UK: Stress at Work - the Next Chapter

Last Updated: 28 February 2002

An analysis of the decision of Terence Sutherland v. Penelope Hatton and others

Court of Appeal: 5 February 2002

The four appeals involved two Respondent Claimants who were teachers in public sector comprehensive schools, an administrative assistant in a local authority training centre and a raw materials operative in a factory.

The decision

The Court of Appeal set out the law as follows:

(i) Duty

The relationship between an employer and employee gives rise to a duty at common law to take reasonable care for the safety of the employee.

(ii) Foreseeability

The test to be applied is whether the psychiatric injury which has occurred was reasonably foreseeable when considering the particular claimant. In applying the test an employer, unless he knows of some particular problem or vulnerability, is usually entitled to assume the employee is up to the normal pressures of the job.

The Court of Appeal emphasised the test involves a consideration of the particular characteristics of the employee concerned and the particular demands an employer makes. The following factors were identified as relevant to the analysis:

  • A consideration of the nature and extent of the work being done. It will be easier to conclude harm is foreseeable if an employee is being overworked in an intellectually or emotionally demanding job or where there is evidence of unreasonable pressure being applied. It is relevant to consider how other employees doing a similar job are managing – do, for example, abnormal levels of sickness/absence exist?
  • Central to the analysis is the extent to which there are any warning signs from the claimant employee. The Court of Appeal emphasised "It is important to distinguish between signs of stress and signs of impending harm to health. Stress is merely the mechanism which may but usually does not lead to damage to health". That said, it was recognised harm to health may be foreseeable without an express warning. Frequent/prolonged uncharacteristic absence from work, for example, might be sufficient to put an employer on notice.
  • Generally an employer is entitled to take what he is told by or on behalf of the employee at face value.
  • The indications of impending harm "must be plain enough for any reasonable employer to realise that he should do something about it".

(iii) Breach of duty

If a risk is foreseeable an employer’s duty is to take reasonable care. What is reasonable in the circumstances leads to some circularity in reasoning in that it depends in part upon the foreseeability of harm, the magnitude of the risk, the gravity of the harm, the cost and practicability of preventing it and the justification (if any) of running the risk.

The Court of Appeal identified the following factors:

  • It is necessary to identify not merely what an employer could have done but what an employer should have done. In addition, it must be shown that a particular step would have done some good. Specifically the Court of Appeal identified that an employer who offered its employees confidential help would probably not be found to be in breach unless it was established that totally unreasonable demands were being placed on the employee.
  • If there were no steps which an employer could reasonably take, or that would be of benefit, it is for the employee to decide whether to continue to take the risk of ill health or whether to leave.

(iv) Causation

To succeed a claimant must establish the employer’s breach of duty made a material contribution to the harm suffered. Where a number of causes are identified an employer should only be responsible for that proportion of the harm for which he is responsible; unless the harm is indivisible. The Court of Appeal endorsed an extension of the principle set out in cases such as Holtby v. Brigham and Cowan (Hull) Limited [2000] PIQR Q293.

The Court of Appeal also confirmed that where it was established the employer’s conduct had merely exacerbated a pre-existing disorder or vulnerability, the damages awarded should be limited to the exacerbation caused.

Discussion

The Judgment is obviously of assistance in defending stress at work claims because the Court of Appeal has set down guidelines for Courts below to follow and it is to be hoped this will create certainty as to the questions a judge has to consider.

It is apparent the Court of Appeal has struck a balance between the competing interests of employers and employees and that considerations of policy played an important part in the decision. This is evident from the following passage:

"When imposing duties and setting standards, the law tries to strike a balance which is reasonable to both sides… It is in everyone’s interests that management should be encouraged to recognise the existence and causes of occupational stress and take sensible steps to minimise it within their organisation. It is in the interest of the individual employees who may suffer harm if their employers do not. It is in the interest of the particular enterprise which may lose efficiency and workers if it does not. It is in the public interest that public services should not suffer or public money be wasted… But if the standard of care expected of employers is set too high, or the threshold of liability too low, there may also be unforeseen and unwelcome effects upon the employment market. In particular, employers may be even more reluctant than they already are to take on people with a significant psychiatric history or an acknowledged vulnerability to stress-related disorders. If employers are expected to make searching inquiries of employees who have been off sick, then more employees may be vulnerable to dismissal or demotion on ill health grounds…".

Policy considerations are perhaps most evident in relation to the Court of Appeal’s refusal to accept the submission by Counsel for the employees that there are some occupations (in particular, in the public sector) which are so intrinsically stressful that harm is always foreseeable.

The principles enunciated by the Court of Appeal are relatively clear and familiar; albeit that the Court has applied a restrictive interpretation. Their application in practice will create more difficulty and much will continue to turn upon the detailed facts of the particular case. This is inevitable in an area of law where the establishment of liability is so dependent upon the particular facts. For example:

  • Although the Court emphasised that it is important to distinguish between signs of stress and signs of impending harm to health this may be difficult to do in practice. It is easy to imagine that a claimant will rely upon the same facts as evidence of impending harm to health which the defendant relies upon as evidence of (if anything) mere stress. It seems the point the Court of Appeal was making is that the identification of stress in itself in the workplace does not establish foreseeability. The claimant must go further. It is necessary to establish there were factors in the nature and extent of the work as well as sufficient signs from the claimant himself that an injury was reasonably foreseeable.
  • In many cases there are a number of factors operating in tandem which cause the psychiatric injury. Courts are now encouraged to undertake an apportionment exercise so that the employer only pays for that proportion of the harm for which he is liable. In asbestos cases the practice has arisen of apportioning liability on a time exposed basis. This will not be possible in most stress cases where the various contributory factors are operating at the same time. No guidance is provided as to how an apportionment is to be achieved other than that "a sensible attempt should be made" and, again, much will depend upon the particular facts of the case. The result will be to reduce awards although it might be difficult (at least initially until first instance decisions provide a guide) to assess the likely apportionment percentages the Court will make. This could create uncertainty between the parties prior to trial.

The Court of Appeal also dealt with a problem which occurs in many cases where an employee has been off work sick and returns to work. What assumptions is an employer entitled to make upon the employee’s return? The Court held that the mere expiry of a GP’s certificate does not mean either that an employee is fit to return to work or that the employee is no longer at risk of recurring illness. However, an employer is usually entitled to assume that an employee who returns to work after a sickness absence without raising his fitness to work, is fit to return to the type of work done before the illness occurred.

The Court of Appeal identified that "The key is to offer help on a completely confidential basis… and if reasonable help is offered either directly or through referral to other services, then all that reasonably could be done has been done". Will this provide a complete defence? In many cases the answer will be in the affirmative especially where the resources or size of the employer means that other steps could not reasonably have been taken. What is the position if a referral service exists but the stressful work environment remains and ultimately causes harm? The Court of Appeal has indicated that in these circumstances a breach of duty could still be established if it is shown that totally unreasonable demands were being placed upon the employee and the risk of harm was clear.

In conclusion, the Judgment is likely to lead to a reduction in claims brought in the County and High Courts. Claimant solicitors must now ensure their client’s claim meet the required criteria. Given, however, that tribunals can award personal injury damages in discrimination cases, and the fact that there is no compensation cap in such cases, it is probable that an increased number of claims will continue to be brought before tribunals. Unlike the position at common law, an employee who is, for example, able to bring his claim within The Disability Discrimination Act 1995 is not required to establish either that the employer caused the initial harm nor that the harm was reasonably foreseeable.

Although leave to appeal to the House of Lords was refused by the Court of Appeal, leave is being sought from the House of Lords. Any future consideration by the House of Lords, whether in relation to these claims or other claims, is likely to consider the fundamental question whether, in fact, an employer’s duty of care is limited to employees who are at foreseeable risk of physical (as opposed to psychiatric) harm. Although the House of Lords has never considered this question in the context of workplace stress this approach was taken (by a majority) in the case of Frost v. Chief Constable of South Yorkshire [1999] 2AC 455 which considered claims by policemen who were on duty at the Hillsborough Stadium on the day of the disaster. If the House of Lords did find that the duty of care was limited to a foreseeable risk of physical harm, stress claims at common law would become a thing of the past unless it was accepted that an employee who suffers psychiatric harm due to stress at work inevitably also suffers some form of physical injury. Watch this space!

© Herbert Smith 2002

The content of this article does not constitute legal advice and should not be relied on as such. Specific advice should be sought about your specific circumstances.

For more information on this or other Herbert Smith publications, please email us.

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