5 February 2007
According to a recent TUC survey, stress levels in UK workplaces are on the increase and the question of the employer’s liability continues to plague the courts and tribunals. Guidance arising from Sutherland v Hatton (2002) is still persuasive but there have been developments.
In order to bring a successful personal injury claim an employee will need to be able demonstrate that the employer breached its duty of care and that as result of the breach the employee suffered physically or mentally. A breach of duty could be established, for example, if the employer fails to carry out a risk assessment or reduce the causes of stress. The employee must then go on to show that the risk of ill-health was “reasonably foreseeable”.
Following the decision in Hatton, an employer is usually entitled to assume that an employee can withstand the normal pressures of the job unless he knows, or ought to have known, of some particular problem or vulnerability. This means that the employee will normally need to point to some other factor which would have put the employer “on notice” that they must take positive steps to remove the employee from impending harm.
In a recent case Hiles v South Gloucestershire NHS Primary Care Trust (2006) the fact that the employee broke down in tears during a performance review was considered sufficient to put the employer on notice. The High Court viewed this as not normal behaviour and held that it was suggestive of the fact that the employee was under stress, which if it continued could adversely affect her health. In this case, the employee eventually suffered a nervous breakdown. The employer was held liable as it had failed to keep the situation under review so that action may have been taken to prevent the illness. The employee was awarded approximately £62,000 in damages.
The fact that an employer provides employees with access to a confidential advice or counselling service for matters including stress, is not in itself evidence that the employer reasonably foresees that there is a risk of injury. Guidance from Hatton actually suggests that an employer who provides such services is unlikely to be found in breach of duty. However it has been made clear in D v Intel Corporation UK Limited (2006) that much will depend on the circumstances of each case, and the type of services provided, in order to discharge the employer’s liability. In this case the High Court found that the short term counselling service could not have done anything to reduce the risk of stress or help the employee cope with it. The most it was able to do was to refer the employee to her GP. On this basis the service was not sufficiently adequate to meet the employer’s duty of care.
In other developments, the EAT in Royal Bank of Scotland PLC v McAdie (2006) has held that an employer can fairly dismiss an employee on capability grounds even though they are suffering from work-related stress. Although the tribunal originally found against the employer, on the basis that it had caused the employee’s absence, the EAT argued that, whilst culpability should be a material factor in deciding whether dismissal was reasonable, it should not rule out the possibility of a fair dismissal. As the employer in this case had gone the “extra mile” it upheld the employer’s appeal.
The EAT suggested that in such cases the employer would be expected to make extra effort to look for suitable alternative employment and put up with longer periods of absence before taking action. Here, the employee went sick with stress as a result of a transfer to another branch and her manager’s conduct. At a meeting the employer offered redeployment as an option but the employee argued that the only suitable resolution of her grievance was to leave employment with compensation. After an absence of 6 months the employer instigated its sickness absence procedures and, following two meetings, at which the employee was again offered alternative roles, eventually gave notice to terminate on grounds of ill-health.
Whilst most stress claims are brought as personal injury claims, employers should also be aware that, if the stress is caused by harassment on prohibited grounds, the employee may have a claim under discrimination laws. It too, has also recently been established that an employer can be held liable under the Protection from Harassment Act which will cover stress brought on by any type of harassment. Following changes to the legal definition of a disability in December 2005, employees now also have more opportunity to claim protection under the Disability Discrimination Act. Mental impairments no longer need to be clinically well recognised but must still have a long term, substantial adverse effect on normal day to day activities.
Given the statistics on the number of employees affected, the negative side effects on the organisation, and the potential liability for a number of related claims, surely employers are feeling the stress too! Alleviate this by carrying out stress audits, undertaking risk assessments and providing adequate training and support to managers and employees.