Tribunal Case: Mr Bhagani v Goldenway Global Investments (UK) Ltd
Joanna Rose · Posted on: October 16th 2024 · read
In the recent case Mr Bhagani v Goldenway Global Investments (UK) Ltd an award of £560,000 in damages was made after the Employment Tribunal Judged that Mr Bhagani had been unfairly dismissed for Whistleblowing.
Mr Bhagani was a Compliance Director at Goldenway Global Investments (an FCA registered company) and was responsible for ensuring that the firm complied with its regulatory obligations, including those relating to money laundering. Over the years, he raised multiple concerns about the company's adherence to regulations. One significant instance involved freezing the transfer of a multi-million-pound sum, which he believed would have been an illegal third-party payment.
Eventually, Mr. Bhagani became the sole director of the firm. When Mr. Luen, a project manager in Hong Kong, announced plans to take on the director role, Mr. Bhagani objected. He pointed out that the position required FCA (Financial Conduct Authority) approval, which Mr. Luen had not secured after previously withdrawing an application due to the FCA’s reservations.
Later, when asked to sign an appointment letter for a new employee, Mr. Bhagani refused, again citing regulatory concerns. Shortly thereafter, he received a warning letter criticising his cooperation in the onboarding process and raising performance concerns from shareholders. Mr. Bhagani responded, noting that the appointment would violate capital requirements and mentioned being interrogated by UK authorities after a previous employee, whom the firm had asked him to sponsor, was revealed to be a Chinese agent. He argued that the warning letter violated FCA regulations and emphasised his efforts to guide the firm correctly without involving regulators.
Subsequently, Mr. Luen informed Mr. Bhagani that Mr. Liu had been appointed as a director and requested his help with Companies House filings and FCA approval. Mr. Bhagani resisted, asking the firm to seek legal advice instead. The firm then passed resolutions appointing Mr. Luen and Mr. Liu as directors while removing Mr. Bhagani from his position. In response, Mr. Bhagani reported his concerns about the firm’s regulatory compliance to the FCA. Soon after, he was dismissed for gross misconduct, allegedly due to obstructive behaviour.
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Under the Employment Rights Act 1996, a dismissal is considered unfair if it results from an employee making a "protected disclosure." This includes sharing information, in the public interest, regarding criminal offences or failures to comply with legal obligations, which the employee reasonably believes to be true. The employer must prove that the dismissal was not influenced by the whistleblowing.
The tribunal ruled that Mr. Bhagani had made several protected disclosures, including concerns about money laundering, unauthorised appointments, and the recruitment of a Chinese espionage agent. It concluded that his dismissal, under the guise of obstructive behaviour, was in fact for making these protected disclosures. As a result, the tribunal awarded Mr. Bhagani £560,000 in damages. In whistleblowing cases such as this, the usual cap on damages for unfair dismissal does not apply.
This case underscores the importance for employers, especially in highly regulated sectors such as finance and law, to implement policies that encourage protected disclosures and safeguard employees who make them. In addition to reputational risks, companies face substantial financial risks, as awards in respect of whistleblowing cases are not subject to a cap. If dismissing an employee who has made a protected disclosure, it is crucial that the dismissal is not related to the disclosure, and that the decision-making process is well-documented.
If you require more information about whistleblowing protections, we could review existing policies or supply new policies along with the relevant training requirements.
If dismissing an employee who has made a protected disclosure, it is crucial that the dismissal is not related to the disclosure, and that the decision-making process is well-documented.
