Case of the week: fairly dismissing an employee for work-induced stress

McAdie v Royal Bank of Scotland

Background

McAdie had worked for the Royal Bank of Scotland for many years. When the bank moved her to a different branch, McAdie complained, and discussions about the move quickly became fraught, with McAdie complaining that her manager’s behaviour amounted to harassment.

McAdie was signed off sick with stress and subsequently brought a grievance about the transfer and her manager’s behaviour. The grievance was mishandled for various reasons, including delay and the failure to deal with all of the complaints. The grievance was not upheld.

McAdie remained off sick despite the bank’s attempts to get her to return to work. After more than a year’s absence, she was dismissed, following a series of meetings and a review of medical evidence, which identified “a severe adjustment disorder secondary to alleged workplace issues including harassment”, and confirmed that a return to work was very unlikely in the foreseeable future. McAdie brought unfair dismissal proceedings against the bank.

Decision

The tribunal found that McAdie’s transfer and grievance had been badly handled, and that her medical condition had been caused by the bank and the way in which it dealt with the grievance. The tribunal upheld the unfair dismissal claim.

The Employment Appeal Tribunal (EAT) and Court of Appeal disagreed with the tribunal. Both courts agreed that while a tribunal should not ignore the fact that an employer has contributed to an employee’s ill-health, the fact that the employer has done so – however culpably – cannot prevent the employer from ever effecting a fair dismissal. The courts suggested that in such cases it might be necessary for the employer to “go the extra mile” in finding alternative employment for the employee, or put up with a longer period of absence than might otherwise be reasonable.

The question in an unfair dismissal claim is the reasonableness of the employer’s decision based on what it knew at the time, and for that purpose there should be no need to look at what caused the illness and who was responsible for it. Although the bank’s handling of the grievance was regrettable, there was no possibility of the employment continuing, and no alternative to dismissal.

Implications

This case provides some relief for employers in the context of unfair dismissal claims where the employer is wholly or partly responsible for the employee’s inability to work. Had the tribunal’s decision stood, an employer found responsible for contributing even partly to stress would be precluded from ever dismissing the employee. That cannot be right.

However, while dismissal can be fair in these circumstances, the appeal courts agreed that an employer will be expected to “go the extra mile”, which is likely to involve waiting for a longer period than normal before dismissing and making more effort to find alternative work. Employers must bear this in mind when handling cases where work-induced stress is alleged.

It is also important to remember that the comfort this case provides only extends to unfair dismissal. An employer responsible for causing an employee’s stress is also at risk of claims for personal injury, discrimination, constructive dismissal, and claims under the health and safety legislation.

Judith Harris,
 Professional Support Lawyer,
Addleshaw Goddard

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