Inadequate response to stress could lead to big payouts for employers

Employers could be responsible for huge damages if they don’t manage stress-related illness among employees adequately, according to a recent Court of Appeal ruling.

Telecoms company O2 had appealed against a December 2007 ruling which awarded Susan Dickins, a former O2 finance and regulatory manager, £109,754 damages for psychiatric illness negligently caused by stress at work.

Dickins left O2 in November 2003 after prolonged stress-related illnesses including irritable bowel syndrome. The illnesses started in 2001 and Dickins was treated by her GP and offered counsellling by O2, which she didn’t use, as she was already receiving treatment.

In June 2003 she was referred to O2’s occupational health service but never used it as appropriate paper work, according to the court papers, was not completed. Her GP signed her off as unfit for work because of anxiety and depression, and her employment ended in November 2003. Dickins commenced her action for damages in June 2005.

In the latest ruling, delivered last week, The Court of Appeal stated that by failing to act, O2 was in breach of its duty of care towards Dickins, and was liable to pay her the £109,754 damages.

Commenting on the case, employment law firm Hammonds said: “This decision should act as a reminder to managers that they should not ignore clear warning signs that an employee is suffering from stress. In this particular case, Dickins had expressly told her managers that she was suffering from stress and that she couldn’t cope. Their failure to act swiftly on her concerns ultimately left O2 liable.

“It also makes it clear that employers will not be let off the hook if they have referred an employee to a confidential counselling helpline. It had previously been suggested in Hatton v Sutherland that an employer that offers a confidential advice service is unlikely to be found in breach of duty.

“The court made it clear that if an employee tells her employer she is suffering from stress and cannot cope, it is not an adequate response merely to tell her to seek counselling.”

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