Independent investigators not liable for whistleblowing dismissal

Outsourcing investigations can provide objectivity

Many businesses sensibly opt to use external HR consultants or investigators when handling high-stakes disciplinary or grievance matters to ensure objectivity, professionalism, and compliance – particularly involving senior staff.

Investigators welcome decision from the EAT

As this can be a volatile area, the recent Employment Appeal Tribunal (EAT) decision that external investigators cannot be held personally liable for alleged discrimination or whistleblowing-related dismissal – unless they take an active role in making the actual decision to dismiss — will be a welcome one.

Background: Handa v The Station Hotel and others

In Handa v The Station Hotel and others, an employee who had been dismissed attempted to argue that two external HR consultants – Mr Duncan and Ms McDougall – were personally liable as “agents” of the employer, on the basis that their investigation reports had influenced the dismissal decision.

Indeed, Mr Duncan had investigated a grievance and found parts of it substantiated, and Ms McDougall subsequently conducted a disciplinary investigation and produced a report suggesting dismissal for gross misconduct would be appropriate. There was no argument that the employer, The Station Hotel, relied on their report to make its decision to dismiss.

But the EAT rejected the argument that the consultants should be personally liable for the dismissal decision for the following reasons:

• Neither consultant made nor implemented the dismissal decision – the employer did.
• Even if the employer influenced their work, that alone did not amount to agency or legal liability.
• External consultants can, in theory, be agents, but they must carry out a causative act or omission linked to the dismissal to be found liable.

The claims against both consultants were struck out for having no reasonable chance of success.

What does this mean going forward?

This decision will bring relief to independent HR professionals and investigators, but it also underscores the need for clear engagement terms. These should clearly define roles, confirm that decision-making rests solely with the employer, and ideally include an indemnity clause in case of future legal claims. Independent support remains a valuable tool – but boundaries must be clear.