Handa v The Station Hotel (Newcastle) and Others Clarification on who can be classed as an "agent" for the purposes of liability for whistleblowing claims

In the recent case of Handa v The Station Hotel (Newcastle) Ltd and Others, the Employment Appeal Tribunal (EAT) considered if external HR consultants who assisted with a grievance investigation and a disciplinary could be liable as an “agents” for the purposes of whistleblowing or discrimination claims.

Background

Mr Neeraj Handa (the Claimant) was a director and employee at the Station Hotel (Newcastle) Ltd (the Respondent). The Claimant alleged that he had suffered detriments, including dismissal, as a result of making protected disclosures about financial improprieties within the company. 

The Respondent had engaged two external HR consultants to, respectively, investigate grievances against the Claimant and to conduct the disciplinary process that ultimately led to the Claimant’s dismissal. The Claimant asserted that these HR consultants were acting as “agents” of the employer when providing these services, and so could be held personally liable under whistleblowing provisions of the Employment Rights Act. He therefore listed them as co-respondents to his claims against the Respondent.

Tribunal finding

The Employment Tribunal struck out the Claimant’s claims against the HR consultants based on the finding that their roles were limited to conducting investigations and making recommendations and they did not have authority to make binding decisions on behalf of the Respondent. The Employment Tribunal therefore concluded that the HR consultants were not agents acting on behalf of the Respondent, and there was no reasonable prospect of the claims against them succeeding.

EAT decision

On appeal, the EAT upheld the Tribunal’s decision. The EAT emphasised that for an individual to be considered an “agent” under the Employment Rights Act, there must be clear evidence of authority conferred by an employer. Therefore, merely performing tasks or providing services to a Company would not automatically establish an agency relationship. 

Takeaways

This case clarifies that external consultants are not automatically deemed “agents” of an employer for the purposes of whistleblowing and discrimination claims and that, unless such consultants are directly making decisions or acting under an employer’s authority, they are unlikely to be held personally liable for decisions made by the employer. An important factor that may be considered is the terms of engagement between an employer and any external consultants. This case is a useful reminder to carefully review such terms at the outset of any contractual relationship to ensure that they reflect the reality of the situation.

This ruling is also a reminder of the importance for a claimant of accurately identifying, at an early stage, which parties may be held liable in employment claims so that only appropriate respondents are named as co-respondents in proceedings.