Pressure to perform

Stress can be a difficult topic to deal with effectively despite the recent
guidance from the Court of Appeal. Jonathan Maude outlines the right procedures
for achieving a fair resolution for all concerned

Non-disclosure

Peter applies for a position as manager at Logg & Co, a freight
logistics company. Logg & Co anticipates winning a contract that is likely
to increase the work coming into its depot by 50 per cent and has decided to
recruit someone to perform the managerial function at a local level. Peter’s
application form and CV show he has a fair amount of experience. The answers he
gives on the medical questionnaire do not disclose any significant medical
condition. In fact, he has suffered from stress-related illness in the past.
Following interview it is decided to offer him the position as it appears he
will need minimal guidance in undertaking the role. Is it wise to offer him the
job without further medical investigation or discussion?

Jonathan Maude comments : Logg & Co has considered Peter’s
application on the basis of his experience and his interview. In addition,
Peter has completed a medical questionnaire that does not highlight any
pre-existing issues that should concern HR.

On 5 February 2002 the Court of Appeal, in the decision of Hatton v
Sutherland and others, considered four cases on appeal from four separate
county courts. Each concerned awards of damages against employers after the
litigants concerned had stopped working due to stress-induced psychiatric
illness. In essence, for the employer to be liable for negligence, the employee
needs to show that the employer has breached a duty of care that it owes to
employees by allowing a practice to continue when it was reasonably foreseeable
it would cause injury. The employer is obliged to provide a safe system of
work; this amounts to an obligation to provide reasonable support to the
employee to perform his or her duties in a way that will avoid causing
psychological injury.

This recent decision follows a number of cases in which employers have been
held liable for psychiatric injury since the landmark case of Walker v
Northumberland County Council [1995] 1 All ER 737. The Court of Appeal used the
Hatton decision to give useful "practical propositions" that are
intended to enable courts to consider claims in the future. One such "practical
proposition" is that an employer is entitled to take the information
before it at face value and is not required to investigate any medical issues
further unless it is put on notice that there is an issue that warrants further
investigation. Logg & Co is therefore entitled to rely on the information
given by Peter.

If Peter had disclosed he had suffered from stress-related illness, it would
have been necessary for HR to consider obtaining further details about the
circumstances that caused it. It would also have needed to ascertain whether
there were steps it should take to reduce the possibility that Peter would
suffer a recurrence. This would also go some way to discharging any duty to
make reasonable adjustments that Logg & Co may owe to Peter under the
Disability Discrimination Act 1995.

Absenteeism

Peter has been in his job for six months. He has not complained to Logg
& Co about any work-related stress, but there has been a noticeable
increase in his intermittent sickness absences during the past two months.
Peter has now informed Logg & Co that he will be absent for two weeks
having been certified as suffering from stress-related depression by his
doctor. What action should HR take?

JM comments: HR will need to meet with Peter to discuss the absence
and the reasons for it. It would also be advantageous to obtain independent
medical evidence as to his condition and to consider steps the company might
take when he returns to his position to alleviate factors that may be
attributing to the condition.

The important point to bear in mind is that Logg & Co will only be
liable for breaching the duty to provide a safe system of work if the company
can be shown to have caused or materially contributed to any harm suffered by
Peter.

The Court of Appeal in Hatton suggested that if Logg & Co can show it
has taken steps to avoid breaching its duty it is unlikely to be found to have
breached it.

If HR obtains independent medical advice about Peter’s problems and offers
counselling or other assistance, the company is unlikely to be found to be
acting in breach of its duty. It must ensure that its contractual documentation
provides Logg & Co with the right to request independent medical advice on
a specific employee. Clearly, if Peter refused to co-operate with any such
examination it would not assist him in any subsequent claim brought against
Logg & Co.

Other issues HR may need to discuss with Peter include the redistribution of
duties or demotion. Logg & Co will not be in breach of its duty if Peter
wants to stay in the job rather than face demotion even if he subsequently
suffers from illness through the pressures of the job. This is one of the major
issues to have come out of the Hatton decision: both employer and employee bear
the risk, so the employee needs to decide whether to risk any psychological
breakdown by staying in the job or consider dismissal or demotion.

If Logg & Co took the view that a redistribution of duties or demotion
was not appropriate, it might be in a position to consider dismissal as the
court would consider the size and scope of Logg & Co’s operation, together
with the demands faced by the company, to decide what is reasonable.

Again, this is an interesting point to come out of the Hatton decision, as
the court considered practical issues that may benefit smaller employers.
Previously, the courts have not been particularly sympathetic to arguments that
cost or lack of resources prohibited making certain adjustments.

Reduced role

The medical examination and discussions with Peter reveal that in his
previous job he suffered from occupational stress and that he eventually left
his former employer as a result of it. Logg & Co decides that as the volume
of work from the new contract is not as great as it originally anticipated,
some of the managerial responsibilities will be run centrally and Peter will
return to a non-managerial position.

What are the issues HR now needs to consider?

JM comments: It is for Logg & Co and Peter to agree his return to
a non-managerial position. HR needs to be aware that it cannot simply impose
changes unless it has the contractual right to do so. As a result, it would be
sensible to ensure all discussions about Peter’s return are noted and any
change in status is agreed, in writing, with Peter.

This will amount to a variation to Peter’s contract of employment and Logg
& Co will not simply be able to allege, in defending a constructive
dismissal claim for example, that it was acting in Peter’s best interests and
in a way so as not to breach the duty of care it owed him.

Logg & Co is now aware of the previous condition and that Peter did not
disclose it. Despite the fact it may be in a position to take action as a
result of this non-disclosure, it is aware of the condition and, accordingly,
will need to ensure regular discussions take place with Peter to monitor his
progress.

If it becomes apparent that Peter is unable to undertake even the reduced
role then Logg & Co will need to consider alternatives with him and this
may include terminating his employment.

If it does take the step of terminating the contract of employment, subject
to obligations that it may owe in connection with unfair dismissal rights and
possibly claims under the Disability Discrimination Act 1995, it is unlikely to
be found to be in breach of the duty of care.

If Peter was successful in any claim against Logg & Co, the Court of
Appeal has indicated that any damages would take account of the pre-existing
disorder or vulnerability and of the possibility that Peter would have
succumbed to a stress-related order in any event.

In addition, Logg & Co would only pay for the proportion of harm
suffered as a direct result of its wrongdoing. In this event, the level of
compensation should be reduced fairly dramatically.

Jonathan Maude is a partner in Manches Employment Practice

Key points

– The employer is obliged to provide
a safe system of work; this amounts to an obligation to provide reasonable
support to the employee to perform his or her duties in a way that will avoid
psychological injury.

– If an employee wishes to stay in a stressful job, both
employer and employee bear the risk, so the employee needs to decide whether to
risk any psychological breakdown by staying in the job or consider dismissal or
demotion.

– If a person is unable to undertake even a reduced role and
the company takes the step of terminating the contract of employment, subject
to obligations that it may owe in connection with unfair dismissal rights and
possibly claims under the Disability Discrimination Act 1995, it is unlikely to
be found to be in breach of its duty of care.

– In the event of a claim for constructive dismissal, damages
would take account of the pre-existing disorder or vulnerability and of the
possibility a person would have succumbed to a stress-related order in any
event.

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