01 January 2007

The fact that an employer has caused a worker's stress-related condition does not necessarily mean they cannot dismiss the worker fairly if they are incapable of working, according to a recent Employment Appeal Tribunal (EAT) judgment.

The judgment in Royal Bank of Scotland v McAdie overturned an earlier employment tribunal decision that held that McAdie, a bank worker on long-term stress-related sickness absence caused by bullying and mismanagement at work, was unfairly dismissed. Royal Bank of Scotland appealed against the decision.

On 29 November, the EAT decided that the dismissal was not unfair, and the fact that an employer has caused the incapacity does not mean it can never dismiss the employee fairly. But it added that there could be cases where an employer's responsibility for an employee's incapacity is relevant to the reasonableness of its decision to terminate employment. In such cases, employers may need to "go the extra mile" in finding alternative employment, or to put up with "a longer period of sickness absence than would otherwise be reasonable".

Jon Cooper, partner at solicitors Bond Pearce, said the ruling clears up some uncertainty. "What they are saying is that if you caused the breakdown and there is no prospect of return to work, you can still dismiss on the grounds of capability if you act reasonably and fairly," said Cooper. Otherwise, employers would have to keep employees indefinitely even if they cannot do any useful work.

Another significant part of the judgment is its statement that tribunals must resist letting sympathy for the employee lead them into "granting by way of compensation for unfair dismissal what is in truth an award of compensation for injury".

Cooper says this point is restating the fact that employment tribunals are empowered to deal with a set of limited issues under employment law; they cannot bring in issues that should be brought in the courts. Employees injured through an employer's breach of duty are entitled to compensation in the ordinary courts, which could include compensation for lost earnings and earning capacity. Insurers will not welcome this aspect of the ruling as it puts the onus back on employees to seek compensation for injury and loss through the civil courts.    

Categories:
Chemicals, Construction, Public services, Retail and distribution, Stress/bullying, Transport, Utilities, Financial / general services, Manufacturing / engineering, Prosecutions



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