

I do not consider that this is a sustainable interpretation of the evidence about the threat. It is plain that the threatened disciplinary proceedings and defamation action had the identical factual substratum, namely the allegedly false allegation made by Mr Flynn against the two directors. It is true that Mr Martin’s letter of 30 November seems to have been in response to one from Mr Flynn (which we have not seen) asking about the disciplinary proceedings but, in stating that “the allegations against Mr Flynn were withdrawn and the proceedings were withdrawn subsequently”, it is fanciful to suggest that the same “withdrawn” allegations continued to support a continuing threat of defamation actions. Indeed, when Mr Panton summarised Mr Flynn’s PID case for the case management hearing in September 2011, he referred to WSRL:

“not advising [Mr Flynn] that the defamation action was withdrawn until Mr Martin’s letter dated 30 November 2009…”

Moreover, Mr Flynn’s self-written ET1 appears to make the same point. I find it impossible to escape the conclusion that, on any objective view, the threat of a defamation action (which, in any event, would have been statute-barred by October 2007, subject to a highly improbable extension of time) had disappeared by 30 November 2009.

If that were not enough, when Mr Flynn and his wife on his behalf sought to engage WSRL in correspondence in March 2010, at which time there were discussions about Mr Flynn returning to work, and assurances were sought as to whether the allegations against Mr Flynn were “now withdrawn”, it was made clear that “there are no “live” allegations against you”.

Once again, I find it fanciful to suggest that this related only to the threat of disciplinary proceedings and that Mr Flynn, who was under active consideration for a return to work, nevertheless remained under threat of a defamation action.

It follows from all this that, once the EAT had correctly identified the legal error on the part of the ET in focusing on detriment rather than on act or deliberate failure to act in relation to the issues of time, it was inevitable that it would be driven to the conclusion that the relevant acts or failures to act in the form of the threats and the failure to withdraw them had ceased to exist long before June 2010, that is three months before the commencement of proceedings. No case for an extension of time pursuant to section 48 (3) (b) is or could be advanced.

It is clear from what I have said that, in my judgment, the EAT correctly identified a fundamental legal error in the decision of the ET and, having applied the law to the facts and circumstances of this case, came to the only reasonable conclusion, namely that the PID claim was significantly out of time when the proceedings were commenced. Accordingly, I would dismiss this appeal.

I do not leave the case without drawing attention to the fact that the unfair dismissal claim, which is yet to be resolved, was described by the Employment Judge as having “little reasonable prospect of success”. The holiday pay claim may be straightforward and relatively modest. I hope that, in the circumstances, the parties may be able to resolve their remaining differences without further protracted, stressful and potentially expensive litigation.

I agree.

I also agree.