EAT gives guidance on meaning of ‘agent’ in Employment Rights Act
Thomas Cordrey and Colm Kelly have succeeded in an EAT appeal concerned with the meaning of ‘agent’ in s.47B(1A)(b), Employment Rights Act 1996. The judgment in Handa v The Station Hotel (Newcastle) Limited & Ors [2025] EAT 62, handed down on 2 May 2025, raises the possibility of a wide net of personal liability being cast over those who provide independent services to employers, such as those engaged to undertake grievance and disciplinary processes on behalf of an employer.
The Claimant was a director of a family business (First Respondent), who had been dismissed following a process conducted by two independent consultants (the Fourth and Fifth Respondents) who provided their services through separate companies. The Fourth Respondent had conducted a disciplinary investigation, making findings of fact. The Fifth Respondent had conducted the disciplinary hearing and had written a report in which she said that the First Respondent would have been justified in dismissing the Claimant, without recommending that it do so. When the Claimant was dismissed, he brought claims for protected disclosure detriments against the First Respondent company, the Second Respondent director and shareholder, the Third Respondent director and board chair, and the Fourth and Fifth Respondents.
The Fourth and Fifth Respondents applied to strike out the claims against them on the basis that they had not acted as the agents of the First Respondent, so the Employment Tribunal had no jurisdiction. They succeeded on that application, which was supported by the First to Third Respondents. The Claimant appealed but was unsuccessful before the Employment Appeal Tribunal.
In his judgment, HHJ Auerbach noted that while the ability of a putative agent to affect the principal’s legal relations with third parties is a hallmark of agency, it was not an essential requirement. He noted that while the use of the term ‘agent’ in employment legislation referred to the common law concept of agency, that term fell to be applied in the particular context of an employment relationship, and its dynamic nature, keeping in mind the underlying purpose of the legislation. HHJ Auerbach concluded that in the context of an employment relationship, where the complaint relates to the conduct of someone acting on behalf of an external provider, the material issue is whether the services that they are contracted to provide ‘relate to a significant aspect of the employment relationship, rather than some other aspect of the employer's business or activities’.
Although the EAT held they could in principle be agents, on the particular facts neither respondent was alleged to have decided upon dismissal (which was outside their remit) or subjected the claimant to detrimental treatment because of disclosures. The EAT said it was not arguable that the employer had controlled their processes.
What exactly constitutes a ‘significant aspect of the employment relationship’ remains to be clarified in future cases. However, the reliance of many employers on outsourced providers to undertake independent investigations and grievance processes – particularly in relation to sensitive allegations such as sexual harassment, bullying or discrimination – raises the prospect of those investigators and decision makers being exposed to personal claims for whistleblowing detriment or discrimination.
Thomas Cordrey appeared for the First to Third Respondents, instructed by Baker McKenzie. Colm Kelly appeared for the Fifth Respondent, instructed by DAC Beachcroft.
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