6 August 2007

NEWS

Corporate Social Responsibility Programmes More Important than Salaries for Young Professionals

An employer's corporate social responsibility (CSR) policy can be the deciding factor in whether a young professional takes up a position with the organisation, with one-third believing an employer's stance on CSR is more important than the salary offered.  Read more

Almost Half of UK Workers Want to Work Flexibly

A survey by ntl:Telewest Business has revealed that almost half of the UK working population would willingly accept the opportunity to work from home.  Read more

Employers Failing to Address Workplace Diversity

According to a survey by online recruitment firm Monster, 60 per cent of employers do not have a diverse workforce or do not know if they do.  Read more

Workers in Stressful Jobs Twice as Likely to Suffer Depression and Anxiety

A study by scientists at King's College London has revealed that young professionals who work in stressful, demanding jobs are twice as likely to develop depression and anxiety as those who work in less stressful professions.  Read more

Case Against Landlord Flouting Smoking Ban is Adjourned

The case against the first licensee to face legal action for continually flouting the smoking ban has been adjourned for two weeks due to lack of legal representation.  Read more

GMB did not Discriminate Against Female Council Workers Over Equal Pay Claims

The Employment Appeal Tribunal (EAT) has overturned a tribunal's finding of sex discrimination against the GMB union.  Read more

LEGISLATION

The Income Tax (Exemption of Minor Benefits) (Amendment) Regulations 2007

Regulations have been laid before Parliament which will provide an income tax exemption in respect of one health screening and one medical check-up per employee per year.  Read more

CASES

Employee's Stress Claim Fails as Psychiatric Harm not Foreseeable

The Court of Appeal has held that an employer was not liable for personal injury caused to an employee by its failure to deal with an allegation of harassment in accordance with its procedures.  The psychiatric harm suffered was not foreseeable.  Read more

Capability Dismissal Can be Fair Where Employer Causes Employee's Illness

The Court of Appeal has upheld a judgment of the EAT and confirmed that the fact that an employer is wholly or partly responsible for an employee's incapacity does not preclude the dismissal from being fair.  Read more

NEXT HR NETWORK EVENT

Our next HR Network Event will be our Workshop on Bullying & Harassment,  followed by our Annual National Conference – The case for diversity: legal compliance or business priority.  A full list of HR Network workshops and seminars is available here.

FEEDBACK

Please let us know what topics are of interest to you by emailing HRnetwork@pinsentmasons.com. This will help us to shape future editions of this Briefing and HR Network events.

NEWS

Corporate Social Responsibility Programmes More Important than Salaries for Young Professionals

An employer's corporate social responsibility (CSR) policy can be the deciding factor in whether a young professional takes up a position with the organisation, with one-third believing an employer's stance on CSR is more important than the salary offered. 

The findings were discovered in a survey by communications group BT.  BT questioned the respondents on CSR and discovered that 44 per cent would overlook employers with bad reputations and almost half of the respondents believed that CSR policies should be compulsory.

One-third of the respondents also believed that environmental considerations should be the most important topic on the company agenda – ahead of market innovation, flexible working, staff welfare and community investment.  One quarter of those questioned by BT believed that business is second only to governments in influencing the future of the planet.  

BT's CSR communications manager, Alison Garner, said: "Young professionals are increasingly looking at corporate social responsibility when considering which companies and brands they might work for.  Not only is it important to have a solid corporate social responsibility policy, but it is also increasingly important for companies to communicate what they are doing, as it is an area which can undoubtedly provide competitive advantage."  (Personnel Today, 2 August 2007)  Back

Almost Half of UK Workers Want to Work Flexibly

A survey by ntl:Telewest Business has revealed that almost half of the UK working population would willingly accept the opportunity to work from home.  The workers said that removing the commute to the office from their working day would reduce expenditure on fuel and food, increase productivity and balance their work-life ratio to reduce stress levels.

The survey of 1,000 employees found that productivity was greatly affected in an office environment as a result of office gossip and general banter.  Consequently 69 per cent of those surveyed felt that they would be more productive if they worked from home.

In addition, with the average daily commute to work lasting 58 minutes, working from home could improve employees' work-life balance by providing employees with up to 13 days extra holiday per year.

The managing director of ntl:Telewest Business, Stephen Beynon, said: "People appreciate that working from home can have huge lifestyle and wellbeing benefits.  There is now a growing emphasis on family friendly work policies and recognition of the need for improved work/life balance for the UK's army of commuters."  (Workplace Law, 30 July 2007)  Back

Employers Failing to Address Workplace Diversity

According to a survey by online recruitment firm Monster, 60 per cent of employers do not have a diverse workforce or do not know if they do.

Despite the UK having a vast array of equality legislation – including legislation governing sex, race, age, religion and disability discriminations – employers are failing to recognise the importance of diversity in the workforce.  Four in ten of the 660 employers questioned said diversity was a "big priority" with almost the same number (36 per cent) saying it was not a priority at all.  A further 15 per cent were unsure.

The chief executive of Monster UK and Ireland, Rob Brouwer, said: "Employers may not be aware of the rewards a diverse workforce can reap for their business.  People from different backgrounds provide the workforce with a broader skill set and cultural differences in practice and enable you to select from a bigger pool of candidates."  (Personnel Today, 30 July 2007)  Back

Workers in Stressful Jobs Twice as Likely to Suffer Depression and Anxiety

A study by scientists at King's College London has revealed that young professionals who work in stressful, demanding jobs are twice as likely to develop depression and anxiety as those who work in less stressful professions.

The study, led by Dr Maria Melchior and published in the journal Psychological Medicine, looked at 1,000 workers aged 32 and revealed that 45 per cent of new cases of depression and anxiety were attributable to stressful work that resulted in excessive workload and extreme time pressures. 

Dr Melchior said: "Our study shows that work stress appears to bring on diagnosable forms of depression and anxiety in previously healthy young workers – in fact the occurrence is two times higher than among workers whose jobs are less demanding."

Depression and anxiety afflicts one in six UK adults with a resulting cost to the economy of an estimated £13 billion in lost productivity at work – the equivalent to 1 per cent of the gross domestic product.  (Financial Times, 2 August 2007)  Back

Case Against Landlord Flouting Smoking Ban is Adjourned

The case against the first licensee to face legal action for continually flouting the smoking ban has been adjourned for two weeks due to lack of legal representation.

Mr Howitt, the landlord of the Happy Scots pub in Blackpool, has received seven penalty notices from Blackpool Council for continuing to allow smoking in his establishment.  Despite the risk of a fine of up to £30,000 Mr Howitt does not regret his failure to enforce the ban.  He said: "I don't incite smoking in my pub as our karaoke bar next door is completely non-smoking.  I'm not pro-smoking just pro-freedom.  Having a pint and a cigarette in a pub is one of the last great enjoyments left for the working classes.  I'm not prepared to shove my customers outside in the wind and the rain to allow them their right to smoke."

The case against Mr Howitt will be resumed on 15 August 2007.  (Workplace Law, 2 August 2007)

For further information on the Smoking Ban click here. Back

GMB did not Discriminate Against Female Council Workers Over Equal Pay Claims

The Employment Appeal Tribunal (EAT) has overturned a tribunal's finding of sex discrimination against the GMB union.

The original claim against the union arose when 100 female workers from Middlesbrough Borough Council claimed that they had been inadequately represented by the union in a dispute over equal pay.  It had wrongly advised them to accept a settlement rather than bring legal action. A tribunal ruled in the workers' favour last summer but the decision was appealed by the union.

The EAT, overturning the tribunal's decision (which would have forced the union to pay out £1 million in compensation to the workers), held that the union's actions were justified and did not amount to indirect sex discrimination.   

In response to the EAT's ruling the GMB national secretary for public services, Brian Strutton, said: "This judgment clarifies the fact that collective agreements are the right way to deliver equal pay.  GMB will now carry on with renewed vigour the task of securing equal pay throughout local government."  (Personnel Today, 1 August 2007)  Back

LEGISLATION

The Income Tax (Exemption of Minor Benefits) (Amendment) Regulations 2007

Regulations have been laid before Parliament which will provide an income tax exemption in respect of one health screening and one medical check-up per employee per year. 

For the exemption to apply health screenings must be available to all employees and medical check-ups must be available either to all employees or to those who have been identified in a health screening as requiring a medical check-up.

The Regulations are due to come in to force on 14 August 2007.

The Income Tax (Exemption of Minor Benefits) (Amendment) Regulations 2007 Back

CASES

Employee's Stress Claim Fails as Psychiatric Harm not Foreseeable

The Court of Appeal has held that an employer was not liable for personal injury caused to an employee by its failure to deal with an allegation of harassment in accordance with its procedures.  The psychiatric harm suffered was not foreseeable. 

The employee had worked for the council for 30 years and had an unblemished record when an allegation of sexual harassment was made against him.  The employer's harassment policy provided that complaints of harassment would be dealt with sensitively and would be investigated by a panel comprising three members.

The claimant claimed damages for breach of contract, arguing that the harassment policy formed part of his contract of employment. The High Court agreed that the employer had acted in breach of contract

• as it had acted insensitively when it informed him of the renewal of the investigation merely by leaving a letter on his desk for him to see on his return to work; and
• by convening an investigation panel comprising of only two members as opposed to the three stipulated by policy.

It held that the employee was entitled to damages as a result of these breaches of contract but stopped short of finding that the employer had acted in breach of its duty of care so as to found a claim in tort for personal injury.  The case was appealed to the Court of Appeal.

The CA upheld the High Court's decision that the Council's failure to convene a panel of three amounted to a breach of contract but found the obligation to handle the investigation sensitively did not form part of his contract and could not therefore be relied on to found a breach of contract claim.  However, the CA went on to hold that the employee was not entitled to any damages for breach of contract as it was not reasonably foreseeable that a failure to convene a panel of three (the breach) would cause stress sufficient to lead to psychiatric harm.  Therefore any damage which flowed from the employer's breach was too remote to be recoverable. 

The CA also considered whether the Council's failure to handle the investigation sensitively amounted to a breach of its duty of care.  In coming to its decision, the Court of Appeal, referred to the principles laid down in Hatton v Sutherland which requires a court to consider whether this type of harm to this particular employee was reasonably foreseeable.  Given that the employee appeared to be a man of robust health, it held that there was no reason to think/foresee that he would be severely adversely affected by the employer's ordinary operation of its procedure for investigating complaints.  This claim therefore also failed. 

This case demonstrates the difficulty posed for employees bringing stress at work claims.  Issues of foreseeability arise whether the claim is brought as one for breach of contract or for breach of the employer's common law duty of care.  Most of the recent stress cases have arisen from overwork.  In such cases, where the adverse effects of overwork are likely to build up over a period of time, there may be warning signs which might lead to a finding that the injury was reasonably foreseeable.  However, in cases like Deadman, where the employee relied on a single act of the employer, it will be extremely difficult to show that the injury was reasonably foreseeable, particularly where the employee has until that point been in good health. Many stress claims are likely to fail because the injury was not reasonably foreseeable.

Deadman v Bristol City Council  Back

Capability Dismissal Can be Fair Where Employer Causes Employee's Illness

The Court of Appeal has upheld a judgment of the EAT and confirmed that the fact that an employer is wholly or partly responsible for an employee's incapacity does not preclude the dismissal from being fair.

The employee developed a stress-related illness which the tribunal found was attributable to the conduct of one of her managers which was then exacerbated by the mishandling of her grievance. After a year of sickness, she was dismissed for incapacity in circumstances where the employee accepted, and the medical evidence confirmed, that there was no prospect of her ever returning to work.

The EAT held that the fact that the employer is wholly or even partly responsible for an employee's incapacity does not mean that a capability dismissal cannot be fair.  The question of whether the employer is culpable for the employee's incapacity is relevant to but not decisive of whether it was reasonable for the employer to dismiss.  However, in cases where the employer is responsible for the employee's incapacity it might be expected to "go the extra mile" in finding alternative employment.

The claimant appealed to the Court of Appeal, arguing that because her employer was responsible for her condition it could not, as a matter of law, dismiss her fairly.  The Court of Appeal disagreed, holding that such an argument was unsustainable.   It wholly agreed with the EAT's judgment and said that tribunals considering this question in future must follow the judgment of the EAT in this case which contained an accurate summary of the law.  On the facts of this case, the employer's culpability in bringing about the employee's incapability was plainly not a basis on which it could be said that the dismissal was unfair.

This case is an important one and is helpful to employers looking to dismiss an employee in circumstances where it might be argued that they have in some way caused the incapacity, whether it be through overwork, bullying or some other conduct.  It demonstrates that a dismissal in such circumstances may still be fair – the fact that the employer may have caused the incapacity is just something that goes into the balance when considering whether the decision to dismiss was a reasonable one in all the circumstances.  Culpability may mean that more might be required of an employer in terms of looking for alternative employment before deciding to dismiss but does not mean the dismissal cannot be fair.  

Suzanne McAdie v Royal Bank of Scotland  Back

© Pinsent Masons 2007

This bulletin is not intended to be a definitive analysis of legislative or other changes and professional advice should be taken before any course of action is pursued.

Should you have any questions please contact your usual Pinsent Masons advisor, your local office (see below) or hrnetwork@pinsentmasons.com

National Head of Employment

Chris Booth