Handa v Station Hotel (Newcastle) Ltd and others [2025] EAT 62

In this case, the Employment Appeal Tribunal (“EAT”) provided guidance on the scope of agent liability in the context of external HR consultants being engaged to investigate grievances and conduct disciplinary hearings. Whilst HR consultants might potentially be regarded as acting as the employer's agents when performing such functions, the EAT concluded that the employer's later reliance on their findings and recommendations when making a dismissal decision did not mean the consultants were co-liable as agents for that dismissal decision.

The Claimant, an employee and director of the first Respondent, made allegations of financial impropriety which he claimed constituted protected disclosures. Subsequently, staff members raised grievances alleging bullying and harassment by the Claimant.

The first Respondent appointed external HR consultants (the fourth and fifth Respondents) to handle the grievance process and subsequent disciplinary hearing. The fourth Respondent conducted the grievance investigation, substantiating two complaints and recommending disciplinary proceedings. The fifth Respondent conducted the disciplinary hearing and found disciplinary charges to be substantiated and their report included a statement that dismissal for gross misconduct would be justified. The Claimant was summarily dismissed and unsuccessfully appealed the decision. He subsequently brought claims alleging that the fourth and fifth Respondents acted as the first Respondent’s agents and had subjected him to detriment due to whistleblowing. The ET struck out the claims against the fourth and fifth Respondents, finding no reasonable prospect of establishing an agency relationship.

The EAT dismissed the Claimant's appeal. It confirmed that whilst discrimination and whistleblowing legislation adopts common law agency principles, the ET must apply these flexibly to employment contexts. Although an external individual retained to conduct employment procedures could potentially be regarded as an employer’s agent whilst performing those functions, the factual basis for agency was not established in this case. Findings as to the degree of control, direction or constraint to which they were subject in that regard could be relevant.
Crucially, the EAT decided that even if the activities of the fourth and fifth Respondents were essential links in the chain of causation leading to the dismissal decision, with the first Respondent relying upon the investigation process carried out by the HR consultants, this could not establish liability for the dismissal itself based on agency principles. Only direct participation in the dismissal decision would potentially create such liability, which was not how the Claimant put his case.

This decision may reassure HR consultants engaged by employers to conduct independent investigations and provide recommendations within disciplinary or grievance procedures that they may not face potential co-liability as agents for subsequent decisions made by the employing organisation in reliance on their findings and recommendations. A key factor in the case was that the consultants made recommendations, rather than decisions. The case also clarifies that claimants seeking to pursue claims against individual investigators must establish that the individual directly caused the alleged detriment, rather than merely contributing to the process leading to the employer's decision.