Employment: Work related stress

29 August 2007

There is no legal duty on an employer to carry out an investigation into allegations of sexual harassment sensitively but contractual procedures must be followed.

How should an employer investigate allegations of sexual harassment made against an employee by a fellow worker? In Deadman v Bristol City Council, the claimant alleged that he now suffered from depression as a result of the way in which his employer had conducted such an investigation. His claim was for damages for personal injury.

As a local authority, the employer had published a document entitled ‘Integrated Equalities Policy’. It had also adopted a written ‘Procedure for Stopping Harassment in the Workplace’.

The employer admitted that it had failed to follow its own procedure in that the panel convened to examine the complaint against the employee consisted of only two rather than three members as laid out in the procedure. The employee also complained that, having appealed against the panel’s decision that he had harassed his colleague, the appeal committee’s decision (that the panel’s decision should be overturned but that, as the original complaint remained unresolved, a fresh panel should be convened to deal with it) was conveyed to him by a letter which was merely left on his desk for him to find when he next came into work.

Although the High Court considered that, by acting in this way, the employer had broken an implied legal obligation to act sensitively, the Court of Appeal has now allowed the employer’s appeal. There is no such legal duty on an employer. The employer must comply with its own contractual procedures and, for these purposes the Procedure document (but not the Policy document) was to be treated as a contract term. Beyond that, an employer has only two legal obligations to its employee – the implied duty of mutual trust and confidence and the duty to take reasonable care to avoid causing physical or mental harm to the employee.

In this case, although there had been a breach of procedure, it was not that breach that had caused the employee’s depression and it could not reasonably have been predicted that merely informing the employee that the investigation had been re-opened would cause him psychiatric harm.

Points to note:

  • It will be reassuring for employers to hear that there is no extra legal requirement on them to handle allegations of harassment in a particular way.

  • However, any procedures for dealing with such allegations (which all employers should have in place) will be regarded as contractual documents and the employer will be in breach of the employment contract if those procedures are not followed.

Can an employer dismiss an employee fairly for incapacity even though the incapacity was caused by the employer’s own conduct?

The Court of Appeal has recently settled this question, by upholding the approach taken by the EAT in the case of McAdie v Royal Bank of Scotland.

The employee was dismissed on the grounds of ill-health. She had been off work for more than a year suffering from serious depression which had been triggered by the way in which a grievance that she had raised with her employer (about a relocation of her work) had been handled.

When she claimed unfair dismissal, the Employment Tribunal considered that her claim must succeed. It was satisfied that ‘no reasonable employer would have dismissed in these circumstances because no reasonable employer would have found themselves in these circumstances’.

The employer appealed to the EAT. The appeal was successful.

The EAT confirmed that the fact that the incapacity had been caused, in whole or in part, by the employer would always be relevant as to whether, and if so when, it would be reasonable for the employer to dismiss the employee on grounds of incapacity.

However, that fact alone could not prevent the employer from ever effecting a fair dismissal of that employee. Otherwise, employees incapable of any useful work would have to be kept on the books indefinitely. Also, such employees still had the right to claim damages for personal injury, including compensation for loss of earnings, in a separate claim.

The question to be asked was – ‘Was it reasonable for the employer to dismiss the employee on that date, in the circumstances as they then were, including the fact that their mishandling of the situation had led to her illness?’ In this case, the medical evidence was clear that there was no prospect of her returning to work and so the dismissal was fair.

Point to note:

  • While such a dismissal may be fair, employers must take care to act reasonably. In McAdie, the EAT said (and the Court of Appeal agreed) that it may be necessary in such a case for the employer to ‘go the extra mile’ in finding alternative employment for such an employee or put up with a longer period of sickness absence than would otherwise be reasonable before dismissing, if the dismissal is to be judged to be fair.