A recent Employment Appeal Tribunal (EAT) decision has delivered a wake-up call for HR professionals and employers who rely on external consultants in disciplinary proceedings - especially in sensitive cases involving whistleblowing allegations. In Handa v The Station Hotel, the tribunal explored a complex legal question: Can external HR consultants be held liable for a dismissal claimed to be motivated by whistleblowing?
The case: a hotel in crisis turns to outside help
A busy hotel group, grappling with internal grievances against a senior employee, brought in external HR consultants to ensure impartiality. First, Mr Duncan investigated the complaints, partially upheld them, and recommended further steps. The matter was then handed to Ms McDougall, another consultant, who conducted a disciplinary investigation and issued a report concluding that dismissal for gross misconduct would be justified.
Relying on these reports, the employer held a disciplinary hearing and dismissed the employee. But the fallout didn’t end there. The employee claimed that the real reason for his dismissal was whistleblowing and sought to hold both the employer and the external consultants liable for the detriment he suffered.
The legal question: are consultants liable as 'Agents'?
The claimant argued that the consultants were acting as agents of the employer and should therefore share liability for the dismissal. But the EAT drew a firm boundary: while external HR consultants can be treated as agents in certain circumstances, liability only arises if they themselves commit a causative act or omission.
In this case, the consultants’ roles were clearly limited to investigating and reporting - they did not make or implement the decision to dismiss. That decision was taken solely by the employer, who had retained control of the process. The consultants' independence and contractual terms underscored this distinction.
What this means for HR professionals
This case is more than a legal footnote - it’s a cautionary tale with practical implications for HR teams:
Define the boundaries: Contracts with external consultants must make it explicit that their role is limited to investigation and recommendation - not decision-making.
Avoid confusion: Make sure internal decision-makers understand that consultant reports, even if they include strong opinions, are advisory - not binding.
Own the decision: The employer should clearly document that the final decision to dismiss lies with them, not the consultant.
Maintain separation: Any suggestion that the consultant’s process was influenced or controlled by the employer does not automatically lead to agency liability - unless there is clear evidence of collusion or direct involvement in the dismissal itself.
Focus on evidence: For a consultant to be liable for whistleblowing detriment, there must be proof that they personally subjected the employee to a detriment - not just that their report influenced a dismissal.
Final thought: keep the lines clear
Handa v The Station Hotel is a reminder of the importance of keeping the lines of responsibility sharp when working with external HR consultants. Clearly defined roles and robust documentation aren’t just best practice - they’re legal protection.
For HR leaders, the message is simple: structure your processes so your organisation remains firmly in control of key employment decisions - and your consultants stay firmly outside the liability line.
This article was created with insights from Lex HR - your always-on HR legal assistant. Lex HR helps HR professionals navigate complex employment law with confidence, providing real-time, reliable advice tailored to your needs. Try it free today and see how much easier compliance can be.
