The Court of Appeal has held in the case of Dickens v O2 plc that the employer was liable for the stress-induced ill health suffered by its employee.

The crucial question in a stress case is whether the effect of a stress-related illness was reasonably foreseeable. The answer depends on the characteristics particular to the employee and demands placed on them by the employer. Once on notice of a potential stress-related illness, the employer needs to take remedial steps to prevent it by, for example, allowing time off, offering counselling, redistributing work and "buddying".

The facts of this case are not untypical: Ms Dickens' personality rendered her vulnerable to stress. At a meeting in April 2002, she told her manager that she was not coping with some aspects of her job and that she was "at the end of her tether". She requested a 6-month sabbatical and said she was likely to go off sick. A month earlier she had asked about the possibility of moving to a less stressful job and told him of the difficulties she was experiencing. She had previously been a reliable employee but she began to be late for work almost every day. Her manager suggested that she contact the company's confidential counselling service. A month later, she again requested a sabbatical on the grounds of stress and it was agreed that she would be referred to occupational health. However, she suffered a breakdown before any appointment was arranged.

The Court of Appeal held that her psychiatric illness was reasonably foreseeable. The problems had not arisen suddenly and it was clear that Ms Dickens had been mentioning difficulties over a period of time. It was significant that she was usually a conscientious employee. The Court found that the reference to counselling was an inadequate response to her complaint and that the employer should have sent her home and referred her to occupational health much earlier. By failing to do so, the employer was in breach of its duty of care towards her and had caused her illness.

As regards damages, the Court of Appeal doubted the previous approach of the Court in Sutherland v Hatton (in which a reduction to damages was made to take account of external, non-work related factors that may have contributed to the illness). In the view of the Court in Dickens v O2 plc, where the employer has materially contributed to the illness it should be liable for the whole loss, although it may be appropriate to reduce certain heads of future loss to reflect the risk that the illness would have occurred in any event.

Impact on employers

This case highlights the imperative to be alert for signs of stress, to be open to what employees are saying and to intervene promptly and effectively. A reference to a counselling service is not a panacea discharging the employer's duty of care in all cases. Active intervention can include, in addition to counselling:

  • allowing paid time off;
  • reorganising work and/or working time;
  • referred to an occupational heath service;
  • escalating to senior management;
  • providing a mentor.

If the comments concerning apportionment are followed, employers may find themselves liable for higher levels of damages in stress cases.