In the recent case of Handa v The Station Hotel (Newcastle) Ltd and Others 2025, the Employment Appeal Tribunal (“EAT”) provided guidance on the liability of HR consultants in employment tribunal proceedings.
The facts of the case
The Claimant was a director of The Station Hotel (“the Respondent”). During his employment, the Claimant made several complaints about alleged financial impropriety which he claimed amounted to whistleblowing.
Following this, several members of staff raised grievances against the Claimant, alleging that he had bullied and harassed them. The Respondent instructed an external HR consultant, Mr Duncan, to investigate the grievances. Mr Duncan upheld two of the grievances and recommended that the Claimant be referred to a disciplinary hearing in respect of these.
The Respondent instructed another external HR consultant, Ms McDougall to conduct a disciplinary hearing shortly after. Ms McDougall conducted the hearing and produced a report for the Respondent which included a statement that the Respondent would be justified in dismissing the Claimant for gross misconduct. The Claimant was suspended after the report was produced and summarily dismissed a few weeks later. The Claimant appealed the decision but was unsuccessful. Importantly, the decision to dismiss was taken by the Respondent itself and not the HR consultants.
The Claimant issued claims in the Employment Tribunal against not only the Respondent but also the two HR consultants. The Claimant argued that Mr Duncan and Ms McDougall were liable as agents of the Respondent for his dismissal as detrimental treatment on the grounds of whistleblowing.
At a preliminary hearing, the Employment Tribunal struck out the Claimant’s claims against the HR consultants on the basis that they had no reasonable prospects of success. The Claimant appealed to the EAT.
What did the EAT say?
The EAT held that the Tribunal had been mistaken in concluding that the HR consultants could not be acting as agents of the Respondent in carrying out their investigation and disciplinary hearing. The EAT held that, where a claim relates to the acts of an external provider, the key question is “whether the services 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”.
The EAT held that someone who is instructed to carry out employment related procedures like grievance investigations and disciplinary hearings, could be classed as the employer’s agent. The fact that they were external HR consultants did not preclude them from being agents of the employer.
Whilst the EAT held that the HR consultants could be regarded as agents, they found that they were not liable for the Claimant’s dismissal. Specifically, the fact that the Respondent had directly relied on the procedures carried out by the HR consultants when making its decision to dismiss, did not form an arguable basis to hold the consultants liable as agents for the Claimant’s dismissal.
Ultimately, it was the Respondent who made the dismissal decision and not the HR consultants. The fact that the Respondent had relied on the consultants’ work, did not establish liability. Accordingly, the strike out was upheld.
Takeaways
The EAT’s decision will no doubt provide reassurance for external HR consultants. Whilst they might be regarded as the employer’s agent when carrying out their services, the fact that their work heavily influences the employer’s decisions, will not be enough to establish liability.
That said, moving forwards, it is sensible that HR consultants ensure that they maintain clear boundaries between providing advice to the employer and decision making. The latter should be reserved for the employer itself.
How can we help?
If you are an HR consultant and have any questions about this blog, or need assistance with any employment related matter, please do get in touch with a member of our Employment team who will be happy to assist.
We publish blogs and social media posts to give a general overview of legal and commercial issues, relevant at the time of publication, which we hope you will find interesting. Please note that legal rules often change depending on the specific facts of a situation. The law also changes over time following changes in legislation or new court cases. We do not actively update our blogs or posts once they are published to reflect changes in the law.
As such, our blogs and posts are not intended to advise you on the law and must not be relied upon as legal advice. If you require advice on a particular issue then please contact us and we will be pleased to help.
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