Guidance from an HR consultant in Edinburgh on what a recent whistleblowing tribunal case means for your business and how to avoid costly mistakes.
If you run a small business, you’re likely making people decisions every week without a second thought.
Some of those decisions carry far more legal risk than you’d expect.
A recent tribunal case saw an employer ordered to pay over £66,000 because they handled a dismissal badly. The employer genuinely believed they’d done nothing wrong.
From January 2027, the financial consequences of getting it wrong are set to increase even further.
Here’s what happened and what you can take from it.
The background to the case
An engineer called Andrew Estcourt was working as a chief engineer when a new manager was appointed above him. Estcourt raised repeated concerns that his new manager lacked the technical competence needed for the role.
Rather than looking into those concerns properly, the business decided Estcourt was being difficult. They described him as obstructive and unsupportive.
A client then requested that Estcourt be taken off the project. The employer went along with that request and dismissed him.
The tribunal found the dismissal was automatically unfair on whistleblowing grounds. Estcourt was awarded £66,295 plus £1,800 in costs. The HR team involved were criticised for showing a complete disregard for fair process.
Why the employer’s reasoning didn’t hold up
The employer relied on something called SOSR as the reason for dismissal. SOSR stands for “some other substantial reason” and it is a legitimate basis for ending someone’s employment, but only in the right circumstances.
It needs proper evidence behind it. You can’t simply reach for it because a situation has become uncomfortable or because you want a quick resolution. Without a thorough investigation and clear justification, using SOSR leaves you exposed at tribunal.
The client request problem
One of the biggest mistakes here was treating a client’s request as though it automatically justified dismissal.
If a client asks you to remove someone from a piece of work, that’s a commercial matter. It doesn’t give you a fair reason to end that person’s employment. You still need to look at what happened, consider whether there are alternative roles or arrangements, and follow a proper process before making any decision about their future.
Skipping those steps is exactly what cost this employer.
The whistleblowing dimension
Estcourt’s concerns about his manager weren’t just personal grumbles. Because they touched on competence in a role with potential health and safety implications, they qualified as protected disclosures under whistleblowing law.
When an employee raises concerns related to health, safety or legal compliance, those concerns can be classed as protected disclosures. Dismissing someone because they’ve made a protected disclosure is automatically unfair. It doesn’t matter how polished your process looks on paper.
Many business owners aren’t aware of how broad whistleblowing protections actually are. An employee doesn’t need to use the word “whistleblowing” for their concerns to be covered.
The impartiality issue
There was another significant failing in this case. The employer ran the grievance process and the dismissal process at the same time, with the same people involved in both.
That creates a serious impartiality problem. If someone has raised a grievance, the person dealing with that grievance should be completely separate from whoever is making decisions about their employment. Mixing the two undermines the fairness of both processes.
What you should take from this
Whether your team is small or growing, these principles apply to you.
- If an employee raises a concern, investigate it properly before you take any other action. Don’t label someone as difficult just because their feedback is inconvenient.
- A client asking you to remove someone from a project is a commercial issue. It requires careful handling and doesn’t translate directly into a reason for dismissal.
- Keep grievance and disciplinary processes separate. Different people should be handling each one.
- If you plan to use SOSR as a reason for dismissal, make sure you have solid, documented evidence to support it.
Getting any of these wrong can be expensive. And from next year, it’s likely to become even more so.
Why the financial risk is increasing
At the moment, employees generally need two years of service to bring an ordinary unfair dismissal claim, and any compensation is subject to a statutory cap. From 1 January 2027, this framework changes completely. Workers will qualify for protection after just six months, and the statutory cap on compensation is being removed.
This means that handling early-stage dismissals or probation periods badly will carry a much higher financial risk than before. It is also worth remembering that for cases involving whistleblowing, like the one mentioned above, compensation is already completely uncapped today. For a small business, the financial impact of a poorly handled exit could be severe.
How to protect your business
If you’re dealing with a tricky employee situation right now, whether it’s a performance concern, a complaint from a client, or someone raising issues about a colleague or manager, it’s really important to get proper advice before you act.
Taking a step back and getting the process right from the start can save you a huge amount of stress and money down the line.
As an outsourced HR consultant in Edinburgh, I work with business owners just like you to think through these situations carefully and make sure you’re on solid ground.
If you’d like to talk something through, please do get in touch. I’m always happy to have a conversation and help you work out the best next step.
