Clarification on Employee Stress and Collective Consultation

The Court of Appeal and EAT have respectively clarified the position for employers dealing with (i) employee workplace stress and (ii) collective redundancies. The decisions do not alter current law, but provide helpful guidance for employers dealing with these two difficult situations.

Stress at work - how should and employer respond?

In the case of Hartman v South Essex Mental Health and Community Care NHS Trust the Court of Appeal considered a number of cases relating to stress at work. The CA confirmed some established principles:

• if an employer does not act on information that an employee is depressed at work, then it may be liable for the psychiatric injury suffered;

• employers can generally take information they are given by employees about their health at face value, unless there is cause to question the information provided;

• employers are only required to do what is reasonable in the circumstances to avoid stress in the workplace, bearing in mind the gravity of the possible harm, the costs involved and the size and scope of the employers business;

• if an employer has an occupational health system or counselling service, that does not in itself indicate that the employer has foreseen psychiatric injury but, rather, makes it less likely that the employer will be in breach of its duty if such injury does occur;

• if an employer wants to argue that an employee’s depressive illness has been caused by factors other than work and that, therefore, damages should be apportioned, the employer must provide evidence to show that the injury did, in fact, have other causes.

In addition, a key issue in one case was whether it was reasonable for the employer to have taken 5 days to respond to an employee’s memo detailing his concerns about stress at work. The CA decided that the delay in replying was reasonable because it heard evidence that the employer had taken the time to consider the best course of action. The employer was able to show that the delay had served a purpose.

Proposal to redeploy and the obligation to collectively consult

Before an employer is obliged to collectively consult about redundancies, it must be proposing to dismiss as redundant 20 or more employees, at one establishment, within 90 days. In the case Hardy v Tourism South East, the EAT focussed on whether the employer "proposes to dismiss" an employee it actually proposes to redeploy. The answer is that it depends on the nature of the redeployment.

There can be a dismissal even though an employee remains employed by the same employer if the employer brings one contract of employment to an end and re-engages on another. In some cases, the departure from the existing contract may be so substantial as to amount to the withdrawal of the whole contract.

Therefore, the key question is, does the employer intend to depart from the existing contract? If there are to be departures, are they so substantial as to amount to the withdrawal of the whole contract?

If the changes are to be so substantial, then the employer "proposes to dismiss" the employee.

What do these two cases mean for employers?

• If an employee raises an issue of workplace stress, do not delay in responding to them. An employer can, and should, take time to consider the best way to address the situation but it is dangerous to let the employee feel that his concerns have fallen on deaf ears.

In Hartman, the CA found for the employer because it was able to prove that it had been taking constructive steps during the 5 day delay. Therefore, rather than remain silent during any delay, the employer should write to the employee to tell him that it is giving serious consideration to his situation and investigating possible ways of addressing the matter. This will provide a paper trail and keep the employee informed.

• If an employer is contemplating redundancies but planning to redeploy, it should carefully consider whether the employees to be redeployed should be counted to determine if the obligation to collectively consult arises. If the intention is that the employees will sign up to a new contract, undertake a significantly different role or reapply for their positions, then they should be included in the count. Redeployed employees should only be excluded if they are to remain in a substantially similar position on their current terms and conditions.

For further details , please contact any of the following members of the McDermott Will & Emery Employment Group:

Fraser Younson, David Dalgarno, Alison Wetherfield, Rebecca Harding-Hill, Melanie Slocombe, Danny Tsang, Katie Clark, Charlotte Davies, Paul Reeves, Christie Malthus, Norm Reeve and Rachel Twite

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.