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November 23, 2007

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Vigilance cannot be stressed enough

In addition to a well-drafted “well-being” policy an employer should always be alert to signs of stress among employees and be quick to act, as this round-up of cases by Kevin Bridges illustrates.

Stress at work claims can be very expensive for employers (in terms of compensation payable and in management time) and usually hinge on whether the employer could reasonably have foreseen that a particular employee would suffer psychiatric illness as a result of workplace pressures.

Since the Court of Appeal’s decision in Sutherland v Hatton in 2002, employers have felt able to take a fairly robust approach to such cases. This is because the guidelines set out in that case suggest that employees face a high hurdle when seeking to show that the employer could have reasonably foreseen their injury. Nonetheless, the Hatton guidelines are not rules of law and, as some recent cases in the Court of Appeal demonstrate, an employer who fails to be vigilant may have difficulty defending a claim.

In Mark Hone v Six Continents Retail Ltd [2005], Mr Hone complained that his excessive workload had caused him to suffer psychiatric illness. The Court of Appeal held the trial judge had been entitled to conclude that an injury to Mr Hone’s health, attributable to stress at work, was reasonably foreseeable. The correct test was whether this kind of harm to this particular employee was reasonably foreseeable.

Foreseeability depends on what the employer knows (or ought reasonably to know) about the individual employee. To trigger a duty to take steps, the indications of impending harm to health must be plain enough for any reasonable employer to realise that s/he should do something about it.

In this case, Mr Hone was an employee with a good record and had specifically complained of excessive hours, refusing to sign the opt-out under the Working Time Regulations 1998. All these matters established a plain indication of impending harm to health.

In Pakenham-Walsh v Connell Residential [2006] the employee alleged that she had been required to work excessive hours and was subjected to bullying and insulting remarks from her area manager. The trial judge ruled that the injury was not reasonably foreseeable. The employee had not complained to anyone in authority about how her health was being affected; she had not complained to her GP; no other employee had made similar complaints; and there were no other signs of “impending harm to health”, i.e. her appearance and behaviour gave no cause for concern. The Court of Appeal dismissed the employee’s appeal finding in favour of her employer.

Both Hone and Pakenham-Walsh considered the implications of the Working Time Regulations 1998 in the context of stress claims, and concluded that breach of the Regulations did not in itself give rise to a cause of action for compensation. However, in the absence of an employee’s consent to work more than the statutory 48-hour week, a prudent employer ought to, as part of its package of control measures, ensure compliance with the Regulations by limiting the number of hours each employee works so as not to exceed (on average) the statutory maximum, and keep proper records.

The most recent case to come to the Court of Appeal is Intel Corporation v Daw [2007]. Here, the High Court held that it was reasonably foreseeable that the employee’s workload created a risk of personal injury of this kind, particularly as she had given her employer a written warning of her problems before the breakdown occurred. It also held that although the employer provided a counselling service (which the employee did not make use of) this did not absolve the employer from liability. On appeal, the Court of Appeal upheld this reasoning. The provision of counselling services did not help the employer as the real problem in this case lay with the employee’s workload, which only management could resolve. In addition, the fact that Mrs Daw did not resign as the pressure on her mounted did not eliminate the employer’s duty of care.

These cases serve as a reminder that there is no substitute for vigilance. In addition to a well-drafted “well-being” policy an employer should always be alert to signs of stress and be quick to act (i.e. carrying out individual risk assessments), particularly when the employee is complaining of an excessive workload. The objective must be prevention but for situations in which this has failed, employers should seek to rehabilitate back to work those who are absent.
 

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