New employment legislation designed to provide financial support for dismissed whistleblowers has been described as ‘draconian’.

An employment tribunal has dismissed an application for interim relief after ruling that it failed to meet the high standard of proof required.

The case involves a financial services firm's former company secretary, who is pursuing claims of constructive unfair dismissal and automatic unfair dismissal.

Jane Passey resigned from Tufton Management Ltd on September 1 and claims she was effectively dismissed following unfair treatment after raising concerns as a whistleblower.

Miss Passey alleged that Tufton's board had refused to submit a mandatory Suspicious Activity Report concerning a client she described as ‘entangled in high-stakes cross-border bankruptcy proceedings’.

She claimed this ‘severe governance failure’ exposed her to ‘personal criminal liability’ under the Proceeds of Crime Act.

Miss Passey said she had raised concerns about a suspected illicit corporate vehicle and attempts to shield assets across international borders, but these were overruled by local directors. She subsequently reported her concerns directly to the island's Financial Services Authority.

She alleged that the company then marginalised her, with the final straw coming when it stopped paying her contractual sick pay.

Under legislation introduced in April 2025, employees claiming they were dismissed for whistleblowing can apply to be reinstated, re-employed or continue receiving their salary as though suspended from work.

Those payments could continue until the dispute is settled or tribunal proceedings conclude.

This means an employer could be required to continue paying a former employee's salary, even if it ultimately successfully defends the unfair dismissal claim.

The employer would be unable to recover those payments, potentially leaving it significantly out of pocket after months or even years.

In his ruling dismissing Miss Passey's application for interim relief, tribunal chairman Douglas Stewart said: ‘As a remedy, interim relief has been described as draconian.

‘In the experience of this tribunal, a number of whistleblowing cases have lasted three years.

‘Had this new law then been in place, the respondent in such cases could have been exposed in each case to reinstatement or re-engagement or to pay the respective complainants £100,000-200,000 as salary for no work in return.’

Mr Stewart said applications for interim relief required particularly careful scrutiny, noting that most such applications elsewhere had been unsuccessful.

Under the legislation, interim relief can only be granted where the tribunal considers it ‘likely’ that the main reason for dismissal was the employee making a protected disclosure.

Mr Stewart said the tribunal must use its ‘crystal-ball’ to assess the likely outcome of the eventual hearing, relying on initial impressions rather than established facts.

A separate tribunal panel must then hear the full case.

Rejecting Miss Passey's application, the tribunal concluded it ‘could not be satisfied that Miss Passey had a pretty good chance of success or anything close to approaching near certainty’.