Work-Related Stress: Employer not Liable

The Court of Appeal has upheld a decision of the Employment Appeal Tribunal (EAT) that the fact that an employer’s conduct either caused or materially contributed towards an employee’s inability to carry out her job does not mean that a subsequent dismissal on account of that incapacity cannot be fair (McAdie v Royal Bank of Scotland).

Mrs McAdie worked for the Royal Bank of Scotland in Bromley as a Customer Services Officer. In July 2003 she was asked to transfer to a different branch for a six-month period. The request was made by a manager against whom she had previously raised a grievance and she was unhappy about the circumstances of the move. She complained to a senior manager and a meeting was held to discuss her complaint. The notes of the meeting were not sent to her until a month later and in her view these did not accurately reflect what was said at the meeting. She pointed this out and in a subsequent telephone conversation the senior manager spoke to her in a way which made her feel bullied and intimidated.

When Mrs McAdie was offered a move back to Bromley, this caused her added concern as she felt that it meant that it could not have been necessary to transfer her in the first place. She was then off sick with work-related stress.

Subsequently, Mrs McAdie raised a grievance, regarding the manner of her transfer and the conduct of the senior manager, which was not handled well by the bank. Her complaints were eventually rejected. Mrs McAdie made it clear that she did not contemplate returning to work and was seeking a termination payment to compensate her, but this was not taken up by the bank.

In December 2004, after a second medical report confirmed that her return to work was unlikely, Mrs McAdie was given 12 weeks’ notice of dismissal on grounds of ill-health. She appealed unsuccessfully against this decision but her position was still that she did not want her employment to continue and was seeking compensation for the loss of her job.

Mrs McAdie claimed unfair dismissal and sex discrimination. Her claim of sex discrimination was dismissed but the Employment Tribunal (ET) upheld her claim of unfair dismissal on the ground that the ill-health condition which gave rise to her incapacity had been caused by the actions of her employer and its failure to deal with her grievance in a way that could resolve the matter.

The bank appealed to the EAT. The EAT found that the ET should have asked itself whether it was reasonable for the bank to dismiss Mrs McAdie in the circumstances as they were at that time, including the fact that its mishandling of the situation had led to her illness. It noted that she had made it crystal clear that she was not coming back to work at the bank. In its view, the fact that an employer is wholly or partly responsible for an employee’s incapacity does not mean that a dismissal on account of that incapacity cannot be fair. Rather, the employer’s culpability is a relevant factor in deciding whether the dismissal of the employee is fair or unfair. If it were otherwise, ‘employers would in such cases be obliged to retain on their books indefinitely employees who were incapable of any useful work.’ However, an employer might be expected to ‘go the extra mile’ in such cases in finding alternative employment for the employee or allowing a longer period of sickness absence than would otherwise be reasonable.

The Court of Appeal dismissed a further appeal. It held that, in the circumstances, the bank’s culpability in bringing about Mrs McAdie’s incapacity was plainly not a basis upon which it could be said that her dismissal was unfair. The Court stated that the EAT’s analysis of the case was a wholly accurate summary of the relevant authorities and should henceforth be followed by Employment Tribunals and the EAT itself.