City
high-flyer Steven Horkulak recently won £912,000 in High Court damages against
money brokers Cantor Fitzgerald International over alleged bullying. He claimed that Cantor Fitzgerald’s
president, Lee Amaitis, screamed obscenities at him on a regular basis for six
months leading up to his constructive dismissal in June 2000. David Hetherington, a partner at law firm
Fladgate Fielder, explores some of the issues.
Q.
A former worker who resigned is claiming he was constructively dismissed as the
result of being regularly subjected to unjustified criticism, shouting and foul
language from his manager. Our
business is conducted in a high-pressure environment, and the manager says he
was merely trying to encourage the former employee to improve his
performance. Is the claim still likely
to succeed?
A.
Yes. The manager’s conduct amounts to
bullying, leading to a fundamental breach of the implied contractual duty to
maintain the trust and confidence of the employee.
As
recently reported in the media, a money broker who was forced to resign from a
major brokerage firm two years before his contract was due to expire in similar
circumstances, was awarded nearly £1m damages by the High Court. His boss had a ‘dictatorial’ management
style, and hysterically screamed obscenities and threats at him on a regular
basis – sometimes in the presence of others.
The judge said employers have ‘obligations in connection with the
self-esteem and dignity’ of employees.
Q.
An employee walked out because he felt that a colleague was behaving abusively
and threateningly towards him. If we
sack the worker for walking out, can he bring a claim against us? He had less than a year’s service.
A.
If the bullying consisted of actual or threatened physical violence or
psychological harm, the employee could argue that he walked out because his
health and safety were in serious and imminent danger. In such circumstances, the dismissal would
be automatically unfair, and the worker would be entitled to bring a complaint
of unfair dismissal, irrespective of this length of service.
Q.
A worker resigned as a result of being physically and verbally bullied by
colleagues at work, which included racial abuse. He has brought complaints of
race discrimination and unfair constructive dismissal. The alleged acts undertaken by the
colleagues were not authorised by us, and were not connected with the
performance of their duties. Are we
liable? And what compensation could be awarded in respect of the alleged
discrimination?
A.
An employer can be held vicariously liable for bullying which amounts to
racial, sexual or disability harassment carried out by staff against a
colleague. The employer will not be
liable if it can show that it took all reasonable practical steps to prevent
the bullying. However, the employer
will not be able to use that defence if it ‘turned a blind eye’ to the
bullying, or failed to deal with a request from the victim for support.
Compensation
awarded for unlawful discrimination would be unlimited. It could include
compensation for injury to feelings and, if the worker has suffered any
psychiatric and/or physical injury attributable to the bullying, compensation
for personal injury as well. Aggravated
damages could also be awarded if there was a continual failure to deal properly
with any complaints about the bullying.
An
employer’s failure to take adequate steps to protect a worker who is being
bullied by a colleague can amount to a breach of the implied term of mutual
trust and confidence in itself, and could give rise to constructive dismissal
if the employee resigns because of that breach.
Q.
What steps can we take to reduce the risk of any future liability arising from
the bullying of staff by managers or colleagues?
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A.
A clear anti-bullying policy, which includes a complaints procedure, should be
introduced and operated. Existing
grievance procedures may not be suitable for dealing with bullying. The policy should include a clear definition
of what bullying is and the forms it takes, as well as a statement that
bullying will not be tolerated and will be treated as a disciplinary
offence.
The
complaints procedure should allow bullying to be dealt with through informal
and formal processes, as appropriate.
The victim should be permitted to bypass their line manager or
supervisor where the bullying involves them.
The formal procedure should set out principles governing such matters as
the investigation, the hearing, representation, confidentiality, disciplinary
sanctions and appeals.
