Our resident experts at Pinsent Curtis Biddle bring you a comprehensiveupdate on all the latest decisions that could affect your organisation, andadvice on what to do about themBarlow v Borough of Broxbourne, High Court: High Court rejectsdamages claim for depression caused by alleged bullying and stress Barlow claimed damages for psychological injury, which he claimed had beencaused by victimisation and bullying at work, which had led to him suffering adepressive illness. He also claimed damages for stress. The High Court rejectedboth claims. The High Court ruled that the incidents relied on were not sufficient, whenconsidered individually or cumulatively, to amount to bullying orvictimisation. Furthermore, the council was not liable for the depressiveillness caused by Barlow. There was nothing in Barlow’s behaviour that hadindicated any risk of psychiatric illness. He had failed to establish thatthere was a reasonably foreseeable risk that the conduct complained of would causehim harm. Key pointsThe High Court took a robust view to the allegations of bullying. There wasevidence of Barlow’s manager being angry with him, and using very abusivelanguage. While the High Court considered it undesirable that senior managers shouldresort to abusive language in the workplace, the incidents had be regarded incontext, were not numerous and were due to the manager being exasperated at thecatalogue of errors in the department for which Barlow was responsible. Barlowwas a senior employee and did not appear to be particularly sensitive or upsetby the incidents. The case also reinforces the fact that in claims for psychiatric illness,whether due to alleged bullying or for stress, the key issue is whether or notthere is a foreseeable risk of ill health. This is the first ‘threshold’ issueto be considered. If foreseeability of harm to health is not established, theclaim must fail. What you should do – Although this claim was unsuccessful, remember bullying and stress cangive rise to other types of liability, such as constructive dismissal anddiscrimination claims. They can also cause low morale, increased staff turnoverand absenteeism – Implement policies on bullying and harassment. Make it clear that bullyingis a serious disciplinary offence and advise employees on the procedure forraising complaints – If complaints are raised, take them seriously – failure to do so can alsoamount to constructive dismissal and possibly discrimination – Train managers in appropriate methods of dealing with poor performance andother managerial issues, including the proper use of disciplinary, performancereview and other procedures Albion Automotive v Walker and Others, Court of Appeal: Animportant decision on when enhanced redundancy payments become part of thecontract In six previous redundancy exercises before Walker’s redundancy dismissal,Albion had made enhanced redundancy payments. When Walker was dismissed, hereceived only a statutory redundancy payment. An employment tribunal ruled thatthe enhanced redundancy terms were part of Walker’s contract of employment byvirtue of custom and practice. That decision was upheld by the EAT and by theCourt of Appeal. Key pointsThe decisive issues, in the Court of Appeal’s view, were that the enhancedredundancy terms had been applied in previous redundancy situations; had beenput in writing by Albion and shown to the employees; were well known to allemployees; had been applied over a considerable time period to approximately750 employees; and that all of the Albion employees had a reasonableexpectation that they would also receive the enhanced redundancy terms. It was also particularly relevant that the company had applied the termsautomatically in later redundancy exercises without further negotiation orreference to the trade unions, and that statements made by the company in anewsletter in 1993 – that “the redundancy terms which will apply to theseredundancies are those which are currently in operation” – indicated thatthe company intended to be contractually bound by the enhanced redundancy termspolicy. Enhanced redundancy payments are common, particularly in large-scaleredundancy exercises. They often provide an incentive to employees to volunteerfor redundancy and, in the case of compulsory redundancy, can reduce theincidence of unfair dismissal claims or the value of any claims that arebrought. This case, however, demonstrates that the regular use of the sameenhanced terms creates a substantial risk of the employer being bound to offerthese terms in subsequent redundancy exercises. What you should do To avoid enhanced redundancy payments acquiring contractual effect: – Manage employees’ expectations by making clear that the terms apply to aspecific redundancy exercise or for a specific period, that there is nocommitment to use these terms in any future redundancy exercise and that theemployer has no intention of being contractually bound – Don’t reduce the terms to writing or make them widely available to employees– Make a specific decision in each redundancy exercise on the terms thatwill apply. Make sure this is documented and shows there is no commitment tomaking these terms available in the future – Consider applying different terms to different redundancy exercises Hunter Cane Limited v Watkins, Chancery Division: Divertingbusiness opportunities was breach of director’s fiduciary duties In October 2002, Watkins resigned from his employment as a director of thecompany. When the company examined the computer he returned, it suspected hehad taken clients and business with him, in breach of his fiduciary duties as adirector. The court ruled that Watkins’ resignation was prompted by his desire toacquire for himself actual or potential business opportunities from thecompany, and that during his employment he had secretly and systematicallyabused his position as a director. There was clear evidence that he had soughtto divert the company’s business to himself. The company obtained an injunctionrestraining him from dealing commercially with 21 named clients. Key pointsIn this case, Watkins had no service agreement with the company. However, asa director, he was under fiduciary duties and had breached these by seeking todivert, for his own benefit, business that ought to have gone to the company.Crucial to the granting of the order was compelling evidence that showedWatkins had diverted these business opportunities to himself. What you should do – Use written service agreements and include appropriate protection againstpost-termination competition by employees. The employer here was able to relyon a breach of fiduciary duty – that argument is only available in the case ofdirectors and can be difficult to establish. A written contract is the bestapproach – Take legal advice on the appropriate form of the post-terminationcovenants. To be enforceable, these should be tailored to the businessinterests that the company can legitimately protect and the risk posed by theemployee after termination – Include covenants preventing dealings with customers or clients aftertermination, as well as prohibitions on soliciting or canvassing for business – Include a garden leave clause as this may provide additional (and moreeasily enforceable) protection against the employee damaging the company’sinterests at termination.WATCH THIS SPACE… – The application of TUPE to outsourcing (particularly contractorchangeovers) remains controversial due to the very different approaches adoptedby the ECJ and the Court of Appeal. The CA’s most recent decision – RCOSupport Services v Unison – will be heard by the House of Lords later thisyear. The decision will be of great significance, being the first time that theHouse of Lords has considered this issue. – In May, the EAT will consider the challenge to the upper age limit on theright to claim unfair dismissal and redundancy payments. The Government ischallenging an earlier employment tribunal ruling in Rutherford v Harvest TownCircle that the upper age limit amounted to indirect sex discrimination,because it had a disparate impact upon men. Comments are closed. Previous Article Next Article Case Round upOn 1 Mar 2003 in Personnel Today Related posts:No related photos.